To be executed by Himtal Hydro Power, a subsidiary of GMR Energy, the project will be built on the Marsyangdi River, in the Manang and Lamjung districts.

The project, which is estimated to cost around $1bn, is in an advanced stage of development and is likely to be completed by the end of fiscal year 2021. The project development agreement is likely to be signed early 2014.

Identified as one of the national priority projects and being facilitated by the Investment Board of Nepal, the project has completed all survey and investigation works, finalized the feasibility studies and has already received a majority of clearances from the government.

GMR Holding chairman GBS Raju said the company has selected IFC as its partners in the hydropower project in Nepal.

"Apart from investing in the company, IFC will also bring its vast experience in financing similar large and complex infrastructure projects, which will add value to the project," added Raju.

"We believe that with the continuous support of IBN, both GMR and IFC shall be able to implement this project in an accelerated manner."

Earlier GMR Energy has acquired 82% stake in Himtal Hydro Power, the developer of the project.