Damodar Valley Corporation (DVC), a government company of India, has signed an agreement to buy 200 MW of electricity from the 900 MW Arun-3 hydroelectric project being built by the Satjal Hydropower Corporation (SJVN), which is owned by the Government of India. It is mentioned in the Indian media that SJVN and DVCBC have signed a Power Sale Agreement (PSA) last Friday in New Delhi, India.

In the presence of SJVN Chairman and Managing Director Bhupendra Gupta and DVC Executive Director Sanjiv Srivastava  According to the Indian media, the electricity sale agreement has been signed. The project is being constructed through SJVN's subsidiary SJVN Arun-3 Power Development Company.

Arun-3 hydropower project is expected to be operational from 2027/2028, mentioned in the Indian media . Due to the important cooperation between Nepal and India, it aims to increase regional energy security and promote economic development through sustainable hydropower generation in the Arun River Basin.

Investment Board spokesperson Pradyumna Prasad Upadhyay said that since SJVN has to find the electricity market, it can make a deal. However, he said that the board could not get the information.  According to the

project development agreement, construction should have been completed by March 2025. But after the work failed, the company applied to the Board of Investment to extend the commercial production date (COD) by 18 months. But he said that he is in the process of increasing the time of COD.

'Recently the term of Arun 3's COD has expired, there has been a request to extend the time,' he said. In the agenda of the 63rd meeting of the Board of Investment held on Monday  He said that PRP committee will be formed. He said that the report will be submitted in 15 to 20 days after the committee is formed and the COD time will be increased based on that.

In the second week of May, India's Minister of Electricity Manoharlal Khattar, while monitoring and observing the project, directed towards the production of Arun-3. 75/80 percent and 30 percent physical progress towards the transmission line has been reported. The total estimated cost of the project is 144 billion rupees.

In 2008, Sutlej Jalvidyut Nigam, owned by the Government of India, took its license on a competitive basis . The foundation stone of Arun-3 was laid in 2018 with a Project Development Agreement (PDA) signed in 2014.

According to the PDA, Nepal will get 21.9 percent or 197 megawatts of free electricity from the project. The project will have to pay 7% energy royalty for 15 years after the start of production and 12% energy royalty for the next 10 years to the Government of Nepal. Similarly, up to 15 years after the start of production, 400 rupees per image and 1800 rupees per image for the next 10 years will have to be paid to the government.