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The Investment Board Nepal (IBN) and India’s Satluj Jal Vidyut Nigam (SJVN) have concluded negotiations for the project development agreement (PDA) on the 900MW 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 chief executive Radhesh Pant and SJVN executive director R K Agrawal negotiated the PDA.
Earlier, IBN and India’s GMR reached a PDA for the 900MW Upper Karnali hydroelectric project.
Officials involved in negotiations said 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% free energy - equivalent to 197MW - 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 PDA template for Arun III will basically be similar to that of Upper Karnali Hydro Power Project. GMR India has agreed to conduct a study on downstream impact within six months from the PDA signing, and construct a re-regulating dam, if needed.
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.
