Investment Board Approves Investment for Betan Karnali Semi-Reservoir Hydropower Project

The Investment Board Nepal (IBN) on Wednesday approved investment for the Betan Karnali Semi-Reservoir Hydropower Project (439 MW). The 67th meeting of the Board chaired by Prime Minister and IBN Chairperson Sushila Karki took the decision to this effect. As part of the approval process, the Board formed a talks team to negotiate the Project Development Agreement (PDA) for the project, which requires an estimated investment of Rs 93.4 billion.

The approval follows the resolution of a long-standing boundary dispute between the project’s developer—Betan Karnali Sanchayakarta Hydropower Company Limited—and the GMR-developed Upper Karnali Hydropower Project. GMR had earlier objected to Betan Karnali’s development, citing concerns that water from its dam site would impact the Upper Karnali tailrace. The dispute was recently settled after both sides reached a technical agreement to maintain a two-metre vertical gap between the Upper Karnali tailrace and the Betan Karnali reservoir level.

With the dispute resolved, the Ministry of Energy, Water Resources and Irrigation issued a power generation licence to the Betan Karnali project in mid-July, enabling it to finally advance towards construction after years of delays. The 439-MW project is located on the Karnali River near Chaur Amari in Surkhet district.

The Board meeting also reviewed the progress of the Investment Board Office for fiscal year 2024/25 and endorsed the annual action plan for fiscal year 2025/26 (2082/83 BS).

Additionally, the Board authorized the Chief Executive Officer of IBN to finalize and issue the production licence for the Lower Arun Hydropower Project (669 MW).

It also decided to submit a proposal to the Cabinet seeking approval for the direct agreement related to the Arun-III Hydropower Project (900 MW). Although the 66th Board meeting in late August had approved signing the direct agreement with Indian investors and their lenders, Cabinet endorsement remained pending due to the political transition following the Gen Z movement in September. The agreement is intended to safeguard foreign investments and ensure financing for the project.

The Board further resolved to extend the survey licence timeline of the West Seti Reservoir-based Hydropower Project (800 MW), according to the Office of the Prime Minister and Council of Ministers.