Nepal has launched construction on the 900MW Arun-3 hydropower project, to be built with an investment of around $1.04bn, along the Arun River in the Sankhuwasabha district.

Nepal has launched construction on the 900MW Arun-3 hydropower project, to be built with an investment of around $1.04bn, along the Arun River in the Sankhuwasabha district.

The Arun-3 hydropower project, which is being executed by SJVN Arun-3 Power Development (SAPDC), is collaboration between Nepal and the neighboring India.

The new hydropower project represents the single biggest foreign investment project in the Himalayan country, reported Reuters.

Anticipated to be commissioned in the next five years, the Arun-3 power generating station is likely to be the largest hydropower project in Nepal. It will comprise a 70m tall concrete gravity dam while an underground cavern will be built to serve as the project’s powerhouse.

Reuters, citing project officials, reported that the financing talks are going on with the State Bank of India and are in the final stages for an investment of around INR36bn ($535m) for the project.

SJVN is expected to fill up the rest of the investment needed to complete the Arun-3 hydropower project. It was formed as a project company in Nepal by India-based Satluj Jal Vidyut Nigam (SJVN), which is a joint venture created by the Indian federal government with the Himachal Pradesh state government.

Recently, SJVN had given an INR5.36bn ($80m) worth contract to India’s state-owned power equipment manufacturer BHEL for delivering the electro-mechanical package for the project.

Under the contract terms, BHEL will hold the responsibility to provide the design, engineering, manufacturing, supply, installation and commissioning of the electro-mechanical equipment for the Arun 3 power project.

As part of the contract, BHEL will deliver four Vertical Francis Turbines and Generator sets, each having a rated capacity of 225MW.

While the company’s Power Sector Northern Region will take care of the erection and commissioning of the equipment, its transmission business division will execute the 400 KV GIS of the Arun-3 hydropower project.