Arun-III PDA gets political backing


      The project plans to sell 78.1 per cent of electricity to India

    Arun HydropowerKATHMANDU: The Investment Board Nepal (IBN) is all set to forward the final draft of the Project Development Agreement (PDA) on 900-megawatt Arun-3 hydroelectric project to the Cabinet, as major political parties today gave their consent to sign the pact with India’s state-owned Satluj Jal Vidyut Nigam (SJVN), the developer of the project.

    The IBN, which is headed by Prime Minister Sushil Koirala, today held comprehensive discussions with leaders of Nepali Congress (NC), the CPN-UML and Madhesi parties, including Madhesi Janadhikar Forum, Sadbhavana Party and Tarai-Madesh Democratic Party.

    “In the morning PM Koirala met with leaders of the NC and Madhesi parties, who were very supportive of the initiative taken by the IBN to create a groundwork for signing of the PDA with SJVN,” Ghanashyam Ojha, head of external affairs at the IBN, said. “In the evening, the Premier met with leaders of the CPN-UML, who were also positive about the project.”

    Among others, the IBN also held discussions with UCPN (Maoist) leader Baburam Bhattarai, who, according to Ojha, also backed the construction of the project. “With the backing of these leaders, we are now set to table the final draft of the PDA during Monday’s Cabinet meeting,” Ojha said.

    Cabinet’s formal approval would finally pave the way for the IBN and SJVN to sign the final deal — most probably during the 18th SAARC Summit scheduled for November 26-27 in Kathmandu, when Indian Prime Minister Narendra Modi will be here.

    The IBN has been holding PDA negotiations with SJVN for the last one-and-a-half years. If both the parties are able to strike the deal, Nepal’s hydro sector would witness sealing of the second PDA on hydroelectric project since the signing of 900MW Upper Karnali PDA with GMR Energy of India on September 19.

    Like the Upper Karnali project, Arun-3 is also an export-oriented project being built under 25-year BOOT (build-own-operate-transfer) model. This means the project, estimated to cost over Rs 100 billion, will have to be handed over to the government in a good condition after 25 years of commencing commercial operation.

    The project, which aims to complete construction works within five years of signing the PDA, plans to sell 78.1 per cent of the electricity in India and extend 21.9 per cent power — or 197.1 megawatts — free of cost to the government. The market value of the free electricity extended throughout the 25-year concession period hovers around Rs 166 billion.

    Source : The Himalayan Times