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State Bank of India to Invest INR 80 Billion in Hydropower Project of Nepal

The State Bank of India (SBI) will be investing a total of Indian Rupees (INR) 80 billion in the Arun III hydropower project of Nepal, which has 900 megawatts (MW) electricity production capacities, reports My Republica.


  • According to the sources, an informal agreement between SBI and SJVN, the company which was awarded the contract for the mega project, has been made to acquire the investment as a loan. A formal agreement will be made soon.
  • The source added that the Director Committee Meeting of the bank has decided the loan extend and interest rate.
  • The 1.4 trillion rupees over the project will be expended for the construction of the structures and additional 11 billion rupees for the transmission lines.
  • The Punjab National Bank via Everest Bank Limited will invest INR 3.60 Billion for the construction of the 268 km long 400 KV transmission line.
  • The source also informed that INR 4.06 billion for the project will be lent from the Nepali banks as Bridge loan without further details over the banks.
  • As per another source, the Nepal Investment Board will issue the license for the construction of the project by mid-June.

The Details:

  • On the other hand, the Indian government has made the approval of INR 92 billion that is to be invested by SJVN.
  • The SJVN will invest INR 25 billion of its own for the mega-project and will take the charge for 25 years excluding the time for the construction of infrastructure.
  • The division of the project has been made with the granting of two separate packages to two Indian companies.
  • For the first package, the Jay Prakash Associates (JP) Limited of India has been awarded the construction of the Dam and diversion with an estimated cost of about INR 18 billion.
  • The Second Package of constructing the power station is awarded to Patel Engineering Company Ltd. with the contract amounting INR 18 billion which includes the 8 km long tunnel in addition.
  • The mega project is targeted to be completed by 2022’s September.

Why it matters:

  • The completion of the project will produce 197 MW electricity with 86 crore unit for free in a year.
  • Nepal will start getting 21.9 percent of the total electricity produced in a year.

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