Nepal to allow Indian firm to build power plant

KATMANDU, Nepal (AP) — Officials say Nepal's government has endorsed plans for Indian company GMR to build the Himalayan nation's largest hydro power plant.

Govinda Pokhrel of Nepal's national planning commission says a Cabinet meeting endorsed a draft agreement late Thursday to allow the company to build the $1.15 billion power plant with a 900 megawatt capacity.

GMR executives are expected to fly to Nepal Friday and sign the final agreement with Nepalese officials.

Nepal is facing severe power shortages with residents suffering power cuts of up to 12 hours a day.

Years of communist insurgency that was followed by political instability delayed construction of power plants.

Nepal is mountainous and lined with rivers, making it well suited to hydro power dams.