The Department of Electricity Development (DoED) has refused to grant a survey licence for the Lower Arun Hydropower Project to state-owned Vidhyut Utpadan Company as it has already appointed a consultant to conduct preliminary studies.

Last June, Vidhyut Utpadan had applied for survey permits for the 617 MW Bheri-1, 679 MW Lower Arun, 307 MW Jagadulla Khola and 450 MW Kimathanka Arun hydropower projects. 

The department forwarded the applications for Bheri-1, Jagadulla Khola and Kimathanka Arun to the Energy Ministry with the recommendation that Vidhyut Utpadan be granted licences for the three schemes. It kept back the application for Lower Arun and decided to keep the project in the government basket. 

Director general of the DoED Nabin Raj Singh said the department withheld the application as it had already appointed a consultant to prepare a detailed project report (DPR) and environmental impact assessment (EIA) for the Lower Arun project located in Sankhuwasabha district. 

“We have appointed a joint venture of German-based company Fischer GmbH & Co KG and its Nepali partner SILT Consultant to prepare the DPR and the EIA,” said Singh. “Therefore, we have decided to keep the project in the government basket until we get the reports from the consultant.”   

Meanwhile, the Energy Ministry has said that the government will take the appropriate decision regarding the development of the project after the consultant submits its report. 

“Once we get the DPR and the EIA, we will decide on an appropriate modality to develop the project,” said Dinesh Kumar Ghimire, spokesperson for the Energy Ministry. “We will award the project to a government entity or call for global tenders to select an interested developer.” 

In 2012, the government had awarded the generation licence for the project to Lower Arun Hydroelectric Company, a subsidiary of Brazil’s Brasspower. At that time, the Brazilian company had planned to develop the project with an installed capacity of 400 MW and export more than 50 percent of the energy generated to India. 

It had even signed a memorandum of understanding with Power Trade India (PTI) to export the energy. With electricity prices going down in India, the power purchase agreement did not happen and the Brazilian company lost interest in implementing the project. 

In 2016, the government revoked the licence and decided to keep the project in the government basket. The DoED has planned that the project will have an installed capacity of 679 MW, but the actual capacity will be determined after the DPR is prepared.