India Secured Approval to Set Up Second Hydropower Project in Nepal
India’s Satluj Jal Vidyut Nigam (SJVN) Limited has been granted permission to develop a second hydropower project in Nepal. Currently, the company is already working on the construction of the 900-megawatt Arun-III hydroelectric project, which is expected to be completed by 2024.
More About the SJVN’s Project
During a meeting chaired by Prime Minister Pushpa Kamal Dahal, the Investment Board Nepal (IBN) approved the draft of the project development agreement (PDA) to be signed with Satluj Jal Vidyut Nigam (SJVN) for the Lower Arun Hydropower project. The Lower Arun project, with a capacity of 669 megawatts, will be developed on the same river. The draft is now awaiting approval by the Cabinet.
SJVN, through its subsidiary Arun-III Power Development Company (SAPDC), will develop the project under a build-own-operate-transfer (BOOT) arrangement. The facility will be operated by SAPDC for 25 years, excluding the construction period, after which the ownership will be transferred to the Nepal government.
As part of the agreement, Nepal will receive 21.9 percent of the electricity generated by the power plant as free power during the initial 25 years of commercial operations.
This decision to award a second project to SJVN comes ahead of Prime Minister Pushpa Kamal Dahal’s visit to India from May 31 to June 3.
The Lower Arun project, located in the Sankhuwasabha and Bhojpur districts, will not have a reservoir or dam and will utilize the tailrace development of the Arun-III project. This means that water will re-enter the river for the Lower Arun project.
The Lower Arun project is the third project on the Arun River, following the Arun-III and Arun-IV hydroelectricity projects. Together, these projects will generate nearly 2,300 megawatts of electricity in the Sankhuwasabha district.
The estimated cost of the Lower Arun project is $1.3 billion, making it the largest foreign investment project in Nepal. This marks the second major project undertaken by India in the region, following the $1.04 billion Arun-III hydroelectric project.
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Which is the biggest hydropower project in Nepal?
Which is the biggest hydropower project of SJVN?
The project is being developed as a joint venture between SJVN and Nepal Electricity Authority (NEA), wherein the former will have the majority stake. The project is scheduled to be completed in 2024.