The Indian government has approved an investment proposal to build a transmission line in eastern Nepal to evacuate the electricity generated by Arun-3 Hydropower Project being developed by an Indian state-owned company.

In a statement released on Thursday night, the Indian Cabinet said it has approved an investment proposal worth IRs 12.36 billion put forth by SJVN Limited, a central public sector enterprise of India which is also the developer 900MW Arun-3. The approval is expected to pave the way for the construction of 217km-long, 400kV power line within the Nepali territory which will be crucial to transmit the electricity generated from the project to India.

SJVN Arun-3 Power Development Company Limited, the subsidiary of the Indian state-owned enterprise, had signed the project development agreement with Investment Board Nepal for the development of the hydropower project in November 2014.

According to the agreement, the project developer has to build the power line to export electricity to India. The transmission line project, once it comes into operation, can be used by other hydropower projects being developed in the nearby areas provided the power line has excess capacity.

The project developer has initiated the public procurement process to appoint contractors to execute the power line project. The Power Grid Corporation of India, the consultant hired by the SJVN to execute the transmission line, has already called the global tender to select the contractors to build the power line under two packages, according to the project developer.

“The contractors will be evaluated by the April 2019,” said Hari Ram Subedi, resident representative of SJVN in Nepal.

In February 2017, the Indian cabinet had approved the investment proposal worth IRs 57.32 billion to build the project located at Arun River in Sankhuwasabha district. Almost a year after the approval, Prime Minister KP Sharma Oli and Indian Prime Minister Narendra Modi jointly laid the foundation stone for the project during Modi’s Nepal visit. Following the inauguration, the project developer has been carrying out the construction work swiftly, completing around 15 percent of the job so far.

Deploying more than 2400 workers, the SJVN has been constructing a tunnel and powerhouse for the project simultaneously. The project will include two key components: a 70-metre-high dam and an 11.7km-long headrace tunnel to channel the water to the underground powerhouse that contains four generating units of 225 MW each.

The project is also developing an access road, including a bridge leading to the construction site. The project office has said once the construction of the road is complete, more workers will be mobilized to speed up the hydropower project.  

As per the project agreement, the developer has to provide 21.9 percent free electricity generated from the project to Nepal for 25 years, after which the entire project will be handed over to Nepal.