Arun-3 Hydropower Project: Nepal grants license to India’s Satluj Jal Vidyut Nigam Ltd to generate power

Nepal Government has granted power generation licence to Indian government-owned subsidiary Satluj Jal Vidyut Nigam Ltd (SJVNL) from a 900-megawatt (MW) Arun-3 Hydropower Project located in eastern Nepal.
The permit was granted in line with the decision of meeting of Investment Board Nepal (IBN) board of directors chaired by Prime Minister KP Sharma Oli.

Key Facts

IBN also has granted several extensions for financial closure of the project. It includes local share and free energy to residents of affected area. Nepal government will also receive benefits worth Rs. (Nepali) 348 billion from project as royalty, income tax, customs tariff and free energy in concession period of 25 years. The project will also provide 21.9% or 197MW s of the generated energy free of cost to Nepal.

Background

Arun-3 Project is largest capacity project in history of hydroelectricity of Nepa. It is scheduled to be constructed within next five years on Arun river. It is an export-oriented project and it will sell the electricity to India. Indian government so far has approved investment of Rs 57.24 billion proposed by SJVN in Arun-3.
The project was supposed to be constructed under assistance of World Bank Group some two decades back. However, protests against reservoir projects back then forced World Bank to drop the project. The project was later awarded to the Indian company through competitive bidding 10 years ago.

Month: Current Affairs - May, 2018