The PDA was signed at Singha Durbar today on the sidelines of the Saarc Summit in the presence of Prime Minister Sushil Koirala and Indian PM Narendra Modi.

IBN Chief Executive Officer Radhesh Pant and RP Singh, chairman and managing director of SJVNL, have inked a deal for the Rs 104 billion project.

The Arun III PDA is based on the Upper Karnali Hydro Power Project model. As Satluj’s obligations are similar to GMR’s that recently concluded PDA negotiations for the Upper Karnali, Satluj would also study the upstream and downstream impact within six months of PDA signing.

Satluj will complete the construction of the project and start energy generation by 2020.

According to the IBN, Nepal is set to receive Rs 348 billion in 25 years from the project. Satluj will provide 21.9 percent free energy, which is worth Rs 155 billion and Rs 107 billion more in royalty.

As the project will affect 203 houses located in six VDCs of Sankhuwasabha, Satluj has agreed to carry out rural electrification in affected areas under which affected households will receive 30 units energy free each month. More than 3,000 individuals are likely to get employment opportunities from the project.

As per the PDA, the Indian company will allot Rs 1.6 billion worth of shares to the locals. Fifty percent of it will be allotted within two years of project construction commencement. The rest will be allotted later by charging a premium.

The IBN and Satluj started PDA talks in 2013 after Nepal and India signed an MoU for project construction in 2008.