Himal Power Limited was established in 1992 when Butwal Power Company Limited, a company registered under the Company Act 2021 of Nepal, together with Norwegian companies – Statkraft SF, Kvarner Energy a.s. (now G.E. Hydro Norway) and ABB Energi a.s. (now ABB ALSTOM a.s.) registered a company under the Company Act 2021 of Nepal with an objective to build, own and operate the Khimti I Hydropower Project.

In 1992, in order to make arrangements to expedite the construction of the Khimti I Hydropower Project, His Majesty’s Government of Nepal (HMGN) entered into an agreement with Butwal Power Company to commence preparatory works for the project.

HMGN and Himal Power Limited worked together to establish a Project Agreement to enable HPL to make the necessary arrangements to build the Project. The original Project Agreement with HMGN and the Power Purchase Agreement with Nepal Electricity Authority (NEA) were signed on 30th March 1994. Both of these agreements had to be amended in order for HPL to be in position to finance the Project. Amendments were signed on 24th November 1994 and 15th January 1996.