Nepal Opens Hydropower Sector: How Indian Companies Are Gaining Ground

A meeting of the IBN, chaired by Nepal’s Prime Minister Sushila Karki on Wednesday, has paved the way for a company promoted by SJVN Limited of India to obtain a generation licence for the development of the 669MW Lower Arun Hydropower Project.

According to a statement issued by the Prime Minister’s Secretariat, the IBN’s Chief Executive Officer has been granted the authority to issue the generation licence to SJVN Lower Arun Power Development Company, a subsidiary promoted by SJVN Limited.

The Indian company was granted the survey licence in 2021 and subsequently established a domestic company to carry out the survey work. SJVN Limited is also involved in developing the 900 MW Arun–3 Hydropower Project on the same river, which is currently under construction.

The IBN meeting also decided to submit a draft of the Direct Agreement to be signed with SJVN Limited and its lenders for the Arun–3 Hydropower Project, to safeguard foreign investments and ensure project financing.

Such a direct agreement will grant lenders access to project documents, in line with global best practices for large-scale infrastructure financing. Typically, these agreements involve the host government, the project developer, and the lenders in a tripartite arrangement.

The meeting further decided to extend the survey licence period of the 750 MW West Seti reservoir-based hydropower project. NHPC Limited, an Indian state-owned company, was granted the survey licence to develop the project in 2022.

Earlier, China Three Gorges Corporation had been awarded the licence but declined to proceed, citing market guarantee risks. The Indian company then stepped in to pursue the project.

NHPC Limited was granted the survey licences for both the West Seti project and the 450 MW Seti River–6 (SR–6) project in 2022.

--IANS

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- IANS