Nepal awards Arun-III to Indian state-owned SJVN

The government has awarded 402 MW Arun III hydropower project to Indian state-owned electricity authority Sutlei Vidyut Nigam (SJVN).

A Memorandum of Understanding (MoU) was signed between the government and SJVN in this regard on Sunday. 

Joint Secretary at the Ministry of Water Resources, Anup Kumar Upadhyaya and Nigam's Deputy General Manager Sanjay Uppal signed the MoU. As per the understanding, the SJVN will have to provide 88 MW power to Nepal free of cost which is 21.9 percent of total power generation. Similarly, the SJVN will have to pay 7.5 percent of its total income as royalty to the government. The government will also clamp 0.5 percent of export tax.

It is estimated that Arun-III can generate 2.9 billion units of power during cold season and 1.55 billion units of power during dry season. The project was initially planned by the World Bank. However, in 1995, it cancelled the project due to the protests by different groups which claimed the project was highly expensive and environment-unfriendly.