Cabinet okays Rs 5,792-cr investment into SJVN’s 669 MW Lower Arun Hydro Electric Project in Nepal

New Delhi: The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, has approved the investment of Rs 5,792.36 crores (cost to completion) for 669 MW Lower Arun Hydro Electric Project (LAHEP) at a levelised tariff of Rs 4.99 per unit.

The Cabinet has also accorded ex-post facto approval for Special Purpose Vehicle (SPV) SJVN Lower Arun Power Development Company Private Limited (SLPDC) to undertake the implementation of LAHEP. SLPDC is a wholly-owned subsidiary of SJVN incorporated in Nepal. In addition to this, the Cabinet has also approved the equity investment of Rs 17,37.70 crore in SLPDC.

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The 669 MW Lower Arun Hydro Electric Project will have four units of 167.25 MW each and is located downstream of 900 MW Arun-3 Hydro Electric Project on river Arun in Sankhuwasabha district of the province-1 in Nepal. A tail race development of Arun-3 HEP, the project will not have any reservoir or dam and will operate as a Tandem Operation System with Arun-3 HEP. This project is designed to generate 2,900 million units of energy annually.

SJVN bagged the project through international competitive bidding and the project is being implemented on Build-Own-Operate and Transfer (BOOT) basis with active support from the Ministry of Power. The project shall be commissioned within a span of 60 months from the date of investment approval. The generated power shall be evacuated through under-construction 217 km 400 KV Double Circuit Transmission Line up to Sitamarhi, Bihar.

The Project Development Agreement of LAHEP was signed between the Investment Board of Nepal and SJVN on June 1, 2023.

"SJVN is a key partner and trusted investor in socio-economic development of Nepal. The execution of mega hydro projects is a mutually beneficial endeavour for both nations as it will result in the economic growth of India and Nepal. The power generated from this project will be fully utilised in Nepal and Indian grids and will help in providing grid stability. Besides adding valuable renewable energy to the grid, the project would also lead to carbon emission reduction of about 26 lakh tonnes annually," said SJVN.

The project shall also provide opportunity to Indian contractors to participate in construction besides the export of construction material and equipment from India to Nepal. It shall provide employment opportunities to both countries' citizens and improve the bilateral relations between them, said SJVN.

Presently, SJVN is executing three hydro projects in Nepal: 900 MW Arun-3, 669 MW Lower Arun and 630 MW Arun-4 HEPs, which totals to 2,199 MW.

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