SJVN Inks Agreement for 900 MW Arun-3 Nepal Hydro Project

SHIMLA: Public Sector major, Satluj Jal Vidyut Nigam (SJVN) Limited took a major leap in its global pursuit by signing a long awaited Project Development Agreement for the implementation of 900 MW Arun-3 Hyrdo Electric Project with the Government of Nepal.

The agreement was signed at Kathmandu in the presence of Prime Minister Narendra Modi and Nepal Prime Minister Sushil Kumar Koirala by RP Singh, Chairman & Managing Director, SJVN and Radesh Pant, Chief Executive Officer, IBN, Govt. of Nepal on November 25, 2014 a day before the 18th SAARC Summit.

Signing of the agreement.
Signing of the agreement.


Where signing of the agreement will benefit our neighbor with free electricity, India looks forward to ease its crunch of energy shortages through the implementation of the project.

The Company was first awarded the task of executing Arun-3 Project under International Competitive Bidding in the year 2008, but the project was never implemented because of an alleged imbalance in influence by our neighbor.

Things are now moving in the right direction and SJVN has already deployed staff for executing the project. The company was only waiting the signing of Project Development Agreement.

SJVN plans to execute the Arun-3 Hydro Electric Project through its wholly owned subsidiary, Arun-3 Power Development Co. Pvt. Ltd. This agreement allocates 4 units of 225 MW power each, which are projected to generate a total of 4012 MU annually.

Other major features of the project include 68 m high concrete gravity DAM, 149 m deep Surge shaft and an underground power house and11.7 KM long HRT of 9.5m Dia for a design discharge of 343 cumcs. The evacuation of power from the generating station will be through two nos. of 400KV circuit of 310 km length to be connected with Indian grid at Muzaffarpur.

The project that will cost the exchequer an estimated 7000 Crore will be executed with a 75:25 debt to equity ratio. This cost estimate is applicable after an exempt of 50% custom duty approved by the Government of Nepal.

The government will also extend a refund of VAT @ NPR 50 Lakh per MW after COD and exempt from payment of income tax for first 10 Years and thereafter 50% for next five years.

The project will achieve financial closure in 24 months and COD within 60 Months thereafter.  The concession term of the project is 25 Yr after COD.  78.1 % generated power will be brought to Indian grid and estimated tariff including transmission charge will be 4.95 per Unit.

SJVN is already in-charge of running three major power stations with an installed capacity of 2000 MW including India’s largest 1500 MW Nathpa Jhakri Hydro Power Station. It is also in the process of adding 5000 MW of capacity from upcoming projects in Himachal Pradesh, Uttarakhand, Arunachal Pradesh, Bihar, and Maharashtra.

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