The Investment Board of Nepal (IBN) has approved foreign investment of $200 million for the development of a 170 megawatt solar power plant, the largest-ever solar project in Nepal. It is the first phase of a project to build solar plants with a total installed capacity of 850 megawatt in Nepal.

The project envisages producing 850 megawatt from solar energy within seven years, which represents the total installed capacity of electric power generation in Nepal as of 2016. The ambitious project is funded by a European group under Dolma Impact Fund.

Recently, the government had laid the foundation stone for the construction of 25MW solar plant at Devighat Hydropower Station in Nuwakot—which till date was Nepal’s largest solar power plant at a single location. The government has targeted to complete the project within a year. The government has targeted to build solar plants with a total installed capacity of 500 MW within the next five years.

Dolma, the first international private equity fund for Nepal, has investments in the hydropower, technology, agriculture and health sectors in Nepal. IBN Chief Executive Officer Maha Prasad Adhikari said the project would soon start study on the first phase. “We have permitted the project to work according to its plan based on its performance guarantee,” Adhikari said.

The group has submitted 10 tentative locations to set up the solar project. According to Adhikari, the proposed locations are Lomangthang, Lekhnath Municipality of Pokhara, Patan of Baitadi and Rasuwa among others. “A detailed study in these locations will be approved based on the company’s preliminary report.”

“The first phase of the project is expected to be completed within 2-3 years,” said Adhikari, adding that the remaining project is expected to be completed by another four years.

To facilitate the mega project, the government has now been working to amend a number of laws related to the IBN. While IBN is working to amend the Investment Board Act, the Finance Ministry has started preparations to amend Public Private Partnership (PPP) Act to regulate the board’s operation.

Adhikari said they had planned to transform the board to a one-stop service centre to attract both foreign and local investors who are willing to bring investment projects worth more than Rs10 billion in Nepal.