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Infomerics Credit Rating has assigned a bank facility rating of NPR 10.812 billion to Dudhkoshi Hydropower Nepal Pvt. Ltd. (DHNPL), the developer of the 70 MW Dudhkoshi-2 (Jaleshwar) Hydropower Project, which is being constructed with private sector investment.

The rating agency assigned an IRN BB+ rating to the company’s long-term bank facilities worth NPR 10.50 billion and an IRN A4 rating to its short-term bank facilities worth NPR 312 million.

The project, located in Solukhumbu District, is being developed with an estimated private investment of around NPR 15 billion. Under its financing structure, 70 percent (NPR 10.50 billion) will be financed through bank loans, while 30 percent (NPR 4.50 billion) will come from equity investment. The estimated development cost stands at approximately NPR 214.3 million per megawatt.

The project’s principal promoter is Aayu Malun Hydropower Ltd., while the company’s board is chaired by Kadam KC, an entrepreneur with more than 15 years of experience in the hydropower and infrastructure sectors.

KC is also associated with High Himalaya Hydro Construction Pvt. Ltd., Aayu Malun Hydropower Ltd., Puwa Khola One Hydropower Ltd., and several other companies. Infomerics noted that the company also benefits from the involvement of experienced Nepali investors and a seasoned management team.

According to the rating report, the project was initially planned to be promoted by Dudhkoshi Hydropower Pvt. Ltd. (India). However, following regulatory complications in obtaining approval for foreign direct investment (FDI) from the Reserve Bank of India (RBI), the Indian promoter transferred its entire ownership to Nepali investors. As a result, the project is now being developed entirely through Nepali private sector investment.

Infomerics stated that the company signed a 30-year Power Purchase Agreement (PPA) with the Nepal Electricity Authority (NEA) on November 22, 2021.

Under the agreement, electricity will be sold at NPR 4.80 per unit during the wet season and NPR 8.40 per unit during the dry season. During the dry season, electricity supplied during peak hours—up to six hours per day—will receive a tariff ranging from NPR 8.50 to NPR 10.55 per unit. The agreement also provides for a 3 percent annual tariff escalation during the first eight years.

The Dudhkoshi-2 Project is a Pondage Run-of-River (PROR) hydropower project. According to Infomerics, its ability to store water for short periods during the dry season and generate electricity during peak demand hours gives it stronger revenue potential than a conventional run-of-river project.

However, the project remains in the early stages of construction. As of July 13, 2026, its financial progress had reached only 5.17 percent.

The company achieved financial closure on September 21, 2025, while promoters had invested NPR 563 million in equity by December 8, 2025, representing around 13 percent of the total planned equity investment.

Although the project’s Required Commercial Operation Date (RCOD) was set for July 30, 2026, the company now expects commercial generation to begin only on July 16, 2028.

Infomerics warned that the delay could result in the loss of two stages of tariff escalation, a shorter revenue-earning period, and potential penalties payable to the NEA if the RCOD is not officially extended.

The project will utilize a design discharge of 62.30 cubic meters per second from the 2,614.77-square-kilometer catchment area of the Dudhkoshi River. The generated electricity will be evacuated through a 12-kilometer, 132 kV transmission line connecting the project to the NEA’s Tingla Substation.

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