The German government has promised a $67 million development grant to Nepal. The grant will be provided over the next two years, Reuters has reported.

The grant includes $45 million for development of a hydroelectric project in west Nepal. The German government has already provided $92 million for the Middle Marsyangdi power house which is due to enter service in 2002. This 61 MW plant will provide much needed power to the Himalayan state.

The German grant will also cover the foreign currency component of the project. Nepal has a hydropower potential of around 83 000 MW but only 15 per cent of the population has access to electricity.