KATHMANDU, Sept 7: The government has initiated the process for seeking a soft loan worth US$ 1 billion from the Chinese Export and Import Bank, known as China Exim Bank, to finance three major development projects.
The proposed three projects include one regional airport at Pokhara, a hydropower project in Jajarkot district and a road connectivity package that mainly includes construction of bridges.
An official at the Ministry of Finance informed myrepublica.com that a formal request to finance two of the three proposed projects -- Nalsyagugad hydropower and Pokhara regional airport -- has been forwarded to the Chinese bank through Ministry of Foreign Affairs about two week ago.
The three projects are on the top of the 60 MW Upper Trishuli Hydropower Project that was approved by the Exim bank some two years back but construction of which have not begun due to delay in selecting contractors.
The official said that the loan with a repayment period of 20 years will carry 1.75 percent annual interest rates along with 0.5 percent one-time service charge.
As per the request forwarded to the Chinese bank, the government has sought US$600 million for the construction of Nalsyagugad Hydropower Project located in the mid-western region. The storage-type 400 MW project, whose detailed feasibility study is expected to complete this year, will need a 30-km access road linking the powerhouse site and the district headquarters.
According to a preliminary study, the project will be connected to the national grid through a 105 km 220 kV double circuit transmission line to Kohalpur substation.
Likewise, the Ministry of Finance is seeking a loan worth US$200 million for the construction of a regional airport in Pokhara, the headquarters of the Western Development Region. Once completed, the Short Takeof and Landing airport will have a 2,500 meters long runway.
Similarly, the government is also planning to request for another US$200 million loan from the Chinese bank for the construction over 200 bridges to establish round-the-year road connectivity to the district headquarters having no roads.
However, the MOF official said that the ministry has not yet forwarded a formal loan request to the Chinese bank. "As soon as we receive the details of the project from the Ministry of Physical Planning that we are expecting soon, we will forward a formal request to the bank," said the official.
The government is planning to secure Chinese grant assistances for improvement of the existing 27-kilometer Ring Road and construction of a Dry Port at Tatopani near Nepal-China border during the upcoming China visit by Foreign Minister Sujata Koirala.
The proposed package of aid that the Chinese government is likely to announce during the Koirala´s visit scheduled for September 8-13 will be a part of 100 million Yuan grant that the northern neighbor has been providing Nepal each year.
According to sources, the improvement of Ring Road will mainly include construction of flyovers at major intersections like Maharajgunj, Koteshwar and Chabahil.
China is also expected to announce an aid package for Kathmandu Municipality which among others will include road cleaning machines and vehicles.
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