Himal Power Limited

MIGA has provided a guarantee of $11 million to Bergenshalvoens Kommunale Kraftselskap AS (BKK), of Norway, to cover its $12.2 million acquisition of equity in Himal Power Limited (HPL), of Nepal. MIGA was involved in providing guarantees to sponsors of this project in 1996, including Statkraft SF, of Norway, and is now supporting BKK's purchase of part of Statkraf's equity. BKK required MIGA's coverage as a condition of acquisition. The coverage period is 15 years, and is against the risks of transfer restriction, expropriation and war and civil disturbance.

HPL is a 60 MW run-of-the-river project located on a tributary of the Tama Khosi River, one of Nepal's major rivers, 100 kilometers east of Kathmandu. The project was the first foreign direct investment in Nepal's energy sector and, at commissioning in 2000, it was projected that it would account for 22 percent of the countrys installed capacity for electricity. Since becoming operational in July 2000, the project has significantly improved the supply of electricity to the national grid. In addition, the project's community outreach and development efforts have had a notable impact, especially in the areas of public health, education, and development infrastructure (e.g., roads, bridges and irrigation works). In particular, efforts to introduce and expand low-cost rural electrification to the project area have had a significant local development impact.