The 1,063 MW Upper Arun Semi-Reservoir Hydropower Project has an estimated cost of $1.75 billion (about Rs. 214 billion), including interest and cost increases during the construction period.
What you should know
The 1,063 MW Upper Arun Semi-Reservoir Hydropower Project to be built in Bhotkhola Rural Municipality of Sankhuwasabha has an estimated cost of $1.75 billion (approximately Rs. 214 billion), including interest and cost increases during the construction period.
The Upper Arun project, which will be built under the leadership of Nepal Electricity Authority, will be financed by 70 percent debt and 30 percent equity. It has been proposed that 30 percent equity will be considered 100 percent, and 51 percent will be incorporated and 49 percent will be ordinary shares. Rs 36.67 billion will be raised from the founding shareholders and Rs 35.23 billion from the ordinary shareholders.
It is proposed that the provincial government and local levels, the authority, Nepal Telecom, Employees Provident Fund, Citizens Investment Fund, Social Security Fund, HIDCL, insurance companies and subsidiaries of the authority will be among the 51 percent founding shareholders.
Minister for Energy, Water Resources and Irrigation Kulman Ghising took information about the proposed investment modality prepared along with the financial analysis of the project and directed it to be submitted for necessary approval.
He said that since both the projects have been in the news for a long time, the investment modality should now be finalized and taken for construction.
Arrangements have been made for 49 percent of the common shareholders to be foreign-employed and non-resident Nepalis, employees of the founding shareholder organizations, project-affected people and the general public. Upper Arun Hydro-Electric Limited has been established for the construction of the project.
An investment of Rs 168 billion will be made through co-financing from banks and financial institutions for the construction of the project. After the World Bank's investment was in doubt, the government is going to take Upper Arun forward with the investment of banks and financial institutions within the country and Nepalis living in the country and abroad. An understanding has been reached between the NEA, the project promoter company and banks and financial institutions for an investment of about Rs 53 billion through co-financing in the project.
The project will generate 4.53 billion units of electricity annually. The project is currently undergoing pre-construction work. A 21-kilometer access road is being constructed from the power house to the dam site of the geographically remote and complex project.
An access road is under construction from the proposed power plant in Chhongrang near Golabazar of Bhotkhola Rural Municipality-4 to the dam construction site near Chepuwa village, ward no. 2 of the same rural municipality in the upper coastal area. The Koshi Highway has reached Chhongrang. The project is constructing a 70-meter-long steel arch bridge over the Arun River to bypass the Koshi Highway and reach the project site.
