Kathmandu, (IANS) : The Nepalese government and a Chinese firm have signed an agreement to develop a 1200 MW hydroelectric project, officials said.

The Memorandum of Understanding (MoU) was signed on Sunday to develop the Budhigandaki project under the engineering, procurement, construction, and finance (EPCF) model, after Nepal’s cabinet decided to award the contract to the China Gezhouba Group Co. Ltd (CGGC) last month, Xinhua news agency reported.

Under this modality, the CGGC will manage all design, procurement, construction work and financial requirements.

The MoU, made public by Nepal’s Energy Ministry, stated that the firm will facilitate and arrange required financing either in the form of a soft 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.