Arun III on verge of becoming a reality
KATHMANDU, NOV 06 -
Two decades after the World Bank Group pulled out from 900 MW Arun III Hydropower Project, the much discussed project is on the verge of taking off again with the Investment Board Nepal (IBN) concluding the Project Development Agreement (PDA) negotiations with Satluj Jal Vidyut Nigam, a power developer from India.
The meeting had started on Tuesday.
The meeting led by IBN CEO Radhesh Pant and RK Agrawal, executive director of Satluj, has agreed on the content of the PDA, said IBN officials. Based on understanding, the IBN will now prepare a PDA draft and dispatch it to the Indian company. “We will send the draft to Satluj within a week,” said Ghanashyam Ojha, head of external affairs at the IBN.
“Satluj will send back the document if they have any comment or disagreement on the draft and its team will come back to Kathmandu for further negotiations.”
According to the IBN officials, Satluj has agreed to offer six percent share to the locals—one of the major demands of the Nepali side. Likewise, each of the households in six village development committees to be affected by the project are most likely to receive 20 units of energy a month for free. As well as the infrastructure of rural electrification in the affected areas, the Indian company will construct schools and a hospital for the locals, according to the understanding. Nepal will receive 21.9 percent free energy, which is equivalent to 197 MW, from the project. The officials said there had also been an understanding that Satluj will study within six months of the signing of PDA whether the project would affect any development projects upstream and downstream of the Arun III project site.
“If the study suggests an impact on any of the development project, Satluj will take necessary action to mitigate it,” said Ojha. The two parties have also agreed on prioritising raw materials manufactured in Nepal for constructing the project. The project will be handed over to Nepal government after 25 years of its operation. Unlike Upper Karnali, Nepal will not get free equity on the project.
According to Ojha, once endorsed by Satluj, the IBN will take the PDA draft to its board which will then be forwarded for a Cabinet ratification.
The Nepal government and Satluj had entered into a Memorandum of Understanding in March 2008. The IBN had started PDA negotiation with Satluj in 2013. The two sides are making arrangements for the signing the PDA during the visit of Indian PM Narendra Modi, on the sidelines of 18th Saarc Summit in Kathmandu .
Source: The Kathmandu Post
