The government has cleared the way for financial management with Indian company Grandhi Mallikarjuna Rao (GMR), which has acquired the 900 MW Upper Karnali. With the full text of the directive order in the writ filed in the Supreme Court, it has become easier for the Investment Board office to move forward with the process of financial management.

Even though GMR has submitted documents, financial management has not been completed. On 20th January, GMR had submitted documents to the Investment Board for financial management, claiming that the investment management of the project was ensured as the Indian Renewable Energy Development Agency (IREDA) had given a positive response to invest Rs 65 billion in loans and a group of Nepali banks had given in-principle consent to invest Rs 20 billion in loans.

The 60th meeting of the board has already approved the change in share structure in Upper Karnali, which will have 34 percent of its shares, 34 percent of Indian government company Sutlej Hydropower Development Corporation (SJVN), 5 percent of Indian Renewable Energy Development Agency (IREDA), and 27 percent of Nepal Electricity Authority. Earlier, GMR had 73 percent share and Nepal Electricity Authority had 27 percent share. But GMR gave shares to IREDA and SJVN to raise investment. 

Budhasubba Legal Research Proprietor Advocate Dan Bahadur Budha had filed a writ petition in the Supreme Court on 9 Poush 2081 alleging that the financial management was not done within two years and that an agreement was made to give shares to other companies to invest in the project in India without taking the government's approval. In the writ petition filed against the Office of the Prime Minister and Council of Ministers, Investment Board, Ministry of Energy, GMR and others, a joint bench of Justices Sapana Pradhan Malla and Nityanand Pandey had dismissed the writ petition and issued a directive order. 

However, since the full text was not available, the Investment Board had not moved forward with the financial management process. The full text states that the change in share structure should not be considered otherwise since it was seen to be in accordance with the provisions of the Project Development Agreement (PDA). An expert committee was formed to review the report on the financial management of Upper Karnali submitted by GMR. The Investment Board's expert committee had suggested that GMR could handle the financial management before February 2081.

Although it was learned that the full text had been received, it had not been formally submitted to the board, said Sushil Gyawali, CEO of the board's office. Gyawali said that the full text of the court and the documents related to financial management submitted by GMR would also be presented in the upcoming board meeting. "The board meeting was not possible before the election, we will take it to the board meeting after the election and proceed with the project work as per the board's decision," he said. 

The government and GMR signed a memorandum of understanding on 10 Magh 2064 to survey the Upper Karnali project and generate 300 megawatts of electricity. The government had given the Upper Karnali to GMR under the Build, Own, Operate and Transfer (BOT) model.

After international bidding for the construction of the project, the then government and GMR signed a memorandum of understanding (MoU) for the construction of the project in 2065 (2008). 

On 5 Poush 2066, GMR had applied to the Department of Electricity Development to increase the maximum utilization from 300 MW to 900 MW. After the establishment of the Investment Board in 2068, this project was placed under the office of the Investment Board by a decision taken by the Council of Ministers as per the provisions of the Investment Board Act, 2068. Similarly, on 3 Asoj 2071, a Project Development Agreement (PDA) was signed between the Investment Board and GMR.

Although financial resources had to be raised within two years of the PDA, the deadline was extended by one year on 1 Poush 2073 after the financial resources could not be raised within the stipulated time. After the financial resources could not be raised even in the extended one year, the board extended the deadline again by one year in Kartik 2074.

Since Bhadra 2075 (September 2018), GMR had not been given any extension for financial management. Then, on 31 Asaj 2079, the Council of Ministers decided to extend the deadline for another two years. A writ was filed against the government's decision.

The Supreme Court, while hearing the writ petition on 17 Kartik 2079, had issued an interim order not to implement the extension of the deadline. Then, in a writ petition filed by Ratan Bhandari and others, on 24 Baisakh 2080, the Constitutional Bench of the Supreme Court issued a directive order to the Council of Ministers not to extend the deadline again and ordered to extend the 186 days lost for financial management due to the interim order. Accordingly, the Investment Board decided in its 55th meeting and the Council of Ministers meeting held on 10 Shrawan 2081 extended the deadline for financial management until 4 Magh. The full text also mentions that the government extended the deadline as per the court's order.