The Investment Board Nepal (IBN) has decided to sign Project Development Agreement of Lower Arun Hydropower Project with Indian company Sutluj Jal Vidyut Nigam (SJVN) Limited, a joint venture between India’s central government and state government of Himanchal Pradesh.

The meeting of IBN held at Singha Durbar chaired by Prime Minister Pushpa Kamal Dahal took the decision to sign the PDA of 669 megawatt of Lower Arun Hydro Power Project with SJVN today.

The board meeting has also approved the draft of the PDA proposal. According to the approved proposal, the Nepal government will receive 21% of the total energy generated free of cost.

Additionally, the company will pay a monthly royalty of 11,000 US Dollars to the Investment Board once production begins. The company will also receive tax exemptions for up to 15 years.

The company will manage the market for the sale of power generated from the project itself. Even after 35 years, when the Nepal government takes over the company, the company will manage the market for the electricity sale if the project is operated at its full capacity.

The Lower Arun Hydroelectric Project will be constructed on the Arun River, bordered by Sankhuwasabha and Bhojpur districts. Sutluj has already received license for the survey of the Lower Arun Hydroelectric Project with a capacity of 669 MW.

Sutluz is also undertaking the construction of the 900 MW Arun III Hydroelectric Project. More than half of the construction work of Arun III has already been completed. The Project is expected to start electricity production within the next one and a half years.

Prime Minister Pushpa Kamal Dahal will be visiting India on May 31. This will be his first foreign trip after becoming the Prime Minister, and he has stated that his main agenda during the visit will be to promote hydropower.