New Delhi: Days before Nepal Prime Minister Pushpa Kamal Dahal ‘Prachanda’ embarks on an official visit to India, an Indian state-owned company has secured approval for a second hydropower project in the neighbouring country, which now awaits approval from Nepal’s Cabinet.
On 28 May, Investment Board Nepal, led by the Prime Minister, announced the approval of a project development agreement with SJVN Ltd for the development of a 669 MW hydropower project known as ‘Lower Arun Hydro Project’.
An investment of roughly $1.3 billion was earlier approved for the project, the Board said in a statement.
“It is expected that the development of this transformative project of 669 megawatt capacity will contribute significantly to the economic and social development of the country in the context of exporting all the energy of its production and completing the construction on time,” read the statement.
The decision was made during a high-level meeting attended by Nepal’s PM, Minister of Finance, Minister of Energy, Water Resources and Irrigation, Minister of Industry, Commerce and Supply, Minister of Forest and Environment and others.
This comes ahead of Prachanda’s four-day visit to India starting 31 May where discussion is likely to be about energy cooperation and the prospect of exporting power to Bangladesh through India.
India and Nepal share over 20 transmission lines — ranging from 11 kV, 33 kV to 132 kV — that are used for power exchange between the two neighbours. However, there have been power shortages during the winter season due to scarce water.
SJVN Ltd is a joint venture between the central government and the state of Himachal Pradesh. Its subsidiary is already executing a massive project in Nepal — 900 MW Arun-3 Hydro Electric Project — which is slated to be completed in 2024. When completed, it will be Nepal’s largest hydro project.
The Indian company also has another project in Nepal — the 490 MW Arun-4 hydro electric project for which an MoU was signed last May — in the pipeline. In total, SJVN Ltd has three ongoing hydropower projects in Nepal with a combined capacity of 2,059 MW.
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Chinese involvement in Tamor Reservoir Hydropower Project
The statement issued by the Board Monday also mentioned ongoing progress of the 756 MW Tamor Reservoir Hydropower Project.
“The meeting has decided to correspond with the proponent (China) regarding the compliance of the memorandum of understanding dated 19 January 2020 regarding the progress of the 756 MW Tamor Reservoir Hydropower Project,” it said.
The “proponent” in this case is the Power Construction Corporation of China.
Chinese construction of Phukot Karnali and Tamor projects is key to Beijing’s Belt and Road Initiative (BRI).
Last December, after months of political instability, Maoist leader Prachanda’s returned as Prime Minister with the support of former Nepal PM K. P. Sharma Oli’s UML party, was keenly watched by New Delhi.
Some analysts noted that the reunification of the two Communist parties would have pleased Beijing.
ThePrint reported at that time that Prachanda’s return as PM was unlikely to affect energy ties with India. Some hydropower projects have also been shifted from the hands of Chinese to Indian companies such as the 750MW West Seti hydropower project.
(Edited by Tony Rai)
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