Arun III is a hydro-electric project at the Arun River in Sankhuwasabha District of Eastern Nepal. In this project, 900 megawatts of electricity is expected to be produced.
The power project is to be developed by Sutlej Jala Vidhyut Nigam (SJVN), an Indian state-run utility which bagged the project through International Competitive Bidding. An MoU was signed between Government of Nepal and SJVN Limited for the project in March, 2008 for execution on Build Own Operate and Transfer (BOOT) basis for a period of 30 years including five years of construction period. The Project Development Agreement (PDA) provides 21.9% free power to Nepal for the entire concession period of 25 years. Employment generation of around 3000 persons is envisaged in construction of the project from both India and Nepal.
This is the largest hydroelectric project undertaken by the India government in Nepal.
India will provide a total of $ 1.5 billion for the project.
The project will provide surplus power to India strengthening power availability in the country and will also strengthening economic linkages with Nepal. The power from the project shall be exported from Dhalkebar in Nepal to Muzaffarpur in India.