NIC Asia Bank Secures Rs 95.20 Crore Investment for Phalakhu Khola Hydropower Project

1st June 2026, Kathmandu

NIC Asia Bank Limited has further expanded its investment portfolio in Nepals hydropower sector by securing financing for the Phalakhu Khola Hydropower Project, a renewable energy initiative located in Rasuwa District.

NIC Asia Bank Investment

The bank recently signed a Memorandum of Understanding with Rasuwa Hydropower Limited to invest Rs 95.20 crore in the development of the hydropower project, reinforcing its commitment to supporting Nepals clean energy and sustainable development goals.

The investment is expected to contribute significantly to the countrys growing demand for renewable electricity while supporting long-term economic growth.

Rs 95.20 Crore Investment Confirmed

Under the agreement, NIC Asia Bank Limited will lead the financing arrangement for the Phalakhu Khola Hydropower Project, which has a planned generation capacity of 7.29 megawatts.

The project is located in Naukunda Rural Municipality, one of Nepals hydropower rich regions with significant renewable energy potential.

The investment agreement demonstrates the banks growing focus on infrastructure and energy sector financing as part of its portfolio diversification strategy.

MoU Signed Between NIC Asia Bank and Rasuwa Hydropower

The Memorandum of Understanding was signed during a formal ceremony attended by representatives of both organizations.

The agreement was signed by Jayendra Rawal on behalf of NIC Asia Bank and Deepak Thapa on behalf of Rasuwa Hydropower Limited.

The signing marks an important milestone in the financial closure process of the project and paves the way for construction activities.

Project Capacity and Energy Production Target

The Phalakhu Khola Hydropower Project is expected to become an important contributor to Nepals renewable energy sector.

Key project highlights include an installed capacity of 7.29 megawatts. The expected completion period for this clean energy initiative is two years. It has an estimated annual electricity generation target of 38.74 gigawatt hours.

Once operational, the project is expected to add clean electricity to Nepals national energy system and support increasing domestic power demand.

Supporting Nepal Clean Energy Goals

The hydropower project aligns with the Government of Nepals objective of expanding renewable energy production and reducing dependence on fossil fuels.

Hydropower remains Nepals primary renewable energy resource, and investments in new generation projects play a crucial role. This initiative helps in increasing electricity production and strengthening overall energy security.

It is also vital for supporting industrial growth, promoting sustainable development, and enhancing environmental protection. The project is expected to contribute to these national priorities while creating economic opportunities in the local area.

NIC Asia Bank Expanding Hydropower Portfolio

As one of Nepals leading commercial banks, NIC Asia Bank Limited has increasingly focused on financing productive sectors, including hydropower, infrastructure, and renewable energy.

The latest investment reflects the banks strategy to diversify its investment portfolio while supporting projects that contribute to national development.

Hydropower financing remains an attractive sector due to Nepals vast water resources and long-term energy requirements.

By supporting projects like Phalakhu Khola, the bank aims to contribute to sustainable economic growth while generating value for stakeholders.

Economic and Environmental Benefits

The successful completion of the project is expected to deliver several major benefits across the region.

Increased Renewable Energy Production
The project will generate approximately 38.74 gigawatt hours of electricity annually, contributing to Nepals growing power supply.

Economic Growth
Additional energy generation can support industries, businesses, and households, helping strengthen economic activity.

Environmental Sustainability
As a renewable energy project, the hydropower plant will contribute to cleaner energy production and reduced carbon emissions.

Local Development
Construction and operation activities may create employment opportunities and infrastructure improvements in the surrounding region.

Importance of Hydropower Investment in Nepal

Hydropower continues to be one of Nepals most promising sectors due to the countrys abundant river systems and favorable geography.

Financial institutions have increasingly played an important role in supporting project development by providing project financing and long-term investment support.

They are also responsible for infrastructure funding and sustainable development capital. Projects like Phalakhu Khola demonstrate the growing collaboration between the banking sector and renewable energy developers.

Final Thoughts

The decision by NIC Asia Bank Limited to lead a Rs 95.20 crore investment in the Rasuwa Hydropower Limited developed Phalakhu Khola Hydropower Project represents another significant step toward strengthening Nepals renewable energy infrastructure.

With a planned capacity of 7.29 megawatts and an annual generation target of 38.74 gigawatt hours, the project is expected to contribute meaningfully to Nepals clean energy ambitions, economic growth, and environmental sustainability. Once completed, it will further support the countrys transition toward a more secure and sustainable energy future.

For More: NIC Asia Bank Investment