Kathmandu, May 20

The government has proposed the World Bank to lead investment in the peaking run-of-the-river 1,061 megawatt Upper Arun Hydropower Project, located in the Sankhuwasabha district.

In a virtual meeting held today, Minister for Energy, Water Resources and Irrigation Barshaman Pun made the proposal to Faris H Hadad-Zervos, the World Bank’s country manager for Nepal, stating that the construction of Upper Arun Hydropower Project has been accorded high priority in the policies and programmes of the government for upcoming fiscal year 2020-21.

During the meeting, Minister Pun urged the World Bank to take the lead in financial management of the project.

“The detailed project report (DPR) of Upper Arun, which is being supported by the World Bank, has reached the final stage,” he said.

In response, Faris promised to take Minister Pun’s proposal to the top level of the World Bank.

“I know Upper Arun is a good project. I will take the proposal of the minister to my top management,” he said.

The government has already decided to move ahead with the construction of the project in the company model under Nepal Electricity Authority (NEA).

NEA’s subsidiary, Arun Hydro Electric Company Ltd has been assigned to build the project.

The project is estimated to cost more than Rs 120 billion.

As per the earlier agreement, along with the World Bank, the European Investment Bank, Employee’s Provident Fund and the Citizen Investment Trust, have also agreed to provide financing for the project.

Other donor agencies have also expressed interest to invest in the project.

As per NEA, the project will manage 30 per cent of equity and remaining 70 per cent of investment through loan.

After completion of the project, it will generate 4.47 billion units of electricity annually and 28 per cent of the electricity will be generated in the dry season.

The NEA plans to complete the project in seven years.

On October 22 last year, the energy ministry had issued a survey licence to NEA for the project.

A version of this article appears in e-paper on May 21, 2020, of The Himalayan Times.