Nepal government awards hydropower project to India's Satluj Jal Vidyut Nigam

Meeting chaired by the Prime Minister of Nepal KP Oli decided to go for the developer company based on an assessment of the listed companies that were selected through an international bidding process.

Created On: Jan 31, 2021 13:14 ISTModified On: Jan 31, 2021 13:14 IST
Nepal awards hydro power project to India

The government of Nepal announced that it has granted the contract for the construction of the lower Arun Hydro Project of 679 MW to Satluj Jal Vidyut Nigam- SJVN of India.

As per the Investment Board of Nepal release, a meeting of IBN on January 29, 2021, made the decision of awarding the contract to an Indian company under the BOOT model- Build, Own, Operate, and Transfer.

The release added that the meeting which was chaired by the Prime Minister of Nepal KP Oli decided to go for the developer company based on an assessment of the listed companies that were selected through an international bidding process.

Key Highlights:

India had put forward the proposal of building lower Arun as per all the conditions set in Arun III.

According to the Arun III agreement, apart from the shares of the project that will be allocated to the locals and free power to the particularly affected areas, the government will be getting a royalty of 330 billion over a period of 20 years.

The project will also be providing 21.9% of generated energy free to Nepal.

The project cost for Lower Arun has been estimated at over 100 Rs. 100 billion.

The installed capacity of the hydropower project can be increased to around 1,000 MW if it will be developed as a storage type project.

About Arun Hydro Power Project of Nepal:

The proposed Hydro Project has a projected capacity of 679 MW of electricity. It will be situated in the Bhojpur and Sankhuwasabha districts of Province 1.

The project is located upstream of the proposed Sapta Koshi High Dam Project and downstream of the ongoing Arun-3 SHEP.

The dam site of the Hydro Project will be located about 34 km upstream while the powerhouse site is 7 km upstream from Tumlingtor Airport.

How India won Nepal’s Hydro Power Project?

Earlier, Power China, a Chinese Stated Owned Company, had shown interest in constructing the Hydro Power Project. The company had even signed an MoU with the Investment Board of Nepal- IBN for developing the project.

However, the Chinese Company decided to withdraw from the project because of its dissatisfaction that the Nepal Government showcased the project at the Investment Summit which was held in March 2019.

Meanwhile, the Indian government showed its interest in the hydropower project during the visit of then Nepal’s Energy, Water Resources, and Irrigation Minister, Barshaman Pun to India.

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