KATHMANDU: Energy Tila Power Company has secured Rs 70.07 billion in financing for the 420 MW Tila-2 Hydropower Project in Kalikot, marking a major step toward construction of one of Karnali’s largest private-sector hydropower projects.

The company signed a financing agreement with a consortium of banks and financial institutions led by Everest Bank. The project will be developed as a semi-reservoir-type scheme, with the dam planned in Tilagufa Municipality and the powerhouse in Khandachakra Municipality.

Of the total estimated cost, 75%, or Rs 52.55 billion, will come from debt, while the remaining 25%, or Rs 17.52 billion, will be financed through equity.

Institutional and individual investors including Stream Investment, Urja Impact Fund and Robbins USA are also participating in the project.

Tila-2 will have the capacity to operate in peaking mode for up to six hours a day. It is projected to generate 2,318.79 GWh of electricity annually, including 451.05 GWh during the dry-season peak period, 205.45 GWh during the dry-season off-peak period and 1,662.29 GWh during the wet season.

The project has already secured a power purchase agreement with the Nepal Electricity Authority for 296.74 MW and has obtained its generation licence from the Department of Electricity Development.

The developer plans to complete construction within four years of commencement.

The project’s ability to supply power during peak demand, particularly in the dry season, is expected to enhance its importance to Nepal’s electricity system beyond its installed capacity.

However, timely completion will depend on overcoming challenges related to transmission infrastructure, road access, construction logistics and the difficult terrain of Karnali.

The financing agreement represents a major milestone for Tila-2 and signals growing private-sector and banking interest in large-scale hydropower development in Karnali.