Lower Arun Hydropower Project Boosts India-Nepal Energy Cooperation

Context

The Lower Arun Hydropower Project in Nepal highlights deepening India-Nepal energy cooperation, with Indian firms playing a key role in cross-border hydropower development.

Q1. What are the key features & technical specifications of Lower Arun Hydropower Project?

1. It is a 679 MW run-of-the-river project.
2. Located on the Arun River in eastern Nepal (Sankhuwasabha & Bhojpur districts).
3. Designed to generate around 2970 million units of electricity annually.
4. It is a tailrace project, utilising water discharged from upstream projects.
5. Does not involve a large reservoir or storage dam, reducing displacement & environmental impact.

Q2. What is the BOOT (Build, Own, Operate, Transfer) model?

1. Under the BOOT model, a developer:
   1. Builds the project
   2. Owns and operates it for a fixed period
   3. Eventually transfers ownership to the host country
2. In this project:
   1. Developed by SJVN Limited in partnership with Nepal
   2. Ensures investment recovery and operational efficiency before transfer
3. Promotes foreign investment and infrastructure development in host countries

Q3. How is the Lower Arun project linked with the Arun-3 Hydropower Project?

1. The Lower Arun project is a downstream (tailrace) extension of Arun-3 Hydropower Project.
2. Water released from Arun-3 is reused for additional power generation.
3. This improves overall energy efficiency of the river system.
4. Ensures optimal utilisation of water resources without building new dams.

Q4. What are the key features of the Arun-3 Hydropower Project?

1. Capacity: 900 MW, making it one of Nepal’s largest projects
2. Built on the Arun River
3. Includes a 70 m high concrete gravity dam
4. Expected generation: ~4018 million units annually
5. Developed by SJVN Arun-III Power Development Company (subsidiary of SJVN)
6. Operated for 25 years before transfer to Nepal

Q5. What are economic & environmental advantages?

1. Economic Advantages: Lower construction and rehabilitation costs with faster project completion timelines  and sustainable long-term energy generation.
2. Environmental Advantages: Minimal submergence and displacement with reduced ecological disruption compared to large dams and maintains natural river flow patterns to a large extent.

Conclusion

The Lower Arun project reflects a shift towards efficient, sustainable hydropower development, strengthening regional energy integration and India-Nepal cooperation while balancing ecological concerns.