Hydropower Development Policy 1991, Electricity Act 1993 and Electricity by laws 1993 have opened avenues for private sector investment in hydroelectric project development in Nepal. Although, it was new to Nepalese investors, efforts had been made by a group of individuals to build and operate Piluwa Khola Hydropower Project in Sankhuwasabha district, Eastern Development Region of Nepal. Piluwa Khola Hydropower Project of 800 KW, at first was identified by the government of Nepal under small project under the study of JICA (Japanese International Fund).