GMR Infrastructure announces execution of Project Development Agreement with Government of Nepal

For 900 MW Upper Karnali Hydro Power Project

GMR Infrastructure announced that the GMR Group has finalised and executed the Project Development Agreement for the 900 MW Upper Karnali Hydro Power Project with the Government of Nepal, on 19 September 2014.

The agreement, which is a major milestone for the Project, was signed after due approvals of the Board of Investment Board of Nepal and the cabinet of Govt. of Nepal. This is the largest FDI for Nepal and also the largest investment for GMR Group outside India.

The Upper Karnali Hydro Power Project was awarded to the GMR Group through an International competitive bidding process in 2008 on BOOT basis. The Project, with a capacity of 900 MW, is being developed as an export oriented Project, to be constructed in a period of about 5 years. The Project is located on Karnali river, in the Surkhet, Dailekh and Achham districts of Nepal. The power generated, net of Free Power and power supply to Nepal, if any, is planned to be evacuated through a 400 kV double circuit transmission line up to the interconnection point of Power Grid Corporation of India (PGCIL), in India.

The financial closure of the project (long term tie up of debt and equity capital) is expected to be achieved within September 2016 and thereafter the commencement of the commercial operation is expected by September 2021.

The project is expected to generate about 3500 MUs of energy annually and 420 MUs of energy (12% of installed capacity) has been earmarked as free power to Nepal.

The Nepal Electricity Authority will hold 27% free equity stake in the project including all project royalties and the 100% ownership of the project will be transferred to the Government of Nepal, at the end of the 25 year concession period.

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