India, Nepal finalise draft to develop 900 MW project

The Investment Board Nepal (IBN) and India's Satluj Jal Vidyut Nigam Ltd. (SJVN) have concluded negotiations for the project development agreement (PDA) on the 900 MW Arun III hydroelectric project.

IBN, the Nepal government's unit that looks after execution of mega projects, and SJVN, a joint venture of India's power ministry and the Himachal Pradesh government, signed the agreement late Wednesday.

IBN CEO Radhesh Pant and SJVN executive director R.K. Agrawal negotiated the PDA.

Earlier, IBN and India's GMR reached a PDA for the 900 MW Upper Karnali hydroelectric project.

Officials involved in negotiations told IANS that IBN will prepare the PDA draft in a week and will dispatch it to SJVN for its consideration.

SJVN will forward its comments and further negotiation will take place before the document is signed.

As per the understanding, each household in six village development committees that will be affected by the project will receive 20 units of energy a month for free.

As well as rural electrification in the affected areas, the Indian company will construct schools and a hospital for the villages.

Nepal will receive 21.9 percent free energy -- equivalent to 197 MW -- from the project.

The Indian side will study within six months of the signing of the PDA whether the project would affect any development projects upstream and downstream.

The two parties have agreed on prioritising raw materials manufactured in Nepal for constructing the project.

The project will be handed over to Nepal after 25 years of operation.

The Nepal government and SJVN signed a memorandum of understanding in March 2008.

The two sides are making arrangements for signing the PDA during the visit of Indian Prime Minister Narendra Modi, on the sidelines of the 18th SAARC summit in Kathmandu, officials said.

(Anil Giri cane be contacted at girianil@gmail.com)