Kathmandu, May 11: Prime Minister KP Sharma Oli and visiting Indian Prime Minister Narendra Modi have jointly initiated the construction of the much-awaited Arun III Hydropower Project.
Prime Minister Oli and his Indian counterpart remotely laid the foundation of the construction of the 900-MW capacity project by clicking 'switch on' button today.
Present on the occasion were members of the Council of Ministers and members of Indian delegation.
Nepal Television had aired live the programme from the project construction site, Sankhuwasabha, while the two PMs switched the project-button on.
It may be noted that the Investment Board had granted license to the promoter of Arun III Project, SJVN Nepal, for power generation on May 3.
IBN Chief Executive Officer Maha Prasad Adhikari informed that the construction of important hydropower project has finally kicked off. Locals have expressed their happiness over the beginning of the construction of the project.
Indian Company, Sutlej, is going to construct the mega project. Sutlej has registered a company, SJVN Nepal, for the project construction.
The Project Board and promoter company Sutlej had entered into the Project Development Agreement on 9 Mangsir 2071 BS. Total investment of the project is Rs 104 billion.
The Indian government has already granted permission to borrow Rs 91 billion from Indian Bank and financial institutions. Similarly, the Everest Bank has agreed to provide Rs 5 billion loan for the construction of transmission line from Sankhuwasabha to Dhalkebar.
The Construction Company should handover the project to the government of Nepal in full operation condition after 25 years of its operation.
A goal has been set to complete the construction of the project within next five years. Nepal will get 197 MW electricity free of cost from the project. The promoter company would get benefit of Rs 13.92 billion annually as electricity at free of cost, royalty and other tax.
A Project Development Agreement (PDA) was signed between Investment Board and Sutlej Company of India on November 26, 2014. The promoter company has prepared Detailed Project Report of the project. The Sutlej Company has already distributed compensation to the project affected locals.
Likewise, a road to reach the embankment and powerhouse of the project has been constructed. A total of Rs 2 billion has been spent for the construction of the road.
The Indian Company Sutlej was awarded the license for the project construction through global open competition. The government and Sutlej Company had signed an agreement paper on the promotion of the project in 2064 BS. Likewise, Nepal and India have also signed the Power Trade Agreement.
The government had intensified its preparation for the Arun III Hydropower Project construction on concessional loan of the World Bank in 2052 BS. But the project could not make headway due to political instability in the country. (RSS)
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