The Indian government company Sutlej Jalvidyut Vikas Nigam (SJVN) has signed a Power Sale Agreement (PSA) with Uttar Pradesh Power Corporation Limited (UPPCL) for the sale of 900 MW of power from Arun-3 in Nepal.
In the presence of SJVN Chairman Bhupendra Gupta and Project Director Sushil Sharma, SJVN Chief General Manager Energy Business RK Gupta and UPPCL Director Deepak Raizada signed the MoU. Electricity will be consumed in Uttar Pradesh. The
agreement is an important step towards SJVN's commitment to clean energy transformation and strengthening of energy infrastructure for urban consumers, said Gupta, Chairman and Managing Director of SJVN. SJVN's subsidiary SJVN Arun-3 Power Development Company (SAPDC) is constructing the Arun-3 hydroelectric project in Sankhuwasabha. It is estimated that the construction of Arun-3 project will be completed and production will start in 2027/28. Earlier, SJVN has done a PSA to sell 200 MW of electricity from Arun-3 to Damodar Valley Corporation (DVC), a government company in India. 197 MW electricity produced by Arun 3 will be given to the government.
The 63rd meeting of the Investment Board has decided to recommend to the government to form a Project Review Task Force (PRP) to extend the commercial production date (COD) of the Arun-3 hydropower project. The Investment Board Office has already sent a letter to the Office of the Prime Minister and Council of Ministers for recommendations. But the Cabinet has not made any decision yet.
PRP will study and review the reasons given for the extension of the Arun-3 hydropower project at the project site and prepare a report. The board said that it has submitted an application to extend the term of COD till September 2026, showing the problems of transmission line, land acquisition etc. The construction of Arun-3 should have been completed by March 2025. But after the work was not completed, the company applied to the Board of Investment to extend the COD period by 18 months.
has reported that the physical progress of Arun-3 is 74.6 percent toward production and 54.40 percent toward transmission line. The total estimated cost of the project is 144 billion rupees. The investment board office said that the financial progress is 71.20 percent towards production and 57.80 percent towards transmission line.
In 2008, Sutlej Jalvidyut Nigam, owned by the Government of India, took its license on a competitive basis. Prime Minister KP Sharma Oli and Indian Prime Minister Narendra Modi laid the foundation stone of Arun-3, which was PDA in 2014, in Kathmandu in 2018.
According to the PDA, Nepal will get 21.9 percent or 197 MW of free electricity from the project. The project will have to pay 7 percent energy royalty for 15 years after the start of production and 12 percent energy royalty for the next 10 years to the Government of Nepal. For 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. It is mentioned in the PDA that the project will be handed over to the Government of Nepal after 25 years of completion. Annual energy production from the project will be 4 billion 18 million units.
