India Secured Approval to Set Up Second Hydropower Project in Nepal

Nepal has decided to allow India’s Satluj Jal Vidyut Nigam (SJVN) Limited to develop a second hydropower project in the country. At present SJVN is developing a 900-MW Arun -III hydroelectric project, a run-of-river located on the Arun River in Eastern Nepal, scheduled to be completed in 2024. A meeting of the Investment Board Nepal (IBN) chaired by Prime Minister Pushpa Kamal Dahal aka Prachanda approved the draft project development agreement (PDA) to be signed with India’s state-owned SJVN to develop the 669-megawatt (MW) Lower Arun Hydropower project in eastern Nepal.

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India Secured Approval to Set Up Second Hydropower Project in Nepal: Key Points

• The decision for development comes days before Prime Minister Prachanda visited India.
• The draft needs to be endorsed by the Council of Ministers before it gets implemented. The previous meeting of the IBN had approved a Rs 92.68 billion investment for the development of the project.
• The development of this 669-MW transformative project will prove to be a milestone for the socio-economic development of the country, according to the statement by the IBN.
• The SJVN has formed a local company, Lower Arun Power Development Company, in Nepal.
• The Lower Arun project located in the Sankhuwasabha and Bhojpur districts will not have any reservoir or dam and will be a tailrace development of Arun-III, which will mean water re-enters the river for the Lower Arun project.
• This is the third project undertaken, all through negotiation windows, on the Arun River after the 900 MW Arun-III and 695 MW Arun-IV hydroelectricity projects.
• The three projects will generate nearly 2,300 MW of electricity from the river in the Sankhuwasabha district.

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