Upper Seti Hydropower project secures Rs 42 bn investment consortium led by Kumari Bank

KATHMANDU: In a major financial breakthrough for Nepal’s hydropower sector, the 216-megawatt Upper Seti Hydropower Project in Bajhang district has secured financial closure with a massive NPR 42 billion investment led by Kumari Bank Limited. The project is being developed in wards 4 and 5 of Saipal Rural Municipality, Sudurpaschim Province.

The landmark financial arrangement was formalized at a special signing ceremony in Kathmandu on Friday, where Kumari Bank CEO Ram Chandra Khanal and Samriddhi Energy Limited Chairman Shailendra Guragain, the project’s promoter, signed the agreement.

The consortium involves 14 leading financial institutions, with NMB Bank Limited acting as co-lead, and participation from Machhapuchchhre Bank, Hydroelectricity Investment and Development Company (HIDCL), Laxmi Sunrise Bank, Nepal Investment Mega Bank, Prabhu Bank, Nepal SBI Bank, NIC Asia Bank, Agricultural Development Bank, Lumbini Bikas Bank, Shangrila Development Bank, Kamana Sewa Bikas Bank, and ICF Finance.

Massive Financial Footprint
The Upper Seti project, estimated to cost around NPR 41.6 billion, will be funded in a 70:30 debt-to-equity ratio. This investment is one of the largest in western Nepal’s energy sector to date.

Kumari Bank, a prominent player in Nepal’s commercial banking landscape, continues to expand its focus on energy infrastructure, currently managing financing for more than 65 hydro and solar projects totaling over 2,000 MW in capacity. The bank’s energy portfolio has crossed NPR 70 billion, including committed loans.

Project Details and Technical Highlights
The Upper Seti is designed as a semi-reservoir run-of-river project with a 4.5-hour daily peaking capacity to meet high-demand periods.

Key specifications include:

Design Discharge: 34.1 cubic meters/second

Gross Head: 758.9 meters

Net Head: 735.6 meters

Minimum Environmental Flow: 1.41 m³/s to be maintained downstream year-round

The project has already secured:

Power Purchase Agreement (PPA) with Nepal Electricity Authority on August 4, 2023 (19 Shrawan 2080 BS)

Generation License granted on May 13, 2024 (31 Baisakh 2081 BS)

It targets commercial operation by July 15, 2031 (31 Asar 2088 BS), with a projected annual generation of 1,229.6 GWh — including 834.49 GWh during monsoon and 395.11 GWh in dry months, of which 163.63 GWh will be peak energy.

Revenue and Infrastructure Outlook
Tariffs: Dry season peak power rate is set at NPR 10.55/unit, and non-peak at NPR 8.40/unit

Transmission Plan: Electricity will be evacuated via a 30 km-long 220 kV double-circuit transmission line from a dedicated switchyard to the proposed 400 kV Bajhang substation, part of the national grid

Access Infrastructure: Construction of a 25-km access road is planned

Unit Cost: Estimated at NPR 192.5 million per MW

First-Year Revenue Projection: NPR 7.67 billion

Promoters and Investors
The equity investment (30%) is being mobilized by Samriddhi Energy Limited through a mix of institutional and individual investors. Major institutional backers include:

Siuri Nyadi Power Limited

Nigadi Group Power Limited

Sagarmatha Hydropower Company Limited

Mai Khola Hydropower Limited

Yash Holdings Pvt. Ltd.

Prominent individual investors include Shailendra Guragain, Dr. Bhogendra Kumar Guragain, and Dinesh Gurung, all recognized figures in Nepal’s energy investment landscape.

Strategic Significance for Sudurpaschim
The project is expected to be a catalyst for regional development by:

Creating employment during construction and operation

Expanding local infrastructure

Supporting Nepal’s goal of energy self-reliance

Contributing to national electricity exports and trade

Upper Seti is being hailed as a transformative initiative for the historically underserved Sudurpaschim Province, with potential to energize both economic activity and social development. Analysts see it as a milestone in Nepal’s hydropower journey and a testament to growing investor confidence in the nation’s clean energy future.