The State Bank of India (SBI) will be investing a total of Rs 80 billion in the Arun III hydropower project of Nepal, which has 900 megawatts (MW) electricity production capacities.
The SJVN, which has been awarded with the construction of the mega power project of Nepal, has made an informal agreement with the SBI to acquire the investment as loan and soon will make the formal agreement, sources informed agencies.
“The Director Committee Meeting of the bank is due to make the recommendation. They soon will decide over. As of now they have decided over the loan extend and the interest rate over it has been finalized,” the source informed with anonymity.
“The Rs 1.4 trillion over the project will be expended for the construction of the structures and additional Rs 11 bn for the transmission lines,” the source briefed.
With the completion of the project, Nepal will get 21.9 per cent of the total electricity produced in a year i.e., 197 MW electricity with 86 crore unit for free in a year.
Along with this, the Punjab National Bank will lend the loan for the construction of the 268 km long 400 KV transmission line via the Everest Bank which is the joint venture bank of the PNB.
The source also informed that the Rs 4.06 bn for the project will be lent from the Nepali banks as Bridge loan without further details over the banks.
“The Nepal Investment Board will soon issue the license for the construction of the project. It will not take more than a month meaning the license will be granted by mid-June as of now,” another source in the Nepal Investment Board told agencies.
The Indian Government on the other hand has made the approval of Rs 92 bn that is to be invested by SJVN. With this the SJVN will invest Rs 25 bn of its own for the mega-project and will take the charge for 25 years excluding the time for the construction of infra.
The further division of the project has been made with the granting of two separate packages to two Indian companies. Under the Package One, the Jay Prakash Associates (JP) Limited of India has been awarded with the construction of the Dam and diversion with an estimated cost of about Rs 18 bn rupees.
The Second Package of constructing the power station is awarded to Patel Engineering Company Ltd. with the contract amounting Rs 18 bn which includes the 8 km long tunnel in addition.
The mega project is targeted to be completed by 2022’s September.