The construction of the 900 MW Arun-III hydroelectric project, built with direct foreign investment, has seen 62 percent progress. The promoter company SJVN Arun-III Power Development Company has stated that the project is being built faster than the target.

Arun Dhiman, chief executive officer of SJVN Arun-III Power Development Company, said that the hydromechanical, civil, power plant and electromechanical works of the project are being carried out simultaneously. “So far, the project is being built at a faster pace than the target. So far, the progress of the project has been completed at 62 percent," he said, "We are working with the goal of completing the construction as soon as possible." CEO Dhiman asserted that the progress of the Arun-III hydropower project, which has been advanced through the Public Private Partnership model, is as expected. The promoter company had prepared a schedule to complete the construction of the project by 2025.

The promoter company has claimed that it is working to complete the project within the year 2023/24. In the initial phase, the target was to complete the construction of the project at USD 1.44 billion, but the cost of the project has increased slightly, and the target is set to be completed at USD 1.6 billion.

The electricity generated from this project will be exported to India. Nepal will receive 21.99 percent (197 MW) of electricity free of charge from the 900 MW project. The government has already decided to export the electricity generated by this project to India.

SJVN will own and operate the project for 25 years. After that, the project will automatically come under the ownership of the Government of Nepal. CEO Dhiman claimed that about 64 percent of the workers in this project are Nepalis. Most of those workers are only semi-skilled Nepali workers.

A 70-meter-high dam will be constructed for the Arun-III project. An 11.74 km headrace tunnel (main tunnel) will be constructed. The diameter of the tunnel will be 9.5 meters. Indian Prime Minister Narendra Modi and Nepal's Prime Minister KP Sharma Oli laid the foundation stone of Arun-III hydropower project by pressing the switch in April 2019. A PDA agreement for the project was signed between SAPDC and the Board of Investment on November 25, 2014.

The project received the permit for hydropower generation in 2018 and the permit for construction of transmission line in February 2019. The hydromechanical, civil, electromechanical contracts of the project were awarded in 2018. The company itself will construct a 217 km 400 KV transmission line from the project site in Sankhuwasabha to the Dhalkebar substation. According to the project developer, the progress toward this transmission line has been 21 percent so far.

Of the total capital needed for the project, 30 percent will be managed by the promoter SJVN Arun III Power Development Company's own capital, 60 percent will be from five banks in India and the remaining 10 percent will be loans from two banks in Nepal. The financial management of this project was done on 6 February 2020. The company said that two banks of Nepal will invest 10 percent in this project. Nabil Bank will invest Rs 4.88 billion and Everest Bank will invest Rs 8.12 billion.

“We are going to build the biggest project of Nepal so far. That's why we want to set an example by completing the construction in an orderly manner,” he said. SJVN Limited, the parent company of this promoter company, is constructing various hydroelectric projects with the target of producing 5000 MW of hydropower by 2023.

"Our company is investing in the hydropower sector in various countries with the goal of producing 12,000 megawatts of electricity by the year 2030," said CEO Dhiman.

SJVN is a company owned by the Central Government of India with 64.46 per cent shares. The Indian State of Himachal Pradesh holds 25.51 per cent and the general public holds the rest of the shares.

The construction of Arun III project was stopped three decades ago due to the obstruction of CPN-UML. Three decades ago, the World Bank had prepared to build a 400 MW capacity, but the World Bank backed down from investing due to the UML's opposition.