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Economy

SBI to invest Rs 80 bn in hydropower project of Nepal

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KATHMANDU — The State Bank of India (SBI) will be investing a total of Rs 80 billion in the Arun III hydropower project of Nepal, which has 900 megawatts (MW) electricity production capacities.

The SJVN, which has been awarded with the construction of the mega power project of Nepal, has made an informal agreement with the SBI to acquire the investment as loan and soon will make the formal agreement, sources informed ANI.

“The Director Committee Meeting of the bank is due to make the recommendation. They soon will decide over. As of now they have decided over the loan extend and the interest rate over it has been finalized,” the source informed with anonymity.

“The 1.4 trillion rupees over the project will be expended for the construction of the structures and additional 11 billion rupees for the transmission lines,” the source briefed.

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With the completion of the project, Nepal will get 21.9 percent of the total electricity produced in a year i.e., 197 MW electricity with 86 crore unit for free in a year.

Along with this, the Punjab National Bank will lend the loan for the construction of the 268 km long 400 KV transmission line via the Everest Bank which is the joint venture bank of the PNB.

“The Everest Bank Limited also will invest 3.60 Billion Rupees (2.25 Billion INR) in the Arun III,” the source added. Along with the Everest Bank will be made with investment from the EBL and the investment of the PNB in the project also will stand at eight billion rupees (5 Billion INR).

The source also informed that the 4.06 billion rupees for the project will be lent from the Nepali banks as Bridge loan without further details over the banks.

With the finalisation of the investment and preliminary frame work prepared the Investment Board of Nepal will soon issue the license for the project.

“The Nepal Investment Board will soon issue the license for the construction of the project. It will not take more than a month meaning the license will be granted by mid-June as of now,” another source in the Nepal Investment Board told ANI.

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The Indian Government on the other hand has made the approval of 92 billion rupees that is to be invested by SJVN. With this the SJVN will invest 25 billion of its own for the mega-project and will take the charge for 25 years excluding the time for the construction of infra.

The further division of the project has been made with the granting of two separate packages to two Indian companies. Under the Package One, the Jay Prakash Associates (JP) Limited of India has been awarded with the construction of the Dam and diversion with an estimated cost of about 18 billion rupees.

The Second Package of constructing the power station is awarded to Patel Engineering Company Ltd. with the contract amounting 18 billion rupees which includes the 8 km long tunnel in addition.

ANI

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Economy

NRB to unveil monetary policy today

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KATHMANDU — Nepal Rastra Bank is unveiling the Monetary Policy 2018-19 on Wednesday, introducing a provision whereby domestic commercial banks will be able to hedge against convertible foreign currency by borrowing from foreign banks.

The central regulatory and monetary authority has opened a borrowing facility from foreign banks to meet the credit requirement in the production and infrastructure sectors, according to central bank sources.

The Monetary Policy is expected to bring down the cash reserve ratio from six per cent of the current fiscal to five per cent, eyeing the liquidity scenario.

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The monetary policy for the next fiscal will also narrow down the weighted interest spread rate from five per cent. In the context of commercial banks not being able to meet the priority sector lending mainly in the agriculture sector, the monetary policy is likely to extend a year’s period for banks to meet the priority sector or productive sector lending provision.

The Financial Sector Development Strategy of the government has also envisioned narrowing down the weighted interest rate spread.

According to the sources, the monetary policy would ease the provision of margin lending due to the depression witnessed in the stock market.

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