The financing includes $40m credit and $6m grant from the International Development Association, a $19.3m loan from the International Finance Corporation and a $19.3m loan from the Canada Climate Change Program.
The financing paves the way for Kabeli Energy to start construction of the Kabeli-A run-of-river hydroelectric project, which will be built in Panchthar district in the eastern hills of Nepal.
World Bank lead energy specialist and task team leader for the project Jie Tang said the project design reflects the lessons learned from global hydropower projects, including those in the Himalayas where similar conditions exist.
"The lessons suggest avoiding delays in project preparation and implementation, improving social and environmental management, enhancing sediment handling capacity, and improving the long-term sustainability of the project," Tang said.
The electricity generated from the $108.6m Kabeli-A project will be linked to the national grid through the Kabeli Corridor transmission line, a separate project under construction with World Bank financing.
The Nepal government had offered the project on build, own, operate and transfer model to Kabeli Energy, following an international bidding in 2007.
Kabeli Energy will invest $23m in the project, which is expected to start production in September 2015.
