Nepal, India sign deal for Lower Arun Hydropower project

Nepal has inked a USD 1.3 billion deal with Satluj Jal Vidyut Nigam (SJVN) of India to develop a 679-megawatt hydropower project in eastern Nepal.

Key Points

  • This will be the second mega venture in Nepal, undertaken by India.
  • It is the single largest foreign investment project.
  • It is based on 2017 cost estimates.
  • To develop the project, a memorandum of understanding was signed by Chief Executive Officer of Investment Board of Nepal Sushil Bhatta and Chairman & Managing Director of SJVN Nand Lal Sharma in Kathmandu.
  • This hydropower project will be developed under build, own, operate and transfer (BOOT) model.


679-megawatt Hydropower project is the second mega project undertaken by India after USD 1.04 billion 900-MW Arun-3 hydroelectric project in Nepal.

Build–own–operate–transfer (BOOT) Model

BOOT model is a form of project delivery method. It is usually used for large-scale infrastructure projects. Under such model, a private entity receives a concession from public sector to design, finance, construct, own, and operate a facility under contract. This helps the project proponent to recover its investment, operating and maintenance expenses of the project. This model is usually used in public–private partnerships. First BOT model was used for China Hotel which was built in 1979 by Hong Kong listed conglomerate Hopewell Holdings Ltd.

About Lower Arun Hydro Electric Project

This project has the capacity of 679 MW of electricity. It is located in Sankhuwasabha and Bhojpur districts of Province 1. It will be constructed in downstream of ongoing Arun-3 SHEP and upstream of proposed Sapta Koshi High Dam project. It will be developed on Arun River in Sankhuwasabha District of Province 1 in East Nepal. Project will be developed with the aim of assisting people who live closer to hydropower project by uplifting their socio-economic levels by generating employment for locals and boosting local trade & industries.

Arun River

It is the largest trans-Himalayan River that passes through Nepal. River drains into Sapta Kosi river system. In Tibet, it is known as Men Qu in upper reaches and as Peng Qu for most of its course towards north of Himalayan crests.


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