Nepal | May 27, 2020

Construction of Arun-III hydro likely to begin by April-end

Himalayan News Service
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Arun III

A view of the switchyard area of the Arun III hydropower project in Makawanpur district, on Monday, August 7, 2017. Photo: RSS/ File

Kathmandu, March 15

Construction works of Arun-III hydroelectric project is expected to begin by the end of April as SJVN Arun-III Power Development Company, a subsidiary of Satluj Jal Vidyut Nigam Ltd, is all set to award the construction contract of the power house this month.

The company had awarded construction contract of dam site last month and the contractor – JP Construction – has already started supplying the construction materials.

According to SK Sharma, managing director of SJVN Arun-III Power Development Company, construction works will begin by the end of April as the company will be awarding the construction contract of Lot-I and Lot-II within this month. The construction period of the project is five years.

“The major works for the hydropower project is the construction of headrace tunnel and we will do our best to complete the project within the stipulated time of five years,” said Sharma.

The 900-megawatt project was supposed to be constructed under the assistance of the World Bank Group some two decades back. However, political polarisation and protests against the reservoir projects back then forced the World Bank to walkout. The project was later awarded to the SJVN, a state-owned company of the Indian government, through competitive bidding some 10 years ago.

Arun-III is an export-based project, which will bring the largest ever foreign direct investment (FDI) from India worth $1.2 billion. Apart from the local share and free energy to the affected area, the government will get Rs 330 billion as royalty in the period of 20 years and the project will also provide 21.9 per cent of the generated energy free of cost.

The project will generate 400 million units of power every year.

The developer will hand over the ownership of the project to the government of Nepal after 20 years of commercial operation.

The government of India has already approved the investment plan of SJVN in Arun-III. And the latest meeting of the board of directors of the Investment Board Nepal, led by Prime Minister KP Sharma Oli, has authorised the IBN to issue generation licence to SJVN Arun-III Power Development Company.

The IBN and SJVN inked a pact in November of 2014 for the development of Arun-III hydropower project. The project was supposed to start energy generation by 2020 as per the agreement. However, the project is now expected to be completed by early 2023, as per the target set by the company.


A version of this article appears in print on March 16, 2018 of The Himalayan Times.


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