Cabinet Approves Investment for SJVN’s Lower Arun Hydro Electric Project in Nepal

The Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, has sanctioned a significant investment in a hydropower project in Nepal. This development marks a critical step in enhancing India’s collaboration with its neighbors in renewable energy.

Major Investment in Lower Arun Hydroelectric Project

The 669-megawatt Lower Arun hydroelectric project, located downstream of a 900 MW plant on the Arun River in Nepal’s Sankhuwasabha district, has received an investment approval of Rs 5,792 crore. This project, awarded to government-run SJVN Ltd. through international competitive bidding, is expected to produce 2,900 million units of energy annually. Implemented on a build-own-operate-transfer basis, the project enjoys robust support from the Indian government. The initiative reflects India’s commitment to bolstering renewable energy production in the region.

Power Transmission and Future Prospects

The power generated by the Lower Arun project will be transmitted to India through a dedicated line to Sitamarhi, Bihar, facilitating cross-border energy trade. Additionally, SJVN Ltd. is progressing with the development of the 900 MW Upper Karnali hydropower project in Nepal, backed by a Rs 290 crore investment from the Indian Renewable Energy Development Agency Ltd. This project, set to become Nepal’s largest hydropower plant, will connect to the Indian grid via transmission lines developed by GMR Group. These projects underscore India’s strategic focus on renewable energy and regional cooperation.

Conclusion: The Indian government’s investment in the Lower Arun hydroelectric project represents a strategic move to enhance renewable energy infrastructure and foster regional collaboration. By supporting large-scale hydropower projects in Nepal, India aims to secure a stable energy supply while promoting sustainable development. These efforts not only strengthen bilateral relations but also contribute to regional energy security and economic growth. The stock of SJVN Ltd. currently trades at Rs.141.11 per share down by 2% from its previous day’s closing price, the main reason behind this being the weakness in the market as the benchmark index NIFTY 50 is currently trading down by 1.75%. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.