Under the terms of the agreement, Nepal Investment Board and India’s Staluj Jal Vidyut Nigam (SJVN) will develop the project on the Arun River, reports Press Trust of India (PTI).
Reuters quoted Nepal Law Minister Narahari Acharya as saying: "We have passed the Arun III agreement. It will be signed this week with the Indian company."
In addition to taking ownership of the project, Nepal will earn $3.48bn in royalty, income and taxes from the power plant for a period of 25 years, officials said.
The Nepal Investment Board external affairs official Ghanashyam Ojha told Associated Press (AP) that India will import more than three quarters of the power generated by the power plant.
The plant will commence operations by 2021.
As part of the deal, state-owned power company SJVN will deliver approximately 21.9% of the generated power from the project to the Nepal government free of charge.
Currently, Nepal produces 800MW of hydropower, which is much less than the required 1,400MW, although it has the potential to generate 42,000MW of hydro power.
The Indian companies are considering investment in Nepal’s hydropower projects as part of an electricity trading pact signed last month between the two countries.
Image: Nepal has potential to produce 42,000MW of hydroelectric power. Photo: courtesy of markuso/ Freedigitaphotos.net.
