The long-delayed Upper Karnali Hydropower Project has achieved a critical milestone as its promoters—GMR Energy, SJVN Limited, and the Indian Renewable Energy Development Agency (IREDA)—secured joint financing for the project’s construction.

This marks a significant development 17 years after GMR Energy was awarded the project and 11 years since signing a Project Development Agreement (PDA) with Nepal’s Investment Board. The project had faced repeated delays due to GMR’s financial challenges, leading to multiple extensions for financial closure. The Supreme Court’s decision last year barring further deadline extensions put immense pressure on the company to secure financing.

To overcome its financial hurdles, GMR partnered with Indian state-owned SJVN Limited, known for constructing the Arun III Hydropower Project, and IREDA. The partnership, however, was formalized without prior notification to Nepal’s Investment Board.

On Wednesday, GMR officially submitted the financing documents to the board, along with details about the joint investment arrangement, according to the board’s spokesperson, Pradyumna Upadhyay.

Initially, GMR had planned to construct the 900 MW project independently. However, after failing to arrange funds, it reduced its stake to 34%, allowing SJVN to acquire another 34% and IREDA to take 5%. The remaining equity will be divided among other stakeholders.

IREDA will also provide the majority of the debt financing for the project. Additionally, Nepali banks, led by Nepal Investment Mega Bank, have committed over NPR 40 billion in syndicated loans to support the project.

“The company has submitted a detailed document of over 100 pages, which will be evaluated thoroughly before informing the board,” spokesperson Upadhyay stated.

The Upper Karnali Hydropower Project, once completed, is expected to generate 900 MW of electricity, significantly contributing to Nepal’s energy sector and economic development. The collaboration among Indian and Nepali institutions highlights a major step toward realizing one of Nepal’s largest hydropower projects.