Investment Board Nepal (IBN): Projects, PPP Pipeline & Status

The Investment Board Nepal (IBN) is a high-level government agency that facilitates, approves and fast-tracks Nepal's largest investment projects and public-private partnerships (PPPs). It was established in 2011 (2068 Bikram Sambat) and is chaired by the Prime Minister of Nepal, with the day-to-day work run through the Office of the Investment Board headed by a Chief Executive Officer (CEO). Because it sits above line ministries and is led by the head of government, IBN is designed to give mega-projects a single, empowered point of decision rather than leaving them stuck between agencies.

IBN plays a dual role: it is both a national investment-promotion agency that courts foreign direct investment (FDI), and the central authority for structuring PPP and build-own-operate-transfer (BOOT) deals for infrastructure. In practice, most of the projects it handles are large hydropower plants, transmission lines, industrial parks, tourism and airport schemes developed with private or foreign partners under long-term concession agreements.

The Board's core instruments are the survey (study) licence, the project development agreement (PDA), the direct agreement (for lenders), the generation/operation licence and the eventual power purchase or concession arrangement. When people search for the 'investment board nepal', they usually want either how to route a big investment through it, or the status of one of the marquee hydropower projects in its portfolio.

IBN was first created under the Investment Board Act, 2068 (2011). That framework was later modernised by the Public-Private Partnership and Investment Act, 2075 (2019) — the PPPIA — which provides today's legal basis for how IBN structures PPPs and screens major investments. The 2019 Act was intended to give the Board clearer, broader powers because most of the infrastructure it oversees is delivered through the PPP model.

The defining feature of IBN's jurisdiction is the large-project threshold: it handles projects that are too big for ordinary agencies. As reported by legal practitioners and the World Bank, IBN's remit covers hydropower projects with a capacity of 200 MW or more, and non-energy projects with a fixed capital or investment of roughly NPR 6 billion or more. When IBN was first formed in 2011 the bar was higher — around 500 MW for hydropower and NPR 10 billion for foreign investment — and it was lowered over time so more strategic projects could benefit from IBN's one-window facilitation.

Investors below these thresholds are generally handled by the Department of Industry (DoI) and the Foreign Investment and Technology Transfer Act, 2019, not by IBN. This division of labour is why understanding the threshold matters: it determines whether a project is negotiated with the Prime-Minister-chaired Board or with a line agency. Because these figures are set by statute and secondary rules that can be revised, treat the exact numbers as indicative and confirm the current threshold on IBN's official acts-and-regulations page before relying on them.

A typical large project moves through IBN in stages. It usually begins with a survey or study licence that lets a developer prepare a detailed project report (DPR) and environmental studies. Once studies are ready, the Board and developer negotiate a project development agreement (PDA) setting out tariffs, taxes, free-energy and free-share entitlements, local benefits, timelines and risk-sharing. Lenders then require a direct agreement to secure their financing before financial closure.

Decisions are taken at numbered board meetings chaired by the Prime Minister. For example, the 67th meeting of IBN, held on 19 November 2025 under Prime Minister Sushila Karki, cleared a batch of hydropower approvals, survey-permit extensions and work plans in a single sitting. Publishing these decisions is how IBN formalises the pipeline, though the details are often scattered across press releases rather than a single tracker — one reason a consolidated project list is useful.

In fiscal year 2023/24 (2080/81 BS), IBN approved nine large projects representing a combined investment of about NPR 271.26 billion, led by the 900 MW Upper Karnali Hydroelectric Project. That mix — several hydropower schemes plus solar, cement and industrial projects — is representative of what flows through the Board in a normal year.

The Arun-3 Hydroelectric Project (900 MW) on the Arun River in Sankhuwasabha district is IBN's best-known project and one of the largest under construction in Nepal. It is being developed by SJVN Arun-3 Power Development Company (SAPDC), a subsidiary of India's SJVN Limited, on a build-own-operate-transfer basis with a 30-year concession period. The project development agreement was signed in November 2014 and financial closure was achieved in February 2020, after which construction accelerated.

Arun-3 is a run-of-river scheme built around a roughly 70-metre-tall concrete gravity dam, an approximately 11.7 km headrace tunnel and a powerhouse with four Francis turbine units of 225 MW each, generating about 4,019 million units of electricity a year. Estimated to cost on the order of US$1.6 billion (including an associated transmission line), it is export-oriented, with power evacuated toward India via the Dhalkebar-Muzaffarpur corridor.

For Nepal, the headline benefit is 21.9 percent free energy — roughly 197 MW-equivalent of electricity supplied free of cost over the concession — plus local benefits such as free units for directly affected households. As of 2024-25 the project was reported to be well past 70 percent complete and targeting commissioning in the mid-2020s; at IBN's 67th meeting the Board approved forwarding the draft direct agreement to the Cabinet, an important late-stage step.

West Seti is one of Nepal's oldest and most storied hydropower ambitions. After China's CWE Investment Corporation (a China Three Gorges subsidiary) walked away in 2018, IBN signed a memorandum of understanding (MoU) with India's state-owned NHPC Limited in August 2022 to develop West Seti together with the neighbouring Seti River-6 (SR-6) project. IBN's 67th meeting in November 2025 extended the survey permit for the West Seti Reservoir project, now framed at about 800 MW, with the two storage schemes together estimated at around US$2.4 billion. Older documents list West Seti at 750 MW; capacity figures have shifted as the design has been revisited, so treat the exact MW as provisional.

The Lower Arun Hydroelectric Project (669 MW), downstream of Arun-3 in eastern Nepal, is also promoted by an SJVN-linked company, the SJVN Lower Arun Power Development Company. At its 67th meeting IBN authorised its CEO to issue the generation licence to the developer, clearing a key regulatory hurdle. Together with Arun-3, it makes the Arun basin a cornerstone of IBN's portfolio.

Betan Karnali is a newer addition: a 439 MW semi-reservoir project spanning Surkhet and Achham districts in Karnali/far-west Nepal. In November 2025 the Board approved investment in it — with the Employees Provident Fund, Nepal Electricity Authority (NEA) and Vidyut Utpadan Company Limited among the promoters — at an estimated cost of about NPR 93.4 billion, and formed a negotiation committee to conclude the project development agreement. It illustrates IBN's growing role in domestically financed mega-projects, not only foreign-led ones.

IBN's mandate is not limited to power. Its portfolio has included the proposed Nijgadh International Airport in Bara district — envisaged as Nepal's second international airport with a multi-billion-dollar, multi-phase build — for which IBN ran the concessionaire selection process. That project has been repeatedly delayed, including by Supreme Court scrutiny of its environmental impact assessment (EIA), and its future depends on resolving those legal and environmental questions.

The Board also handles industrial and manufacturing investments. In FY 2023/24 it approved a Huaxin cement plant and a large grid-scale solar project, and in late 2025 it granted a survey permit for an auto-service eco-industrial park proposed by a Hong Kong-based group. This mix reflects IBN's role as the gateway for the biggest FDI-backed ventures across sectors, not just rivers.

The Upper Karnali Hydroelectric Project (900 MW), led by India's GMR Group with SJVN, IREDA and NEA as partners, is another long-running IBN project that finally moved into active works after nearly two decades, with plans to export a large block of power to Bangladesh. Taken together, these projects show why IBN matters to investors, students and energy professionals alike: it is the single institution where Nepal's most consequential projects are negotiated and tracked.