Arun III to conclude financial closure in September

Despite the sluggish progress at the construction of the transmission lines connecting the project site with the nearest sub-station at Tirtire of Dhankuta District, the Arun III Hydropower Project said that the financial closure of the 900 megawatt hydel project will be completed by September 2018.

Once the financial closure is concluded, the Rs. 104 billion project would be the largest hydroelectricity project executed in the country.

We are set to complete the management of the financial resources within the given deadline. As the land compensation and other local issues have been settled, transmission line is the only thing that remains, said Hari Ram Subedi, Residence Representative of Satluj Jal Vidyut Nigamt (SJVN), an Indian-government owned company which is developing the project.

He said that if the transmission lines were not completed in two months, financial closure might be affected. The deadline for the financial closure of Arun III has been extended twice. 

The IBN had extended the deadline to 30 September 2017 as the developer was unable to meet the first deadline of 24 November 2016 for the first time, and the date was again extended to 30 September 2018 for the second time.

Late prime minister of Nepal Sushil Koirala and Indian Prime Minister Narendra Modi had signed an agreement to develop the project in 2014.

According to the Project Development Agreement (PDA) signed in 2014 between the Investment Board of Nepal (IBN) and SJVN, the latter should develop the transmission line. However, the Nepal Electricity Authority (NEA) proposed that it would construct the transmission line for the project and the developer should bear the cost of it. 

“Though the progress seemed slow at the project, the transmission will be completed within September,” IBN Spokesperson Uttam Bhakta Wagle.

Subedi said that the project is witnessing a satisfactory progress at the site as the contracts have been awarded for civil, electro-mechanical and hydro-mechanical works, and civil work for edit channel, belly bridge, small bridges and office building has been already started. 

But, the access road is disturbed by multiple landslide due to heavy rain in the area. The Department of Roads (DoR) had recently completed 28.6 km long access road connecting the project sit with Chhyankuti in the Koshi Highway.

 According to the IBN, the project has earned an overwhelming support form the locals of the project area as they don’t want to lose project for the second time. About two and a half decades ago, the World Bank had shown interest in the project but the deal couldn’t make due to various political interests.

Currently, the SJVN is developing local development programme and employment and skill training plan to fulfil the demand of the PDA and the local people.

Prime Minister KP Sharma Oli and his Indian counterpart Narendra Modi had jointly laid the foundation stone of Arun III Hydel Project in Sankhusabha district by pressing a switch from Kathmandu during Modi’s Nepal visit in May this year.

The dam site of the project is at Numko Fyaksinda and power house at Pukhuwa of Makalu Rural Municipality of Sankhuwasabha.

Nepal will get 21.9 per cent, or 197 mw, energy and 29 per cent equity in the project free of cost. The government had distributed Rs. 1.19 billion compensation for land acquisition in the affected areas at Num, Pathibhara and Yaphu in Makalu and Diding and Pukhuwa in Chichila Rural Municipality.

Project features

Project Cost	Rs. 104 billion
Construction Period	5 years
Project Operation Period	25 years
Design Energy/Year	3,658 Ghw
Free Energy to Nepal	197 MW
PDA Signed	2014
Financial Closure	2018
Commercial Operation	2022/23
Handover to Nepal	2047/48
Gross Head	287 meters
Reservoir	13.94 MCM
Dam Height	68 meters
Dam Type	Concrete gravity dam
Turbine	4*225 MW
Design Discharge	343.42 cumec
Head Race Tunnel	9.5 m diameter, 11.7km length

Source: Investment Board of Nepal

Published in APD in July 2018.