Nepal on Sunday decided to allow India's Satluj Jal Vidyut Nigam (SJVN) Limited to develop a second hydropower project in the country.

At present SJVN is developing a 900-MW Arun -III hydroelectric project, a run-of-river located on the Arun River in Eastern Nepal, scheduled to be completed in 2024.

A meeting of the Investment Board Nepal (IBN) chaired by Prime Minister Pushpa Kamal Dahal “Prachanda” approved the draft project development agreement (PDA) to be signed with India's state-owned SJVN to develop the 669-megawatt (MW) Lower Arun Hydropower project in eastern Nepal, an official statement said.

The development comes days before Prime Minister Prachanda's visit to India starting Wednesday.

The draft needs to be endorsed by the Council of Ministers before it gets implemented.

The previous meeting of the IBN had approved Rs 92.68 billion investment for the development of the project.

“The development of this 669-MW transformative project will prove to be a milestone for the socio-economic development of the country,” according to the statement by the IBN.

The SJVN has formed a local company, Lower Arun Power Development Company, in Nepal.

The Lower Arun project located in the Sankhuwasabha and Bhojpur districts will not have any reservoir or dam and will be a tailrace development of Arun-III, which will mean water re-enters the river for the Lower Arun project.

This is the third project undertaken, all through negotiation windows, on the Arun River after the 900 MW Arun-III and 695 MW Arun-IV hydroelectricity projects.

The three projects will generate nearly 2,300 MW of electricity from the river in Sankhuwasabha district, The Kathmandu Post newspaper reported.

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