India has expressed a positive stance toward advancing the 1,063 MW Upper Arun Project, which Nepal plans to develop with financial support from the World Bank.

The project, with an estimated cost of NPR 285 billion, has already secured agreements with the World Bank and other donors. However, before finalizing loan financing, the World Bank engaged in discussions with India and Bangladesh, the downstream countries, to secure their consent for the project.

In response to the World Bank’s inquiry, Bangladesh raised some technical questions, which Nepal has already addressed. While Bangladesh has shown a favorable outlook toward the project, India had not initially responded, citing the preoccupation with last year’s elections.

Following the formation of a new government, there was still no response from India, leading to uncertainty regarding the project’s progress. The World Bank emphasized that without the approval of neighboring countries, it would be unable to proceed with its investment.

However, officials noted that India’s state-owned company SJVN, which is involved in constructing three other projects on the Arun River, has expressed interest in participating in the Upper Arun project. India’s main concern has been the potential impact of the Upper Arun project on the Arun-IV Project, which SJVN is also planning to develop.

Minister of Energy, Water Resources, and Irrigation, Dipak Khadka, stated that ongoing discussions with India have been productive, and India is now showing a positive attitude toward granting consent for the project. The concerns regarding the Arun-IV project have been resolved through dialogue.

SJVN is currently constructing the 900 MW Arun III hydropower project and is responsible for the Arun IV project, which will be located upstream. Initially, there were concerns that land required for the Upper Arun project might interfere with the Arun-IV project. A joint technical team from Nepal and India conducted a site study, which showed that releasing some land from the Upper Arun project would actually enhance the capacity of the Arun IV project. Based on this finding, both parties are nearly in agreement to proceed accordingly.

Once the technical aspects are agreed upon, India will send a formal letter to the World Bank confirming its consent to move forward with the project. Minister Khadka expressed optimism that the approval will be received soon.

The World Bank has also reiterated its commitment to providing financial support for the Upper Arun project, contingent upon reaching an understanding with neighboring countries. David Sislian, the Regional Country Director for Nepal, Maldives, and Sri Lanka at the World Bank, emphasized that while some questions have been raised by Nepal’s neighbors, consensus within the region is vital for the project’s success.

“The World Bank is ready to evaluate the project once an agreement is reached with the neighboring countries,” said Sislian. “We are hopeful that a consensus will be achieved in the coming months.”

The company plans to begin construction in 2026 and complete the project by 2032. It has already made significant progress in compensating for the physical structures on the acquired land and rehabilitating displaced individuals.

The Upper Arun project is designed to operate at full capacity for 6 hours a day during the winter months when electricity demand is higher. The project is expected to generate an annual output of 4.51 billion units of electricity, with 30 percent of this production occurring during the winter months. The electricity will be transmitted to the national grid via a 400 kV transmission line.

Construction of the access road for the Upper Arun project has already begun. A 21-kilometer road from the powerhouse to the dam site is under construction. Heavy equipment and construction materials are being transported by helicopter to facilitate the construction of a two-kilometer tunnel connecting Namase and Ruku in Bhotkhola Rural Municipality.

A joint venture between India’s Gayatri Projects Limited and Nepal’s Kankai International Builders was awarded the contract for the access road, worth NPR 7.91 billion (including provisional sum and taxes). The contract began in May 2023, with the goal to complete construction by January 2026.

The company also plans to complete the tender design work and prepare bidding documents by the end of the current fiscal year. Additionally, the hydraulic model study is scheduled for completion within this fiscal year.

Furthermore, the company aims to distribute the remaining compensation and indemnity payments for the construction of the main project structures, access road, and staff housing within the current year.

Source: Online Khabar