Nepal Awards Construction of 900 MW Upper Karnali Hydropower Project to Satluj Jal Vidyut Nigam Ltd

In a significant development for Nepal’s energy sector, the government has entrusted Satluj Jal Vidyut Nigam Limited (SJVN) with the construction of the long-awaited 900-megawatt Upper Karnali hydropower project. This decision comes in collaboration with the GMR group, which had initially been awarded the construction rights for this major hydroelectric project.

The partnership between GMR and SJVN dates back to 2014 when both companies signed the Project Development Agreement (PDA) for the construction of the Upper Karnali and Arun-III hydropower projects. While Arun-III has seen substantial progress over the past decade, Upper Karnali has been on the backburner until now.

Confirming the new development, Nandalal Sharma, Chairman of SJVN, stated, “SJVN has received permission to take part in the construction of the Upper Karnali Hydropower Project.”

Under the revised arrangement, the Upper Karnali hydropower project will be constructed through a joint investment from SJVN and GMR, with SJVN taking the lead. According to the initial agreement, the Nepal Electricity Authority (NEA) will retain a 27% share, while the remaining 73% will be divided between SJVN and GMR, each holding a 36.5% stake.

The decision to involve SJVN comes after the lack of progress on the 900 MW capacity of the Upper Karnali project, prompting the government to bring in a new partner. The partnership transition is in line with the commitment made by Indian Home Minister Rajnath Singh during the signing ceremony, where he pledged the support of the Indian Government in case both companies failed to fulfill their obligations.

According to the Project Development Agreement, the estimated cost for the construction of the Upper Karnali Hydroelectric Project was 1.16 billion Nepali rupees about a decade ago. The Government of Nepal had also extended the project’s timeframe on three occasions to allow GMR to secure funding for the construction, which ultimately led to the involvement of SJVN.

The move is expected to breathe new life into one of Nepal’s major hydropower initiatives, further contributing to the nation’s energy security and infrastructure development. The collaborative efforts between SJVN and GMR are anticipated to expedite the construction process and bring about positive advancements in the energy landscape of the Himalayan nation.