Nepal clears $1.6 billion hydropower project by China's Three Gorges

This will be the single biggest foreign investment in the Himalayan country

Nepal's investment board on Monday cleared China's Three Gorges International Corp to build a long-delayed $1.6 billion new hydropower project, the single biggest foreign investment in the Himalayan country.

The dam, to be built on the West Seti river in northwest Nepal, will generate 750 megawatts of power when complete, board official Ghanashyam Ojha told Reuters.

A Nepal parliamentary panel first approved the project in 2012 but state-owned Three Gorges had been waiting for the investment board's clearance.

Nepal, one of the world's poorest countries, is opening up its vast hydropower potential to help ease chronic power shortages and grow an economy still emerging from a decade-long civil war.

That has prompted a rush by China and India to invest billions exploiting their neighbour's rivers and import electricity to their energy-hungry economies.

Last year Nepal cleared two major Indian hydropower projects worth a combined $2.4 billion, including what was at the time the largest foreign investment scheme in the country.

New Delhi has long seen Nepal as part of its sphere of influence but growing Chinese investment in recent years has altered the relationship.

In March, Beijing said it would extend a $145 million grant for the upgrade of a 114-km (71-mile) road that links the capital Kathmandu with the Tibetan border, as well as other infrastructure projects.

Three Gorges is China's biggest hydropower developer and operates the world's largest hydropower plant at the Three Gorges on the Yangtze river.