PDA Talks For Arun III Hydel Project Begin

KATHMANDU, 05 NOV 2014 – Project Development Agreement (PDA) negotiation for Arun III hydropower project started in Kathmandu on Tuesday. The talks between Investment Board Nepal (IBN) and India’s Satluj Jal Vidyut Nigam Limited will continue on Wednesday.

IBN CEO Radhesh Pant said Tuesday’s meeting mainly focused on legal aspects. “Legal teams from both the countries participated in the negotiation,” said Pant, adding since there aren’t many issues to be resolved, the negotiation is likely to complete soon.

One of the critical issues to be settled is share allocation to locals. Pant said Sutlaj is positive on allocating shares to the locals. “We will definitely negotiate over the issue. There is a need for making the project bankable while allotting shares to the locals,” said Pant, adding the number of affected people too will be taken into account while taking a decision.

The PDA template for Arun III will basically be similar to that of Upper Karnali Hydro Power Project. IBN and India’s GMR Company recently signed the PDA for Upper Karnali.

As far as the project’s downstream impact is concerned, the two parties are likely to agree on the same conditions set for Upper Karnali, according to IBN. GMR has agreed to conduct a study on downstream impact within six months from PDA signing, and construct a re-regulating dam, if needed.

An IBN team also recently carried out a on-site study of the project based in Sankhuwasavha district.

The IBN had sent the PDA draft to Satluj on October 4. As per the agreement, Nepal will get 21.9 percent free energy, or 197MW. Issues regarding facilities for locals, and the developer’s corporate social responsibility initiatives are yet to be cleared.

The Nepal government and Satluj had entered into a Memorandum of Understanding (MoU) in March 2008. Sources say the much-awaited PDA is likely to happen on the sidelines of the 18th Saarc Summit, amidst the presence of Indian Prime Minister Narendra Modi.

Source: eKantipur