MoU signed between NEA and Sutlej for development of Arun-4 Hydropower Project

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Nepal will get 152 MW free electricity, up to 49% share for NEA

Bhairahawan, 17 May, 2079. A Memorandum of Understanding (MoU) has been signed between Nepal Electricity Authority (NEA) and Satluj Hydropower Corporation(SJVN), a joint venture of the Central Government of India and the Government of Himachal Pradesh, to jointly construct the Arun-4 semi-reservoir hydropower project identified on the Arun River in Sankhuwasabha.

The MoU was signed by NEA Managing Director Kulman Ghising and Sutlej Chairman and Managing Director Nandlal Sharma on Monday in the presence of Prime Minister Sher Bahadur Deuba and his Indian counterpart Narendra Modi.

The construction of Arun-4 is being carried out with the joint investment of government-owned entities as per the joint vision paper on cooperation in the energy sector between the Prime Ministers of the two countries during Prime Minister Deuba’s visit to India in March 2078 BS.
Nepal will get 21.9 percent free energy monthly from Arun-4 as much as from 900 MW Arun III Hydropower Project. Arun-4 falls in the upper stream of ​​the Arun III Hydropower Project being constructed by Satluj Hydropower Corporation. Satluj has been given 21 percent free electricity from the 679 MW Lower Arun Hydropower Project in the down stream of ​​Arun III.

Like Arun III in Arun-4, Nepal will get 21.9 percent free electricity. In addition to this, two companies will have 49 and 51 percent share ownership in the company to be established with the joint investment of NEA and Sutlej for the construction of the project.

The Satluj Hydropower Corporation will take the initiative on behalf of the promoter company to sell the electricity generated from the project and raise the required loan. If the electricity generated from this project can be consumed in Nepal, the Electricity Authority will get the right to buy it. Export to India or Bangladesh only if Nepal does not consume.

The Ministry of Energy, Water Resources and Irrigation had given the survey license of the Arun-4 project to NEA in October, 2008. The current installed capacity of the project is 490.2 MW.

NEA Managing Director Kulman Ghising said that the capacity of the project will be expanded to 695 MW when the power generated from the project is designed to be exported to India. Executive Director Ghising said that Nepal will get 152 MW of electricity free of cost, which will be 21.9 percent of the 695 MW capacity of the project.

“If the capacity of the project is expanded, Nepal will get free electricity on a monthly basis. If we can buy the electricity generated from the project if we need it, the free electricity will be open for sale in India or Bangladesh,” said Ghising.

“Out of the 49 per cent share received by NEA, 10 per cent will be evicted from the project affected districts and 15 per cent from the general public across the country. About Rs.

It is mentioned that the project feasibility report will be reviewed within 90 days and the detailed project report (DPR) will be prepared and the environmental impact assessment (EIA) report will be updated within 18 months.

It falls on the lower bank of the 1061 MW Upper Arun Hydropower Project, which is being constructed by the Arun-4 Authority. Power Development had initially identified Arun-4 as a project based on river flow. However, as the upper Arun is designed in a semi-reservoir model, it is proposed to make Arun-4 semi-reservoir well by making good use of the water flow obtained from it.

The dam site of Arun-4 is located at Bhotkhola Gaonpalika-4 and 5, about 130 meters south of Arun River and Lekseva Dobhan and north of Kapase and Golabasti. The water of Arun river will be diverted through the dam and will be taken to the underground desander through 2.55 km tunnel. The water will be generated  through an underground power house at Sajuwabesi in Makalu Gaonpalika-3 through 6.8 km tunnel from desander.

By generating electricity from the power house, water will be discharged back into Arun river through 473.4 meter tailrace tunnel. The project falls in the intermediate zone of Makalu Barun National Park. The power house and dam area of ​​the project are about 62 and 77 kilometers away from the Sankhuwasabha headquarters Khandbari respectively. The road section from Khandbari to the project area under Koshi

Highway is currently being upgraded. The dam area falls on the Koshi Highway. The village municipality is upgrading about 2 kilometers of rural road to reach the power house area.

According to a study conducted by the department, the estimated cost of the project is around Rs 79.12 billion. The project will generate an average of 2.14 billion units of energy annually.