India's Satluj Jal Vidyut Nigam Limited acquires second hydro project in Nepal

Nepal's government has given India's Satluj Jal Vidyut Nigam Limited permission to build a second hydropower project. The 900 mw Arun-III hydropower project is being built by a state-owned corporation in India, and it will be finished in 2024.

To develop the 669 megawatt (MW) Lower Arun Hydropower Project in eastern Nepal, based on the same river, the Investment Board Nepal (IBN) on Sunday approved the project development agreement (PDA) draught to be signed with India's state-owned SJVN. The meeting was presided over by Prime Minister Pushpa Kamal Dahal, also referred to as Prachanda. The Cabinet needs to approve the draught.

The project is being developed on a build-own-operate-transfer (BOOT) basis by SJVN Arun-III Power Development Company (SAPDC), a wholly-owned subsidiary of Satluj Jal Vidyut Nigam (SJVN), an Indian company. A cooperative venture between the governments of India and Himachal Pradesh is known as SVJN. Apart from the five-year development phase, SAPDC will run the facility for a total of 25 years before handing over ownership to the Nepali government.

During the first 25 years of the power plant's commercial operation, Nepal will receive free power equivalent to 21.9% of the electricity produced there. Just days before Nepal's Prime Minister Pushpa Kamal Dahal's trip to India from May 31 to June 3, it was announced that SJVan will receive a second project. The draught was agreed at the IBN's 54th board meeting, which was presided over by Dahal, according to a news release from the organisation.

At its 53rd meeting on April 14, the IBN approved an investment for the project's development totaling Rs 92.68 billion, as requested by SJVN. The Sankhuwasabha and Bhojpur districts are where the project is situated. Since the Lower Arun project is a tailrace development of Arun-III, which means water re-enters the river for the Lower Arun project, it will not have any reservoirs or dams.

After the 900 MW Arun-III and 695 MW Arun-IV hydroelectricity projects, this is the third project on the Arun River that has been undertaken, all through negotiating periods. Nearly 2,300 MW of energy would be produced by the three projects from the river in the Sankhuwasabha district. According to cost estimates from 2017, the $1.3 billion project the sole largest foreign investment project is situated in the districts of Sankhuwasabha and Bhojpur. This is the southern neighbor's second large-scale project, following the $1.04 billion, 900 MW Arun-3 hydropower project in the Arun river.