Construction of 900 MW Arun-3 Hydroelectric Project to Start Soon

According to The Kathmandu Post, the construction of 900 MW of Arun-3 hydroelectric project is expected to start soon as the developer has hired a contractor to begin first phase of civil works.

Last week, SJVN Arun-3 Power Development Company (SAPDC), the developer of the hydro project and Jaiprakash Associates of India signed an agreement to start the civil works in the dam area. This is the first time that a civil works contractor has been hired by the project developer. The contractor is in charge of building the dam, diversion tunnel, intake, intake tunnels and head race tunnel.

An official from the Investment Board Nepal (IBN) said, “The contractor has already mobilised a team to the proposed dam site. We hope construction works will begin soon.”

The project developer is also going to hire contractors to build powerhouse and transmission lines, and execute electro and hydro-mechanical works.

The agreement for the development of Arun-3 hydropower was signed between IBN and SJVN in November 2014. The project was supposed to complete by 2020 as per the agreement. However, the financial closure deadline has been pushed back twice by one year and six months so that deadline of 2020 is not expected to be met.

The project is currently in the process of acquiring public forest land. The IBN official said, “To expedite the construction of the project, we have initiated the process of establishing the liaison office on behalf of SAPDC”.

According to IBN, Nepal will receive Rs. 348 billion over 25 years from the project. The project developer will also provide 21.9 percent of the energy generated free of cost, which is worth Rs. 155 billion, plus another Rs. 107 billion in royalties.