Location

Arun River, Sankhuwasabha District, Eastern Nepal

Type

Run-of- -river Hydropower Project

Installed Capacity

900 MW (4 × 225 MW units)

Dam Structure

70 meters high concrete gravity dam

Head Race Tunnel (HRT)

11.74 kilometers long

Powerhouse

Underground powerhouse located on left bank of Arun River

Developer

SJVN Arun-III Power Development Company (SAPDC) wholly owned subsidiary of SJVN Limited (India)

Parent Company

SJVN Limited a joint venture of Government of India & Government of Himachal Pradesh

Development Model

Build-Own-Operate-Transfer (BOOT) basis

Operational Tenure Before Handover

25 years (excluding approximately 5 years of construction)

Free Power to Nepal

21.9% of generated electricity will be provided free of cost to Nepal during 25 years of operation

Cost of Construction

Approximately Rs. 144 billion

Ownership Transfer

After 25 years, full ownership will be transferred to Government of Nepal

Electricity Export

Export from Dhalkebar (Nepal) to Muzaffarpur (India) via dedicated transmission lines
Will help strengthen India-Nepal cross-border energy trade

Economic Significance

Largest hydroelectric project in Nepal upon completion
Major boost to Nepal's energy security
Strengthens regional economic & energy integration with India

Strategic Significance

Part of India neighborhood first policy
Counters Chinese influence in Nepal's energy sector
Facilitates clean energy cooperation in Himalayan region

Current Progress (April 2025)

Structural works nearing completion; Electromechanical works officially launched; Transmission line components (Koshi Corridor) inaugurated

Associated Transmission Projects

Koshi Corridor 220 kV Transmission Line (Inaruwa–Basantapur–Baneshwor–Tumlingtar)
Substations at Tumlingtar, Baneshwor & Basantapur

Visit Significance (April 2025)

Visited by Indian Minister for Power & Housing Affairs, Manohar Lal Khattar & Nepal's Minister for Energy, Dipak Khadka
Reviewed progress, resolved bottlenecks & launched electromechanical works

Project Name

Koshi Corridor 220 kV Transmission Line

Location

Eastern Nepal (Koshi Province region)

Components

Transmission line sections: Inaruwa–Basantapur–Baneshwor–Tumlingtar
Three Substations: Tumlingtar, Baneshwor, Basantapur

Purpose

Evacuation of hydropower from Arun River basin projects (like Arun-III, Lower Arun)
Strengthen Nepal’s internal power distribution network
Enable cross-border electricity trade with India

Length of Transmission Line

Approximately 106 kilometers

Voltage Capacity

220 kilovolts (kV)

Funding & Support

Indian financial & technical assistance under India’s development cooperation programs

Significance for Nepal

Major upgrade of local energy infrastructure
Helps reduce power losses & enhances grid reliability

Significance for India

Strategic infrastructure to facilitate energy imports
Reinforces India's role as Nepal’s leading development partner

Additional Features

Part of larger cross-border power grid integration
Supports both domestic consumption & export capacities

Definition

Use of clean & renewable energy projects (like hydropower) as a tool to strengthen diplomatic, economic & strategic ties between nations

India-Nepal Model

India supports hydropower development in Nepal (e.g., Arun-III, Lower Arun, Upper Karnali)
Joint grid connections for energy trade
Development of cross-border energy markets

Diplomatic Tools Used

Concessional financing
Technical collaboration
Infrastructure co-development
Policy & regulatory harmonization initiatives

Strategic Benefits to India

Strengthens goodwill with Nepal
Counters regional competitors (like China)
Secures clean electricity for India's growing energy demands
Promotes regional energy security in South Asia

Benefits to Nepal

Infrastructure modernization
Export revenues from surplus power
Energy self-sufficiency & reduced reliance on fossil fuels

Global Relevance

Clean energy diplomacy is becoming a major soft-power tool globally, aligning with international commitments like Paris Agreement

Recent Developments

Launch of India-Nepal Energy Dialogue mechanisms
Joint projects on transmission line expansions
Nepal’s inclusion into India’s energy markets via open access

PRACTICE QUESTION

Q. Discuss role of clean energy diplomacy in strengthening India-Nepal relations with special reference to Arun-III Hydropower Project & Koshi Corridor transmission initiatives.