Project Finance

Project Finance

Project finance has become the structure of choice for long-term energy, infrastructure and industrial projects in Nepal, where a project’s own future cash flows, rather than a sponsor’s balance sheet, carry the financing. We have built considerable experience advising on the legal and regulatory framework a project finance deal has to be built around.

The Legal Framework

Security and lending run primarily through the Secured Transaction Act, 2063 (2006), which governs how security interests are created, registered and enforced over movable and immovable assets, alongside the National Civil Code, 2074 (2017) and, for licensed lenders, the Bank and Financial Institution Act, 2073 (2017). Security over movable property is registered through the Secured Transaction Registry Office, while immovable property follows separate registration requirements. Unregistered security is generally not enforceable against third parties, which makes registration a load-bearing part of the transaction rather than paperwork to handle later.

Foreign lending into Nepal is shaped by Nepal Rastra Bank’s framework, including the Foreign Exchange Regulation Act, the Foreign Loan By-laws and the Unified Directives. Nepal’s secured transactions framework still has real gaps around securing non-monetary contractual claims, concession agreements and step-in rights, which is exactly why structuring a security package here takes local expertise rather than an imported international term sheet. Syndicated lending is additionally governed by NRB’s consortium lending directives.

What We Do

• Legal and regulatory advisory on the NRB and sectoral rules that apply to a specific project.
• Legal due diligence covering a project’s contracts, licences and regulatory standing before financing is committed.
• Financing and security documentation: loan agreements, security documents and the registration filings that make security enforceable.
• EPC and O&M contracts and the other high-value agreements a project depends on through construction and operation.
• Permits and licences from government agencies for project development.

We advise across every stage of a project: the tender process, contractual structuring, drafting and negotiation, construction, completion and ongoing operation.

Our Experience

We have worked with project developers, private equity sponsors, investors, banks and financial institutions, borrowers, creditors and government agencies on domestic and cross-border project financing across the full project lifecycle.