FC for Nepal tunnel PPP project

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FC for Nepal tunnel PPP project

Nepalal Purbadhar Bikas Company Ltd (NPBCL) has closed financing to develop the Kathmandu-Kulekhani-Hetauda Tunnel Highway (KKHT) PPP project in Nepal.

The total project investment is estimated at Rs35 billion (US$557.6 million). Canadian Crown Corporations and Shej Global Canada will provide loans of up to CAD$400 million (US$317 million) to finance the project and Infrabanx Corporation will manage the whole project. A fourth Canadian firm, Services Inc is preparing the due diligence audit report of the tunnel highway project.

According to sources, apart from investment from Canadian firms, there will be 20% local investment in KKHT form of pre-initial public offering (pre-IPO), IPO and promoter shares.

The project involves the development of a 58-Km four line tolled highway to link Kathmandu with Hetauda within an hour's drive, it includes the development of three tunnels with a total length of 4.5 km. This highway will connect entire western followed by southern and eastern parts of Nepal through Hetauda and will significantly boost overall economic growth of the corridor, region and the whole country.

The project is expected to be developed and designed within 4 years. The concession period will be 30 years with provision of additional 5 years.

The current Hetauda-Narayanghat-Mugling-Kathmandu passage is one of the highest trafficked road corridors in Nepal. Most of the goods from India or third countries are brought to Kathmandu via this route from Birgunj and other places. The road length from Hetauda to Kathmandu is approximately 227 km with travel time of approx. 6-8 hrs. The alternative route - the Tribhuvan Highway, though only 133 km in length still requires travel time of approx. 7-8 hrs. Whereas the purposed KKHT Highway will connect Kathmandu with Hetauda via Kulekhani in an hour.

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