Arun-3 Hydropower Project: A New Horizon for Nepal's Energy and Economic Progress

The Arun-3 Hydropower Project, located in Sankhuwasabha District of Province 1, stands as a hallmark of Nepal's commitment to harnessing its hydropower potential. Developed by SJVN Arun-3 Power Development Company (SAPDC), the project is poised to play a transformative role in the nation's economic and energy landscape.

Key Project Details

The project boasts an impressive installed capacity of 900 MW with an annual energy generation potential of 3,466 GWh. This reservoir-type plant, operating under a PRoR model with 3.4 hours of daily peaking, is a significant step towards fulfilling the country’s energy demands. The estimated project cost is NPR 144 billion (as per 2020 estimates).

Economic and Social Benefits

Beyond energy generation, the Arun-3 project offers multi-faceted benefits:

• Revenue Generation: Expected revenue of NPR 348 billion during the concession period.

• Rural Electrification: Free provision of 30 units of electricity per month for each Project-Affected Family (PAF).

• Community Shares: NPR 1.6 billion in shares allocated for local communities.

• Employment Opportunities: Creation of approximately 3,000 direct jobs during the construction and operational phases.

• Free Energy: A generous provision of 21.9% of the energy produced.

Infrastructure and Connectivity

The project includes a robust transmission system, comprising a 217 km 400 kV double-circuit line connecting Nepal to Muzaffarpur, India. This is anticipated to enhance regional connectivity and open doors for electricity exports, boosting Nepal’s trade balance.

Current Progress

As of now, construction progress has reached 53%, with 40.63% of financial expenditure already utilized. The transmission line construction, however, lags with only 12.2% physical progress and 28.01% financial progress.

Concession Model

The Arun-3 project follows a Build-Own-Operate-Transfer (BOOT) model with a concession period of 25 years after achieving Commercial Operation Date (COD). This ensures a smooth transfer of the project to the Nepal government post-concession.

Regional Impact

The transmission infrastructure passes through multiple districts, including Sankhuwasabha, Bhojpur, Khotang, Udaypur, Siraha, Dhanusa, and Mahottari. This geographic spread ensures that the project benefits not just one region but impacts a broader spectrum of Nepal's population.

Vision for the Future

The Arun-3 Hydropower Project is more than just a power plant; it symbolizes Nepal's aspirations to become an energy hub in South Asia. By leveraging its hydropower potential, the country aims to generate sustainable economic growth, enhance rural livelihoods, and strengthen regional cooperation through energy trade.

This flagship project underscores the importance of public-private partnerships and international collaboration in driving Nepal's infrastructure and energy ambitions. Once operational, the Arun-3 Hydropower Project will not only brighten homes but also pave the way for a brighter economic future for Nepal.