India’s state-owned NHPC Limited has asked Nepal’s Investment Board to provide Rs 40 billion as a Viability Gap Fund (VGF) for the West Seti hydropower project, citing weak financial feasibility and the requirement to supply 21.9 percent electricity free of cost. Nepal’s PPP and Investment Act allows VGF support for infrastructure projects that offer long-term public benefits but limited short-term returns. NHPC has already submitted the project’s Detailed Project Report, which is currently under review. Originally designed as a 750 MW project and later expanded to 800 MW, West Seti has faced repeated delays, including the cancellation of an earlier agreement with China Three Gorges International Corporation.
