Chinese state-owned company, Power China, has announced that it will construct the 679-megawatt Lower Arun hydropower project in Nepal. The company made this announcement during the Nepal Investment Summit here on Saturday.

Speaking at the summit, Song Dongsheng, general manager of Power China, had said that the company will also build the 102MW capacity Upper Trishuli II hydropower project. The Chinese firm has already established a company called Hydro China Corporation for the purpose and received licence to construct Upper Trishuli II project.

Speaking to The Himalayan Times, Song said that the company has already applied for a licence at the Department of Electricity Development (DoED) through the Lower Arun Hydro Electricity Development and Investment Company for the Lower Arun project.

He further said that Power China and Investment Board Nepal (IBN) have already signed a memorandum of understanding for the project.

During Prime Minister KP Sharma Oli’s official visit to China in June last year, Power China and the Ministry of Energy, Water Resources and Irrigation had held discussions to build the Lower Arun hydropower project.

Later in October, Power China had also held consultations with officials of the Nepali Embassy in Beijing regarding the hydropower project.

Earlier, Power China had shown interest to develop the 450MW Kimathanka Arun hydropower project but since the project is still in the study phase, it decided to build the Lower Arun project.

Song further said that the company has already deployed their technical personnel to conduct further study of the Lower Arun project. “We have already built the 50MW Upper Marshyangdi hydropower project and plan to utilise state-of-the-art Chinese technology for the Lower Arun project too.”

Meanwhile, Power China expressed its dissatisfaction after the government showcased the Lower Arun project at the investment summit even though a memorandum of understanding had already been signed by the company with IBN to develop the project.

In another development, the Indian government had proposed to construct the Lower Arun hydropower project in February but at a reduced capacity of 400 megawatts.

In a meeting with Minister for Energy, Water Resources and Irrigation Barshaman Pun in New Delhi, Indian Minister of State for Power, Raj Kumar Singh put forth a proposal that the new project could be developed adopting the same model as that of the 900-MW Arun III project.

In 2016, government had revoked licence of Vidhyut Utpadan Company, a company under the Ministry of Energy, Water Resources and Irrigation, and decided to keep the project in the government basket.