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Overview

China Eximbank pledges to finance 1200 MW Budhi Gandaki Hydropower Plant Project

Commitment Year•2017Country of Activity•NepalDirect Recipient Country of Incorporation•NepalSector•EnergyFlow Type•Vague TBD

Status

Project lifecycle

Pipeline: Pledge

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
May 24, 2017

Stakeholders

Organizations involved in projects and activities supported by financial and in-kind transfers from Chinese government and state-owned entities

Funding agencies

Government Agencies

  • Unspecified Chinese Government Institution

Receiving agencies

Government Agencies

  • Government of Nepal

Implementing agencies

State-owned companies

  • China Gezhouba Group Cement Co., Ltd.

Loan desecription

China Eximbank pledges to finance 1200 MW Budhi Gandaki Hydropower Plant Project

Narrative

Full Description

Project narrative

On May 24, 2017, the Government of Nepal approved a memorandum of understanding (MOU) between its Energy Ministry and China's Gezhouba Group Cement Co. Ltd., to construct the 1200 MW Budhi Gandaki Hydropower Plant, which costs $2.5 billion. Gezhouba Group signed the contract on an EPC + F (Engineering, Procurement, Construction, and Financing) model, meaning that the company is supposed to lead the financing. China Eximbank reportedly pledged to finance the project but the specific amount of financing that it pledged is unknown. According to the MOU, Gezhouba Group would have one year to assess the project and arrange the necessary funds. On November 13, 2017, the new government of Nepal led by Prime Minister Sher Bahadur Deuba scrapped the project, claiming that it did not serve national interests and was awarded to Gezhouba Group without open bidding by the previous administration due to alleged lapses in the award process.. On September 21, 2018, the cabinet led by Prime Minister Oli revived the project and awarded it again to Gezhouba Group. As of September 24, 2019, the Government of Nepal was preparing a new memorandum of understanding with its contractor.

Staff comments

This project is sometimes referred to as 1,200MW Budhigandaki Hydropower Project. The contractor responsible for project implementation may be a subsidiary of the China Gezhouba Group. For more information on the location, see https://bghep.gov.np/en/page/44/project/about_the_project.