Following the success of the 900-megawatt Arun-3 hydropower project, which has reached its final stage of construction, Indian government-owned company SJVN Limited has now decided to build the 490-megawatt Arun-4 hydropower project.

According to the Investment Board Nepal, a Project Development Agreement (PDA) for this project has already been signed between the Government of Nepal and SJVN Limited. The Board has also stated that the company has ensured the necessary investment for project development.

Chief Executive Officer of the Investment Board Nepal, Sushil Gyawali, said, “It is precisely because of SJVN’s excellent performance and success in Arun-3 that we have received the company’s investment commitment to develop another important project like Arun-4.”

SJVN Limited is a joint venture between the Government of India and the Government of Himachal Pradesh. The company signed an initial memorandum of understanding with the Government of Nepal for the Arun-3 project on March 2, 2008. After the final PDA was signed in 2014, formal construction of Arun-3 began in May 2018. The project has now achieved more than 90 percent physical progress and has reached its final stage.

The Arun-4 project will be advanced based on the successful model of Arun-3. Accordingly, a joint company will be established for project construction, with 49 percent ownership by the Nepal Electricity Authority and 51 percent by SJVN.

After completion of the project, Nepal will receive 21.9 percent of the total electricity generated (approximately equivalent to 107 megawatts) free of cost on a monthly basis. The Nepal Electricity Authority will have the first right to purchase the generated electricity, while the remaining power is planned to be exported to India and Bangladesh.

According to preliminary estimates, the total cost of constructing the Arun-4 project is expected to be around NPR 49 billion. The project is proposed on the Arun River in Sankhuwasabha district and is expected to further strengthen Indian investment in Nepal’s hydropower sector as well as bilateral cooperation between the two countries.

Urjasanchar