NEPAL —IFC, a member of the World Bank Group, and a consortium of other lenders have finalized a $453 million debt financing package that will support the construction of a landmark hydroelectric plant in central Nepal.

The plant according to an IFC press release, will increase Nepal’s electricity supply by one-third from today’s levels and provide clean, reliable power to some 9 million people.

IFC is the lead arranger of the debt package, which includes eight other lenders, and is one of the largest foreign direct investments in Nepal’s history.

The financing is being provided to the privately-owned Nepal Water and Energy Development Company and will be used to develop and operate a 216-megawatt, run-of-the-river hydroelectric plant on the Trishuli River about 70 kilometers north of Kathmandu.

Officially known as Upper Trishuli-1, the project’s financing structure, competitive tariffs, and use of internationally accepted contract standards is expected to set a standard for future hydropower projects in Nepal.

Barshaman Pun, Nepal’s Minister of Energy noted that the project will not only power hundreds of thousands of homes and businesses, but “will also serve as an of example of how private companies can help Nepal expand its hydropower sector and attract much needed foreign direct investment.”

Nepal’s rivers, fed by runoff from the Himalaya Mountains, could support 43 gigawatts of electrical generation capacity.

The IFC however noted that than three percent of this immense power capacity has been developed despite Nepal suffering has from blackouts and brownouts which hamper businesses and make life difficult for residents.

Along with providing clean, reliable power to millions, the new hydroelectric plant, which is expected to be completed in 2024, will set new environmental and social-impact benchmarks and enhance benefits for local communities.

 Furthermore, a cumulative impact assessment of existing and planned hydropower projects has been completed for the Trishuli basin, which will help guide sustainable development in the watershed.

IFC and a consortium of Korean and Nepali partners, in collaboration with the Government of Nepal, have spent over seven years developing the Upper Trishuli-1 project.

The Nepal Water and Energy Development Company’s key owners are Korea South-East Power, Daelim Industrial, Kyeryong Construction Industrial, and IFC.

IFC is providing $190 million in financing, including $95 million of equity and loans from its own account, and $95 million as the implementing entity for other funding sources.

The Multilateral Investment Guarantee Agency, another member of the World Bank Group, will provide $135 million in guarantees to cover political risk for the sponsors.

Other financiers include the Export and Import Bank of Korea, the Asian Development Bank, the Asian Infrastructure and Investment Bank, the Korea Development Bank, CDC (the United Kingdom’s development finance institution), FMO (the Dutch Entrepreneurial Development Bank), the OPEC Fund for International Development, and Proparco.