Export-Import Bank of India (EXIM Bank of India) has approved a soft loan support to Nepal for the development of three hydro projects. The loan worth is $155 million. The Bank approved projects are: Rahughat Hydropower Project, Koshi Corridor Transmission Line Project and Solu Corridor Transmission Line Project. Nepal's Ministry of Finance (MoF) received a formal letter from the bank on June 3.
Madhu Marasini, chief of the international economic cooperation coordination division at the Ministry, confirmed the receipt of the letter. Marasini said the Indian bank has approved soft loans worth $36 million for 32-mw Rahughat Hydropower Project, $90 million for 220-kv Koshi Corridor Transmission Line Project and $29 million for 132kv Solu Corridor Transmission Line Project.
Some two years ago, the government had requested the Indian EXIM Bank to provide $250 million in soft loans for the construction of 14 infrastructure projects, including hydropower, transmission lines and roads.
A contract agreement between the government and the bank was signed on October 21, 2011, in New Delhi during the visit of the then Prime Minister Baburam Bhattarai. As per the agreement, India will provide long-term loans for 30 years at 1.75 per cent interest. Although the credit agreement under the line of credit was scheduled to come into effect from June 29, 2012, the bank delayed releasing the amount after the Nepal government failed to submit the progress reports of the said 14 projects in time.