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The Investment Board Nepal (IBN) has approved investments for two semi-reservoir hydropower projects with a combined estimated cost of Rs 21.17 billion, following its 68th meeting chaired by Prime Minister Balendra Shah on Friday.

The meeting approved an investment of Rs 10.75 billion for the 58.9-megawatt Nar Khola Semi-Reservoir Hydropower Project and Rs 10.42 billion for the 46.72-megawatt Sani Bheri-3 Semi-Reservoir Hydropower Project.

The Nar Khola project has an estimated cost of Rs 10.75 billion and a generation capacity of 58.9 MW, while Sani Bheri-3 is estimated to cost Rs 10.42 billion and will have a capacity of 46.72 MW.

Together, the two projects will add 105.62 MW of planned hydropower capacity to Nepal’s energy development pipeline.

Arun-3 targets February 2028 commercial operation

The board also decided to facilitate the development of major hydropower projects, including the 900 MW Arun-3 and the 900 MW Upper Karnali projects.

According to the meeting’s decisions, Arun-3 is expected to begin commercial electricity production by February 2028.

Regarding Upper Karnali, the board decided to provide the necessary facilitation to move construction forward immediately in accordance with the provisions of the Project Development Agreement (PDA).

Both projects are among Nepal’s major hydropower developments and are expected to contribute to the country’s electricity generation capacity once completed.

Investment facilitation and new infrastructure priorities

The meeting also decided to delegate the necessary authority to the chief executive officer of the Investment Board’s Office to improve project implementation, facilitate services to investors and strengthen institutional performance.

The board directed its office to establish the necessary legal arrangements to advance proposals that were not solicited by the board through a competitive Swiss Challenge process, where appropriate.

The Swiss Challenge mechanism allows competing parties to submit alternative proposals against an initial unsolicited proposal, subject to the applicable legal framework.

The board also decided to prioritize investment proposals for infrastructure projects based on artificial intelligence and other emerging information technologies. Such projects will be assessed with consideration for their contribution to the use of Nepal’s renewable energy resources, employment generation and broader economic development.

The decision signals the board’s intention to consider technology-based infrastructure alongside conventional energy and other large-scale investment projects.

Senior government officials attend meeting

The meeting was attended by Finance Minister and Investment Board vice-chairperson Dr Swarnim Wagle; Energy, Water Resources and Irrigation Minister Biraj Bhakta Shrestha; Agriculture, Forest and Environment Minister Geeta Chaudhary; and Industry, Commerce and Supplies Minister Deepak Kumar Sah.

Other participants included National Planning Commission Vice-Chairperson Dr Gunakar Bhatta, Chief Secretary Govinda Bahadur Karki, Nepal Rastra Bank Governor Dr Biswo Nath Paudel, Investment Board Chief Executive Officer Yangki Ukyab, other board members and senior government officials.

The decisions cover new hydropower investment approvals, the advancement of existing large-scale projects and measures to facilitate private investment in energy and emerging technology infrastructure.