India’s SJVN Limited Secured Approval to Set Up a Second Hydropower Project in Nepal

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.


Which is the biggest hydropower project in Nepal?

The biggest hydropower project in Nepal is the Upper Tamakoshi Hydroelectric Project. It has an installed capacity of 456 megawatts (MW) and is located on the Tamakoshi River in Dolakha District. The project was completed in 2021 and is now operational. It is expected to generate about 2,281 gigawatt-hours (GWh) of electricity annually, which is equivalent to about two-thirds of Nepal’s current electricity generation. The project will help to meet the growing demand for electricity in Nepal and will also help to reduce the country’s reliance on imported energy.

Which is the biggest hydropower project of SJVN?

The biggest hydropower project of SJVN is the 900 MW Arun III Hydroelectric Project, which is located in the Arun River in the Sankhuwasabha district of Nepal. The project is expected to generate about 2,300 million units of electricity per annum. The estimated developmental cost of the project is Rs 4,900 crore, as per the statement.
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.


  • Shubham Mittal

    Shubham Mittal is a renowned current affairs writer and expert in government exam preparation, inspiring readers with insightful articles and guiding aspirants with his expertise.

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