Landmark PDA Signed for Upper Trishuli-1 Hydropower Project (216MW)

On December 29, 2016, the Government of Nepal entered into a Project Development Agreement (PDA) with Nepal Water & Energy Development Company Pvt. Ltd. (NWEDC) for the development of the 216MW Upper Trishuli-1 Hydropower Project (UT-1). This agreement, structured under a Build-Own-Operate-Transfer (BOOT) model, grants a 35-year concession period.

Sinha Verma Law Concern (SVLC) played a key role as the local legal counsel for the developer consortium, which includes Korea South East Power Co., Ltd. (KOSEP/KOEN), Daelim Industrial Co., Ltd., Kyeryong Construction Industrial Co., Ltd., the International Finance Corporation (IFC) of the World Bank Group, and local partner Mr. Bkesh Pradhanang. Mr. Mahesh Kumar Thapa, Managing Partner of SVLC, led the legal team and was actively involved throughout the negotiation process.

KOSEP/KOEN, a state-owned Korean utility, along with Daelim and Kyeryong—both renowned international contractors—bring substantial expertise to the project. UT-1 stands as the largest hydropower project in Nepal to have a PDA signed specifically for domestic electricity consumption. The total project cost is estimated at USD 550 million, with 75% financed through a project loan syndicated by IFC and the remaining 25% funded through equity investment from the developers.

Previously, in September 2014, the Government of Nepal had signed two major concession agreements for export-oriented hydropower projects. Mr. Thapa also served as the local counsel to GMR Energy for the 900MW Upper Karnali Hydropower Project—one of the two large-scale export projects finalized during that period.

The recent surge in PDA signings has signaled a positive shift in Nepal’s hydropower investment climate. The Government’s active engagement and commitment have been welcomed by the international development community and foreign investors alike, as these agreements reflect Nepal’s vast potential in the hydropower sector.

In line with this vision, the Ministry of Energy has launched a 10-Year Emergency Plan aiming to generate 10,000MW of electricity. As of now, Nepal’s total installed capacity is only 856MW. To support foreign investment, the Government is also in the process of formulating guidelines for foreign currency-denominated Power Purchase Agreements (PPAs), particularly for projects with foreign currency loan components.