India’s Sutlej offers to sell Arun III power

Dec 18, 2018-SJVN Arun III Power Development Company is proposing to sell 10 percent of the energy available for export from the Arun III Hydropower Project to the Nepal government.

Last week, the Indian developer of the export-oriented 900 MW plant located in eastern Nepal wrote to Investment Board Nepal (IBN) asking if the Nepal government would be willing to buy 10 percent of the total energy available for export.

As per the project development agreement (PDA) signed between SJVN and the board, Nepal will receive 21.9 percent of the total energy generated by the project free of cost while the developer has rights over the rest of the output.

The pact also requires the developer to offer 10 percent of the electricity from its share to the Nepal government on commercial terms.

“As we have secured a market for 90 percent of our share of the energy, we have sent a proposal to IBN asking if the Nepal government would be interested in buying the rest of the electricity as provisioned in the PDA,” said Hari Ram Subedi, resident representative of SJVN in Nepal.

IBN has forwarded SJVN’s proposal to the Nepal Electricity Authority (NEA), the sole offtaker of electricity in the country. The state-owned power utility acknowledged that it had received SJVN’s proposal, but said it contained no commercial terms.

“The proposal we have received does not give the terms and conditions or the selling price,” said NEA spokesperson Prabal Adhikari. “We will ask SJVN to clearly mention the terms and conditions and the tariff rate. If they quote a reasonable rate, we will purchase the electricity generated by Arun III.”

SJVN is carrying out work on the construction site of the Arun III plant on a war footing after Prime Minister KP Sharma Oli and Indian Prime Minister Narendra Modi jointly laid the foundation stone for the project remotely in May during Modi’s Nepal visit. SJVN has appointed contractors to execute the construction work, and currently has 2,000 labourers working on the site.

Workers have started digging a diversion tunnel to channelise the water from the river to the dam.

According to IBN, Nepal will receive Rs348 billion over 25 years from the project. The project developer will also provide 21.9 percent of the energy free of cost, which is worth Rs155 billion, plus another Rs107 billion in royalties.

 

Source: The Kathmandu Post