Indian firm gets approval for 2nd hydropower project in Nepal

Kathmandu Days before Nepal Prime Minister Pushpa Kamal Dahal ‘Prachanda’ embarks on an official visit to India, an Indian state-owned company has secured approval for a second hydropower project in the neighbouring country, which now awaits approval from Nepal’s Cabinet.

On 28 May, Investment Board Nepal, led by the Prime Minister, announced the approval of a project development agreement with SJVN Ltd for the development of a 669 MW hydropower project known as ‘Lower Arun Hydro Project’.

An investment of roughly $1.3 billion was earlier approved for the project, the Board said in a statement.

“It is expected that the development of this transformative project of 669 megawatt capacity will contribute significantly to the economic and social development of the country in the context of exporting all the energy of its production and completing the construction on time,” read the statement.

The decision was made during a high-level meeting attended by Nepal’s PM, Minister of Finance, Minister of Energy, Water Resources and Irrigation, Minister of Industry, Commerce and Supply, Minister of Forest and Environment and others.

This comes ahead of Prachanda’s four-day visit to India starting 31 May where discussion is likely to be about energy cooperation and the prospect of exporting power to Bangladesh through India.

India and Nepal share over 20 transmission lines — ranging from 11 kV, 33 kV to 132 kV — that are used for power exchange between the two neighbours. However, there have been power shortages during the winter season due to scarce water.

SJVN Ltd is a joint venture between the central government and the state of Himachal Pradesh. Its subsidiary is already executing a massive project in Nepal — 900 MW Arun-3 Hydro Electric Project — which is slated to be completed in 2024. When completed, it will be Nepal’s largest hydro project.

The Indian company also has another project in Nepal — the 490 MW Arun-4 hydro electric project for which an MoU was signed last May — in the pipeline. In total, SJVN Ltd has three ongoing hydropower projects in Nepal with a combined capacity of 2,059 MW.