International Finance Corporation (IFC), private sector wing of the World Bank Group, on Monday signed an agreement with India’s GMR Group to become equity partner in the 900MW Upper Karnali Hydropower Project.

RV Sheshan, president of GMR’s Hydro Energy Business Unit and Harvinder Manocha, GMR’s country head—Nepal, and Raghuveer Sharma, IFC’s chief investment officer and Val Bagatsing, IFC’s resident representative and country head, signed the agreement.

IFC will make a 10 percent share investment and will also lead fund raising for financial closure. GMR also plans to start talks with local banks to involve them in the financial closure process. “This is the first project with which we signed the Project Development Agreement (PDA),” said Radhesh Pant, CEO of Investment Board Nepal. “IFC’s expertise in international financial markets brings complementarily and synergy to GMR’s strengths in regional infrastructure. IFC’s involvement will help the project achieve timely financial closure, construction, and operational milestones.”

“Hydropower is a powerful engine for economic growth in Nepal,” said Vivek Pathak, IFC Director—Asia Pacific. “These projects will boost a common energy market in South Asia, create sustainable employment, improve quality of life, and provide reliable and clean energy for local industry.”

Besides, IFC will also be involved in two transmission projects. The power lines will evacuate power from Upper Karnali and 600MW Upper Marsyangdi projects.

IFC InfraVentures, a global infrastructure project development fund, is co-developer of the projects. IFC will make investment in project development and help achieve financial closure for the projects, which have a total investment outlay of $1.7 billion.