V.No. The government formed in 2048 made a strategy to attract domestic and foreign investment for the construction of large power projects to avoid energy crisis in the country. According to the same strategy, the government had taken the 402 megawatt Arun 3rd hydroelectric project to the construction stage with the help of the World Bank loan.

Social organizations inside and outside the country have put forward demands that the project to be built in Sankhuwasabha will spoil the environment, reduce the possibility of small power projects in the country, cause local uprising, China should also accept it and power purchase agreement with India. The terms were also related to China and India .  It was the government's understanding that rather than making Arun in the name of

project victims and campaigners, they wanted to divide it. Stakeholders and some "water resource experts" had been arguing that Nepal would lose a lot by building Arun and natural resources would go into the hands of others . UML, the main opposition party in the House of Representatives, was also negative about Arun. His 'support' was visible especially on issues raised by NGOs. 

Arun Concern Group and Alliance for Energy, NGOs and concerned representatives who participated in the Bank's consultation meeting in Washington, USA, wrote a written letter not to proceed with the construction of Arun if their demands are not met. They returned from the US in June with a letter of intent not to approve the loan at the meeting of the board of directors of the bank on July 11, 2051. 

2051 Asar 14 i.e. June 28, 1994 Engineer Ganesh Ghimire on behalf of the concerned group and Ravi Pradhan on behalf of the Alliance who returned from participating in the consultation meeting in America said that the meeting of the board of directors of the bank will not be held due to their conditions and agenda. On behalf of the government, Water Resources Secretary Suryanath Upadhyay, who returned from participating in the same consultation meeting, said that he was confident that a meeting of the bank's directors would be held and the loan would be approved.

Secretary Upadhyay said that the loan negotiations have ended, but NGOs and stakeholders have claimed that they have not. Stakeholders also claimed that due to pressure from national/international organizations, it would take a long time to prepare loan documents. 

Stakeholders said they were confident that the World Bank's South Asian Head Joseph Wood and Executive Director would give a verbal order to move the meeting. Representatives of Arun Sarokar and Energy Alliance held a separate meeting with the bank's officers, directors, representatives of member countries at the head office of the bank in Washington and briefed them on the disadvantages of Arun . They said that they informed the bank not to accept the loan immediately regarding Arun by holding a press conference in Nepal. 

Engineer Ghimire said that he was surprised that the World Bank called Arun a good project and denied it. At that time, the Asian Development Bank, Japan and others started the process of giving a loan of 8.5 billion for the project, which was estimated to be built at a cost of 38 billion.