Nepal approves investment proposal from India's SJVN for 669 MW Lower Arun hydropower project

Apr 14, 2023

Kathmandu [Nepal], April 14 : The Investment Board of Nepal has approved the investment proposal from India's Satluj Jal Vidyut Nigam (SJVN) to build a 669 Mega Watt Lower Arun Hydro project in Nepal.
The investment proposal from SJVN worth 92.68 billion Nepali Rupees was given approval in the 53rd meeting of the Investment Board chaired by Nepal's Prime Minister Pushpa Kamal Dahal on Thursday.
As per the statement from the Investment Board of Nepal, the board of directors have decided to form a "project development agreement negotiation committee' led by the board's chief executive officer, directing it to submit the document of consensus to the board.
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.
Earlier, the Investment Board of Nepal and India's SJVN signed an agreement for the development of the Arun-III hydropower project in November 2014 according to which Nepal will receive Rs 348 billion over 25 years.
In addition, the project developer will also provide 21.9 per cent of energy generated free of cost, which is worth 155 billion Nepali Rupees and another 107 billion Nepali Rupees in royalties.
In May last year, the Managing Director of Nepal Electricity Authority- Kulman Ghising and Nandalal Sharma, chairman of the SJVN, signed the agreement in Lumbini for the development of Arun-IV on behalf of their respective governments.
Nepal will receive 21.9 per cent or 152 megawatts of electricity for free as per the agreement from Arun-IV. In July last year, Nepal signed a deal with the SJVN to develop the 679 MW Lower
Arun. An investment of 92.68 billion Nepali Rupees was approved for the project on Thursday.
The Lower Arun project 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.
Meanwhile, the investment board said it approved an investment worth 167.57 billion Nepali Rupees for five hydroelectric projects on Thursday.
Of total approved investments, 146.2 billion Nepali Rupees is being received through foreign direct investment and 21.37 billion Nepali Rupees is from domestic investors.
Apart from the 669 MW Lower Arun Hydroelectric Project, other projects are the 102 MW Upper Marsyangdi-1 (33.19 billion Nepali Rupees), the 70 MW Dudhkoshi-2 Jaleshwar (20.35 billion Nepali Rupees), the 70.3 MW Simbuwa Khola (13.44 billion Nepali Rupees) and the 43 MW Upper Madi (7.93 billion Nepali Rupees).
Among them, 146.2 billion Nepali Rupees in foreign investment has been approved for three hydroelectric projects, including Lower Arun, Dudhkoshi-2 (Jaleshwar) and Upper Marsyandi hydropower projects.