NWEDC is majority-owned by Korean strategic investors: 50% by Korea South East Power Company (“KOSEP”), 15% by Daelim Industrial Co. Ltd. (“Daelim”) and 10% by Kyeryong Construction Industrial Co. Ltd. (“Kyeryong”) (KOSEP, Daelim and Kyeryong are together the “Sponsors”).  The local partner is Mr. Bkesh Pradhanang, who owns a minority stake in NWEDC. 

IFC is a 15% shareholder in the Company through a $4.25 million equity investment made in 2013 through IFC InfraVentures, an early-stage project development fund ($0.25million of which was as implementing entity for the donor funded Pilot Program for Climate Resilience (“PPCR”) under the Strategic Climate Fund of the Climate Investment Funds). IFC has been working with the Company to help ensure a bankable Project structure and development of the Project according to IFC’s Environmental & Social Performance Standards.

 Project cost is estimated at about $650 million. IFC proposes to invest A Loan of up to $90 million and equity of up to $12.5million from its own accounts, including its existing equity investment through IFC InfraVentures and up to $12.5 million from IFC acting in its capacity as implementing entity of various donor facilities. IFC is also the mandated lead arranger for mobilizing parallel loans and is acting as implementing entity of various potential donor-funded blended concessional finance facilities for co-investment alongside IFC.  These potential blended finance facilities include bilateral and multilateral funds, including the IDA18 IFC-MIGA Private Sector Window (“PSW”), created by the World Bank Group to catalyze private sector investment in IDA countries, with a focus on fragile and conflict-affected states.  

 UT1 is one of a few remaining large hydropower projects to be developed in Nepal outside of pristine watersheds. The project involves less than one hour of storage and will be operated in true run-of-river mode; there are no critically endangered or endangered species or habitats impacted, and land acquisition is limited to approximately 108 Hectares (ha) of mostly public land and circa 36 structures. Potential impacts include, but are not limited to: contribution of further fragmentation of the Trishuli river aquatic ecosystem and alteration of the natural river flow regime; land acquisition resulting in economic displacement of about 154 families and physical displacement of 14 families, mostly belonging to recognized Indigenous Peoples (IP) communities; social and environmental impacts associated with the expected influx of workers and job-seekers into the area during the construction phase; and potential direct and indirect impacts to the Langtang National Park (LNP), a nationally recognized protected area. Furthermore, as the basin is experiencing a rapid hydropower development, with multiple hydropower projects already in operation and other planned for construction in the foreseeable future, there could be significant cumulative impacts that if unmitigated could result in the complete conversion of the Trishuli aquatic ecosystem. UT1 will be the facility with the highest generation capacity in the Trishuli watershed, and thus its potential contribution to the cumulative impacts could be significant. More detail on key risks and impacts is provided in the PS 1 section below. Based on these risks and impacts, the project has been categorized A according to IFC’s Policy on Environmental and Social Sustainability.