Nepal has made the decision to allow India’s Satluj Jal Vidyut Nigam (SJVN) Limited to develop a second hydropower project in the country. Currently, SJVN is in the process of developing the 900-MW Arun-III hydroelectric project, a run-of-river project situated on the Arun River in Eastern Nepal, with an expected completion date in 2024.
During a meeting of the Investment Board Nepal (IBN) chaired by Prime Minister Pushpa Kamal Dahal, also known as Prachanda, the draft project development agreement (PDA) was approved to be signed with India’s state-owned SJVN for the development of the 669-megawatt (MW) Lower Arun Hydropower project in eastern Nepal, as stated in an official statement.
This decision comes just days before Prime Minister Prachanda’s visit to India, which is scheduled to begin on Wednesday. Before implementation, the draft agreement needs to be endorsed by the Council of Ministers.
In a previous meeting, the IBN had approved an investment of NPR 92.68 billion for the development of the project. The statement released by the IBN expressed that the development of this transformative 669-MW project would be a significant milestone for the socio-economic development of the country.
SJVN has established a local company called Lower Arun Power Development Company in Nepal. The Lower Arun project, located in the Sankhuwasabha and Bhojpur districts, will not involve the construction of a reservoir or dam. Instead, it will utilize the tailrace of the Arun-III project, allowing the water to re-enter the river for the Lower Arun project.
This marks the third project on the Arun River to be undertaken through negotiation windows, following the Arun-III and Arun-IV hydroelectricity projects, which have capacities of 900 MW and 695 MW, respectively. Together, these three projects will generate nearly 2,300 MW of electricity from the river in the Sankhuwasabha district, according to The Kathmandu Post newspaper.
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