Financing Secured for 63 MW Chhujung Khola Hydroelectric Project Led by Machhapuchchhre Bank

28th September 2026, Kathmandu

Financial closure has been formally achieved for the 63 MW Chhujung Khola Peak Run-of-River (PROR) Hydroelectric Project located in Bhotkhola Rural Municipality-2, Sankhuwasabha district.

Chhujung Khola Hydroelectric’s Financing 

Developer Shangri-La Energy Limited signed a consortium loan agreement with a syndicate of six banks and financial institutions led by Machhapuchchhre Bank Limited. The total project cost is estimated at NPR 12 billion, financed through a 75:25 debt-to-equity structure comprising NPR 9 billion in debt and NPR 3 billion in promoter equity.

Consortium Financing Architecture and Corporate Ownership

The banking syndicate brings together major commercial and development banks alongside primary equity sponsors.

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• Lead Bank: Machhapuchchhre Bank Limited.
• Co-Lead Banks: Prabhu Bank Limited and Lumbini Bikas Bank Limited.
• Member Institutions: Muktinath Bikas Bank, NIC Asia Bank, and Shangri-La Development Bank.
• Major Equity Investor: Ghalemdi Hydro Limited is contributing approximately NPR 1.10 billion as a key institutional equity partner.
• Capital Breakdown: NPR 9 billion consortium debt and NPR 3 billion promoter equity.

Project Economics, Financial Metrics, and Revenue Projections

The project demonstrates strong financial indicators driven by low construction costs per megawatt and attractive return ratios.

• Total Estimated Cost: NPR 12 billion (approximately NPR 190 million per MW).
• Projected Annual Energy Generation: 371.8 million units (kWh).
• First-Year Projected Revenue: NPR 2.27 billion, growing to NPR 2.84 billion by the ninth operational year.
• Tariff Escalation: Features eight annual 3 percent tariff escalations from the Nepal Electricity Authority (NEA).
• Return Metrics: Return on Equity (ROE) of 25.67 percent and Internal Rate of Return (IRR) of 15.47 percent.
• Benefit-Cost & Payback: Benefit-Cost Ratio of 1.58, Net Present Value (NPV) of NPR 5.33 billion, and a simple payback period of 5.73 years.

Technical Specifications, Grid Connection, and Infrastructure Progress

Designed with a high head structure and peak operational capabilities, the project offers key operational resilience features.

• Operational Design: 4-hour Peak Run-of-River (PROR) facility with an underground powerhouse and an effective head exceeding 900 meters.
• Risk Mitigation: The project layout sits 45 meters above the riverbed, minimizing flood and sediment risks. Over 59 percent of the catchment area lies above 3,000 meters altitude.
• Power Evacuation: Electricity will be evacuated via a 55 km, 220 kV double-circuit transmission line connecting to NEA’s Sheetalpati 220 kV Substation.
• Environmental & Infrastructure Progress: Completed 14 km of access roads and worker camps. Tree-felling permits are cleared, supported by an NPR 36.3 million deposit to the Department of Forests and Soil Conservation for mandatory afforestation.

Executive Outlook and Future Pipeline

Key leadership representatives highlighted the project’s strategic value to Nepal’s national grid and the developer’s expansion plans.

• Banking Sector Commitment: CEO of Machhapuchchhre Bank Santosh Koirala and IPPAN President Mohan Kumar Dangi underscored the necessity of timely project completion to avoid interest during construction (IDC) overruns.
• Executive Commentary: Executive Chairman Kishor Subedi and Managing Director Pushkar Paudel noted that the high head design ensures lower construction costs and accelerated execution.
• Storage Hydropower Pipeline: Shangri-La Energy Limited is concurrently advancing feasibility studies for the 171 MW Chhimdi Kawadi Khola Storage Hydroelectric Project in Bichhya, Bajura district.

For More: Chhujung Khola Hydroelectric’s Financing