ICRA Nepal has placed the debt instruments of Trishuli Jal Vidhyut Company Limited (TJVCL) on “Watch with Negative Implications” following severe infrastructure damage caused by flash floods in the Bhotekoshi and Trishuli river basins on August 26, 2026.

The credit watch covers Rs. 8.2 billion in total loan limits, comprising Rs. 8.078 billion in long-term facilities, whose rating has been revised to [ICRANP] LBB@, and Rs. 123 million in short-term facilities, revised to [ICRANP] A4@.

The floods created significant operational and construction risks across key hydropower assets in the region, including TJVCL’s 37-MW Upper Trishuli 3B Hydropower Project, which is being developed in Nuwakot and Rasuwa districts.

The disaster also affected the Trishuli 3B Hub Substation, a critical 220 kV transmission facility, as well as the 60-MW Upper Trishuli 3A Hydropower Project, an upstream operational cascade plant.

ICRA Nepal said assessments of the physical damage and its financial impact are still underway. The extent of the damage, repair requirements and the time needed to restore affected infrastructure will determine the project’s financial position and credit profile.

The agency identified several factors that will be important for TJVCL’s credit standing going forward.

First, the company’s ability to repair damaged infrastructure and resume project development within a reasonable timeframe will be critical.

Second, the availability of financial support during the disruption will depend on the timing and adequacy of insurance payouts, as well as promoter support from Nepal Electricity Authority (NEA) and Nepal Telecom (NDCL) to meet debt-service obligations during the downtime.

The flexibility of lenders will also be important, particularly whether commercial banks provide debt restructuring or rescheduling arrangements if required.

Before the floods, the revised cost of the 37-MW Upper Trishuli 3B project was approximately Rs. 11.466 billion, financed through a 70:30 debt-to-equity structure.

ICRA Nepal will continue to monitor the company until the extent of site damage, repair costs and insurance reimbursements become clearer. The final impact on TJVCL’s credit profile will depend on the company’s ability to restore the affected infrastructure and manage its financial obligations during the disruption.