KATHMANDU, Sept. 4 (Xinhua) -- A consortium of Nepal's five commercial banks on Monday approved credit worth 16 billion Nepali Rupees (140.48 million U.S. dollars) to Hongshi Shivam Cement Private Limited, a Nepal-China joint venture company.
It is one of the largest ever financings pledged by Nepali commercial banks to any industry or infrastructure project, according to Hongshi Shivam Cement Company.
The consortium led by Nepal's NMB Bank, co-led by Nepal Investment Bank and participated by Prabhu Bank, Everest Bank and Nepal SBI Bank pledged the loan to the cement company which has been conducting trial production of cement since May.
Lai Weipeng, general manager and director of Hongshi Shivam Cement and Sunil K.C, chief executive officer of NMB bank exchanged the financing document here on Monday.
The joint venture said that the loan was sought from Nepali banks to conclude financial closure of the cement plant. It has already received approval to inject Foreign Direct Investment (FDI) worth 86.22 million U.S. dollars from Investment Board, Nepal and the central bank. The Chinese company has pledged to inject a total FDI of 359.18 million U.S. dollars in the project, making it the largest FDI in the country's cement industry.
After exchanging the document, Lai said, "We are delighted on the financial closure of the project, which makes Hongshi Shivam Cement the largest cement factory in Nepal." With production capacity of 6,000 tonnes per day, it is the largest cement factory so far established in the Himalayan country.
Company officials said that they would use the loan pledged by the commercial banks to start commercial production of cement.
"We have recently received quality certificates for our cement from the Nepali government. So, we can now start commercial production of cement shortly," Satish Kumar More, a director of Hongshi Shivam, told Xinhua on Monday.
NMB Bank CEO K.C. said that a project like this would support growth in infrastructure, encourage injecting FDI in the economy and help generate employment. In the joint venture company, Hong Kong Red Lion Cement No-3, a subsidiary under Hongshi Holding Limited, has 70 percent stake and Nepal's Shivam Holding has the stake of 30 percent, according to the company.