Kathmandu: GMR Group, promoter of the Upper Karnali Hydropower Project, has announced to complete all the processes related to the power purchase agreement (PPA) with Bangladesh within three months.

The PPA will open doors for the Indian GMR Group for financial closure and initiate the construction works of the 900-megawtta project.

GMR is set to push forward the PPA process and the construction of the hydropower process side by side, said representatives of the company at a press conference here on Sunday.

On the occasion, chief of the construction project KK Sharma said the latest updates on the signing of the agreement to sell 500 megawatts electricity from the project to Bangladesh had been received, and other processes related to the project would move ahead accordingly.

The agreement would come into effect after the Central Bank and Ministry of Law of Bangladesh take a decision in this regard, he said.

Nepal Government uses 108 megawatts for free. And the remaining electricity will be sold to India.

As per the agreement made a month ago, Bangladesh will purchase energy produced from the Upper Karnali hydropower project at Rs 8 per unit for 25 years.

“Talks with banks and financial institutions of Nepal and India are underway to manage finance for the project. Preparations are underway to start the distribution of compensations for the lands used for the project,” said Sharma.

“We have got full cooperation and help from the Nepal Government. However, some issues with the project are yet to be sorted out. We hope they would be resolved soon,” he added.

The estimated cost of the project is Rs 140 billion. The Investment Board of Nepal (IBN) and GMR Group on September 19, 2014 had signed a project development agreement to complete the financial closure for the hydropower project within two years.

Following the GMR’s failure to manage finance for the project within the deadline, the IBN however has been extending the contract.