KATHMANDU - The Nepali government and China's Gezhouba Group Co Ltd (CGGC) signed a Memorandum of Understanding (MoU) Sunday on development of the 1200 MW Budhigandaki Hydroelectric Project, one of the highly prioritized projects in Nepal.

The MoU was signed to develop the project under the engineering, procurement, construction, and finance (EPCF) model, after Nepal's cabinet decided to award the contract for developing the project to the Chinese company on May 23.

Under this modality, the Chinese company will coordinate all design, procurement, construction work and finance and also ensures that the whole project is completed as required and in time.

According to the MoU, the Chinese company will execute the project under EPCF modality under the agreed contract arrangement once the financial requirement is acquired.

The MoU, made public by Nepal's Energy Ministry, stated that the Chinese company will facilitate and arrange required financing either in the form of a soft loan or commercial loan or any other means mutually discussed and agreed upon by the Chinese financial institutions on the terms and conditions acceptable to the Nepal government.

Nepali government, on the other hand, needs to communicate to relevant parties to secure required financing for the project under acceptable financing terms and condition of the government to government basis.

It should also extend all possible cooperation and provide all relevant documents, information related feasibility study, environment impact assessment report and detailed design report to the CGGC.