FRANKFURT, Germany, December 18 /PRNewswire/ --

- Major Development Contribution Through Sustainable and Environmentally Sound Electricity Generation. Project to Avoid Some 340,000 Tonnes of CO2 p.a.

- Around EUR 180 Million Financed Through KfW Entwicklungsbank

In a ceremony attended by representatives of the German Federal Ministry for Economic Cooperation and Development (BMZ) and KfW Entwicklungsbank, the Government of Nepal has inaugurated and put into operation the Middle Marsyangdi hydropower plant situated west of the capital Kathmandu. KfW Entwicklungsbank financed the power plant on behalf of the BMZ with some EUR 180 million while the Nepalese side financed EUR 98 million. With an installed capacity of 72 MW the project contributes to significantly increasing the power plant capacity of 616 MW available thus far in Nepal. By improving the supply of electricity it will create important preconditions for the economic development of the bitterly poor country.

Situated on the Marsyangdi, a river with vast hydraulic potential, the new power plant requires no major alterations of the landscape as it has a dam with a storage pond just large enough for daily peak load. Compared with the burning of fossil fuels, the project can reduce CO2 emissions by around 340,000 tonnes each year.

In Nepal, promoting hydropower - an energy resource that requires no current imports - is more than just helping to strengthen the Nepalese energy system. At the same time, financing this CO2-free energy source contributes to protecting the Earth's climate. The enormous hydropower potential is being used for the development of this country, which is otherwise poor in natural resources. Environmentally friendly hydropower helps to create jobs, enhance economic growth and reduce poverty, said Wolfgang Kroh, member of the Managing Board of KfW Bankengruppe.

The hydropower plant was planned by the German engineering firm Fichter GmbH Co, which supervised the construction, and built by Dywidag Germany.

KfW Entwicklungsbank also supported a so-called Neighborhood Support Programme (NSP) in the vicinity of the project area. It has improved the living conditions of the local population by promoting community facilities - specifically by expanding schools, erecting health stations, extending the water supply and building rural roads.

KfW financed a first 69-MW hydropower plant along the Marsyangdi River in the 1980s. Both power plants together form the backbone of Nepal's energy system. KfW Entwicklungsbank has been operating in Nepal on behalf of the BMZ since 1962 and is currently supporting 12 projects in the areas of energy, health care and municipal development. Around two thirds of all commitments made so far have benefited the energy sector.

Further information: Dr. Charis Pothig, Phone: +49(0)69-7431-4683, E-Mail: charis.poethig@kfw.de