Indian firm to build $1.15 billion hydropower plant in Nepal

The government of Nepal has signed an agreement with Indian infrastructure engineering and construction company GMR Group under which the firm will build the $1.15 billion Upper Karnali Hydro power plant, giving India an edge, for the moment, over China in the race to develop hydropower resources in Nepal, the Associated Press reported on September 19. Under the agreement—which represents the largest private foreign investment Nepal, according to AP—most of the power generated by the 900 MW plant would be delivered to India, with Nepal retaining 12% of the electricity free of charge. Indian Prime Minister Narendra Modi had previously pledged to support the development of hydroelectric power and other power infrastructure in Nepal, through purchases of the power by Indian states and through the commitment of $1 billion in concessional development loans. China’s Three Gorges International Corp. is reportedly negotiating with the Nepali government on a contract to construct a $1.6 billion, 750 MW hydropower dam on in the western part of the nation.