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Nepal Signed USD1.3 billion Deal with India’s SJVNL to Develop 679 MW Lower Arun HEP

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Nepal signs pact with SJVN for 679 MW Lower Arun Electric Hydel ProjectInvestment Board of Nepal (IBN) signed a Memorandum of Understanding (MoU) with the India’s State-owned hydropower major ‘Satluj Jal Vidyut Nigam Ltd’ (SJVNL) for the implementation of 679 Megawatt (MW) Lower Arun Hydro Electric Project (HEP) in eastern Nepal at the cost of US$1.3 billion.

  • It is the 2nd project of SJVNL in Nepal after the Arun-3 hydropower project.

Key Points about ‘Lower Arun HEP’:

i.Location & Allocation: The project lies in Sankhuwasabha and Bhojpur Districts of Nepal, and it was obtained by SJVNL through International Competitive Bidding. It has been allocated to SJVNL for 25 years on ‘Build, Own, Operate, Transfer’ (BOOT) basis.

ii.Type: The project will develop only the tailrace of the 900 MW Arun-3 hydro project; it doesn’t include any reservoir or dam. It will contain 4 Francis-type turbines to generate 2,970 million units of electricity per annum.

iii.The project was scheduled to be completed in 4 years after the onset of construction activities.

iv.900 MW Arun-3 Project: SJVNL signed an MoU in 2008 for implementing the 900 MW Arun-3 Project, and commenced its operation in 2018, at an estimated cost of $1.04 billion in the Arun River, which is located in the Sankhuwasabha district of Nepal.

v.Participants: The MoU was signed by Nand Lal Sharma, MD & CEO of SJVNL, and Sushil Bhatta, Chief Executive Officer(CEO) of IBN. Deputy Prime Minister of Nepal, Bishnu Prasad Paudel and Ambassador of India to Nepal, V M Kwatra, also participated in the event.

vi.As per the 2017 cost estimates, this project is being the single biggest foreign investment project.

What is Tailrace?

i.It is an open channel which will be used to ‘discharge water’ from the turbine after it has been used to produce power in the hydro plant.

ii.The tailrace will guide the water away from the plant to the water body or fields or other open channels.

Note – Arun River – It is a transboundary river that originates from China and passes through Tibet and Nepal. It was named differently as Phung Chu (China), Bum-chu (Tibet), and Arun (Nepal).

Recent Related News:

On 5th May 2021, a small hydro power plant at Chandannath Municipality in Nepal’s Jumla district that was newly rehabilitated with India’s financial assistance of Nepali Rs 26.39 million (INR 1.64 Crore) was inaugurated.

About Satluj Jal Vidyut Nigam Ltd (SJVNL):

Currently it has an installed capacity of 2,016.51 MW and aims to be a 5,000 MW company by 2023.
Headquarters – Shimla, Himachal Pradesh
MD & CEO – Nand Lal Sharma

About Nepal:

Capital – Kathmandu
Prime minister – K. P. Sharma Oli
President – Bidhya Devi Bhandari
Currency – Nepalese rupee