Nepal’s energy sector – particularly hydropower – is one of the most critical and promising industries in the country. Blessed with abundant water resources ideal for hydroelectric generation, Nepal has developed a number of hydropower projects and has many more in the pipeline. This sector not only powers domestic economic growth but also holds potential for electricity export to neighboring countries. Owing to its strategic importance, the energy industry is heavily regulated and involves multiple government stakeholders. Developers must navigate a complex regime of legislation and oversight by authorities such as the Department of Electricity Development, the Nepal Electricity Authority (NEA), and the Investment Board of Nepal (IBN). Separate licenses and approvals are required for different project stages – survey licenses, generation licenses, power purchase agreements, grid interconnection approvals, and more – each with its own procedural requirements. Successfully bringing an energy project to fruition in Nepal requires a comprehensive understanding of these regulatory layers and a methodical approach to compliance.

Gandhi & Associates has been a pioneer in Nepal’s energy sector legal practice, with unparalleled experience in hydropower and other power project development. Our firm has advised on many of Nepal’s landmark energy projects, representing developers, sponsors, and lenders. We assist clients from the very inception of a project (conducting legal due diligence on project viability and concessions) through to development and operation. Our services include obtaining all necessary licenses and permits, structuring foreign investments and joint ventures in compliance with the Foreign Investment and Technology Transfer Act, negotiating Power Purchase Agreements and Project Development Agreements with the Government of Nepal/NEA, and advising on environmental and land acquisition issues that often accompany energy projects. We also counsel on project financing arrangements, whether through local banks, international lenders, or multilateral development banks, ensuring that financing and security documents align with Nepali law. With our holistic knowledge in this field, we help create a favorable environment for energy projects to be implemented efficiently, legally, and sustainably.

Representative Experience:

• Advising a consortium of Korean developers on a 216 MW, USD 650 million hydropower project, including obtaining all regulatory approvals and securing debt financing from a consortium of international development finance institutions;
• Advising an Indian developer in obtaining the necessary government approvals for developing a nationwide transmission line project valued at over USD 1.75 billion, covering route permits, land rights, and negotiation of wheeling agreements with NEA;
• Advised a Chinese developer on building and operating a 50 MW hydropower plant, one of the few projects in Nepal to secure a USD-denominated Power Purchase Agreement with the Nepal Electricity Authority. We continue to assist the same client in acquiring a second license for a proposed 75 MW hydropower project (USD 300 million investment);
• Assisted a 120 MW hydropower project in preparing a Private Placement Memorandum and related documentation for raising investment from accredited international investors (including markets on Wall Street), ensuring compliance with both Nepali and foreign securities regulations;

Assisted Nepal Oil Corporation in 2017 and again in 2022 with negotiating five-year agreements for the supply of petroleum products with its sole supplier, Indian Oil Corporation – deals collectively valued at over USD 10 billion – including advising on contract terms, payment security mechanisms, and government approvals.