Investment Board Nepal greenlights construction of stalled 900 MW Upper Karnali hydropower project

After a series of deadline extensions, court orders and prolonged uncertainty over financing, the Investment Board Nepal voted at its 68th session to enable the immediate commencement of the Upper Karnali Hydropower Project, a 900-MW scheme in western Nepal. The board has yet to issue a formal letter to the developer, India’s GMR Group, and the Grandhi Mallikarjuna Rao Group, but the decision signals that construction can begin once the notice is received.

GMR previously reported that IREDA had agreed to a loan of INR 65 billion and Nepali banks had offered a provisional Rs 20 billion loan, yet full financial closure was not achieved. A Supreme Court writ filed by lawyer Dan Bahadur Budha contesting the project's share-holding changes was rejected, and the court affirmed that the revised structure complies with the Project Development Agreement. The board’s earlier approval of a new shareholding pattern now allocates 34 % each to GMR and SJVN, 5 % to IREDA, and 27 % to the Nepal Electricity Authority, down from GMR’s former 73 % stake.

Officials indicated that the developer must submit any outstanding documents and finish construction within a five-year window. This move ends a decade-long saga of extensions and legal disputes that had stalled the project’s progress.