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The 420 MW Tila-2 Hydropower Project has finalised its financial closure.

An investment agreement for the Kalikot-based energy project was signed between various banks and financial institutions (BFIs) under the leadership of Everest Bank for the partial reservoir nature project promoted by Urja Tila Power Company (UTPC).

According to the UTPC, nine BFIs including Sanima Bank, will invest in the co-financing (consortium) formed under the leadership of Everest Bank. Prime Commercial Bank, NIC Asia Bank and Global IME Bank are also participating in the co-financing.

Similarly, Siddhartha Bank, Nabil Bank, Nepal Infrastructure Bank (NIFRA), Krishi Bikas Bank, Muktinath Bikas Bank and Kamana Sewa Bikas Bank are also among the BFIs investing in the project. With the investment agreement, the process of financial management required for the construction of the project has been completed.

The total estimated cost of the Tila-2 project is Rs 70.07 billion. As 75 percent of the amount equivalent to Rs 52.55 billion, will be raised as loans from BFIs, the remaining 25 percent or Rs 17.52 billion, will be managed through equity.

The promoter company has allocated 20 percent of the project's shares for the residents and general public of the project-affected areas.

As per the UTPC, the project's dam will be constructed in Tilagufa Municipality of Kalikot and the power house in Khandachakra Municipality. The project will be able to generate electricity at peak capacity for up to 6 hours per day during the dry season.

The project is expected to generate a total of 2,318.79 gigawatt hours of electricity annually. Of this, 451.50 gigawatt hours of electricity will be generated during the peak period of the dry season, 205.45 gigawatt hours during the off-peak period, and 1,662.29 gigawatt hours during the rainy season. The electricity generated will be connected to the national transmission system.

The project received a power generation license from the Department of Electricity Development on August 23, 2018. Similarly, a Power Purchase Agreement (PPA) for a capacity of 269.74 MW was concluded with the Nepal Electricity Authority on October 23, 2024.

The project is targeted to be completed within four years from the date of the project construction. The main promoters of the project are Stream Investment, Urja Impact Fund, Robbins USA, and other institutional and individual investors.