Himal Power Limited

MIGA's first contract of guarantee in Nepal was issued to three Norwegian investors for a hydroelectric power plant, Himal Power Limited (HPL). MIGA coverage totaling $32.8 million insures their equity investments in the 60-megawatt power plant against currency transfer, expropriation, and war risks.

The project represents the first foreign-owned and -operated power project of its kind in Nepal. It also involves MIGA's first collaboration with the Norwegian political risk and export credit insurer, Garanti-Instituttet for Eksportkreditt (GIEK), which reinsured a portion of MIGA's exposure to Statkraft SF. A number of multi-lateral and bilateral agencies are involved in financing the project, including the Asian Development Bank, Eksportfinans (Norway's official export credit lending agency), the Norwegian Agency for Development Corporation (NORAD), IFC, and the Nepal Industrial Development Corporation.

HPL is a run-of-the-river project located a tributary of the Kosi River, one of Nepal's three major river systems, 100 kilometers east of Kathmandu. The project, which is expected to meet up to 25 percent of Nepal's annual electricity needs, will employ about 3,000 nationals during the initial five-year construction period.

The project will comply with all applicable environmental guidelines of the World Bank as well as GIEK and NORAD standards. An extensive environmental impact assessment, including analysis of all biophysical and sociocultural issues associated with the construction and operation of the power plant, was completed in conjunction with local organizations.