India’s state-owned hydropower utility Satluj Jal Vidyut Nigam (SJVN) has secured regulatory approval to commence the development of a second hydropower project in Nepal.

Currently, SJVN is developing a 900MW Arun-3 hydroelectric project, a run-of-river located on the Arun River in eastern Nepal, which is scheduled to be completed in 2024.

A meeting of the Investment Board Nepal (IBN), chaired by Nepal’s Prime Minister Pushpa Kamal Dahal Prachanda, has approved the draft project development agreement (PDA).

The implementation of the draft requires approval from Nepal’s Council of Ministers.

IBN and SJVN will sign the PDA to develop the 669MW hydropower project, dubbed Lower Arun Hydro Project, on the Arun River in eastern Nepal.

The announcement comes days before Nepal’s Prime Minister Prachanda’s planned visit to India starting on 31 May 2023.

The previous meeting of the IBN had approved INR92.68bn ($1.12bn) investment for the development of the project.

IBN, in a statement, said: “It is expected that the development of this transformative project of 669MW capacity will contribute significantly to the economic and social development of the country in the context of exporting all the energy of its production and completing the construction on time.”

According to The Print report, India and Nepal share more than 20 transmission lines, ranging from 11kV to 132kV capacities, for power exchange between the two countries.

SJVN is a joint venture between India’s central government and the state of Himachal Pradesh, and the 900 MW Arun-3 Hydro Electric Project is being built by its subsidiary.

Furthermore, the Indian utility will also develop the 490MW Arun-4 hydroelectric project in Nepal, for which an MoU was signed in May last year, said the publication.