Radhesh Panta, CEO of Investment Board Nepal (IBN) and RP Singh, president of SJVNL, signed the agreement in the presence of Prime Minister Sushil Koirala and Indian Prime Minister Narendra Modi on Tuesday.
Arun III had remained idle after the World Bank exited from the mega project nearly two decades ago.
Speaking at the program, Modi expressed happiness at the signing of agreements to develop key hydropower projects like Upper Karnali, Arun III and Pancheshwar Multipurpose Project over the past few months. “Nepal´s hydropower sector was moving at a slow pace in the past. But in the past 100 days, we have succeeded in taking forward different projects which were pending for nearly two decades,” Modi added.
After Modi´s first in the first week of August, Nepal and India have sat in number of bilateral meetings and achieved major breakthroughs in Pancheshwar project and power trading between the two countries.
Modi also said India would provide assistance to Nepal to build a new cross border transmission line.
The cabinet had approved PDA for Arun III on Monday. The project is estimated to cost Rs 104 billion. The government had awarded the project to SJVNL through open bidding. The Indian power developer had proposed to offer 21.9 percent energy free of cost to Nepal.
Talking to Republica, Panta said all the provisions in PDA for Arun II are similar to the Upper Karnali PDA. The government will provide a grant of Rs 4.5 billion to the developer.
Similarly, the developer will enjoy income tax holiday for first 10 years of power generation and 50 percent waiver for another five years if the project starts generation by 2022/23.
“The affected households will get 30 units of electricity free of cost every month. Similarly, they will get the opportunity to buy shares worth Rs 800 million at the rate of Rs 100 per unit. SJVNL will float additional shares worth Rs 800 million at premium rates to people of affected districts,” said Panta.
SJVNL will also build a 56-km transmission line free of cost to link power generated by it to a substation of Nepal Electricity Authority (NEA) for electrification in the project affected areas.
Meanwhile, the government has signed an agreement for concessional line of credit worth US$ 1 billion with Exim Bank of India.
Madhu Kumar Marasini, joint secretary at the finance ministry a representative of Exim Bank signed the agreement on Tuesday.
Likewise, India is also assisting Nepal to set up a mobile soil test laboratory which will provide soil health card to farmers with detailed composition of soil nutrients and the type of treatment required treatment for any disease. “This will help farmers save at least Rs 15,000 to Rs 20,000 per acre of land,” Modi said, adding that such technology is widely used in his home state Gujarat.
Source : Republica