RBI Rejects IREDA’s Investment Request For Upper Karnali Hydro Project; Company To Reapply

Indian Renewable Energy Development Agency Ltd. said on Saturday that the Reserve Bank of India has not approved its request for equity investment in the 900 megawatt Upper Karnali Hydro Electric Power Project in Nepal. The company said that it will submit its request again.

Ireda had earlier received in-principle approval from its board on July 16, 2024, to invest up to 10% equity in GMR Upper Karnali Hydro Power Limited, Nepal and Karnali Transmission Company Pvt. Ltd., Nepal, in partnership with SJVN Ltd. The total investment was estimated at around Rs 290 crore, subject to approvals from the Government of India and other regulatory authorities. The existing shareholders of GMR Upper Karnali Hydro Power Limited include GMR and the Nepal Electricity Authority.

On Jan. 17, 2025, Ireda further announced that it had signed a non-binding joint venture agreement with GMR Energy Ltd., GMR Power and Urban Infra Ltd., GMR Lion Energy Limited (Mauritius), SJVN, Nepal Electricity Authority, and GMR Upper Karnali Hydropower Ltd, Nepal.

It also said that India’s Department of Investment and Public Asset Management had approved a 5% equity investment by Ireda in both Nepal-based entities, following a recommendation from the Ministry of New and Renewable Energy on January 15, 2025.

Shares of Ireda ended 0.2% lower at Rs 149.59 on Friday compared to a minor gains in the Nifty. The stock has returned 6% in the past 12 months. The analyst consensus price target was Rs 200, according to Bloomberg data, implying a potential upside of 34% from Friday's close.