Nepal Investment Board has said it has signed a pact with India's state-owned SJVN Ltd to develop the 679-megawatt (MW) Lower Arun Hydro Electric Project in eastern Nepal.

       In a statement on Sunday, the National Investment Board of the Himalayan Nation announced that the pact was signed with India's state-owned Satluj Jal Vidyut Nigam (SJVN) which is the second mega project undertaken by Southern neighbour.

       The memorandum of understanding MoU was signed by SJVNL Chairman and Managing Director Nand Lal Sharma and IBN Chief Executive Officer Sushil Bhatta.

       Second, after the Arun-3 hydropower project, the Lower Arun Hydel project is expected to cost around 1.3 billion dollars, the single biggest foreign investment project, as per 2017 cost estimates.

       Prior to the latest project, India is building 900 MW Arun-3 project at an estimated cost of 1.04 billion dollars in the Arun river which is located in Sankhuwasabha district. Lately signed Lower Arun Hydel Project lies in Bhojpur district of the Himalayan Nation.

       As per the statement, the developer should complete the detailed project study of the project and submit the report for approval at the board within two years from the agreement.

       "The project will be built under the build, own, operate and transfer (BOOT) model," the statement further stated.

       The project will not have any reservoir or dam and will be a tailrace development of Arun-3 hydro project, which will mean water re-enters the river for the Lower Arun project.

       In 2018, Prime Minister KP Sharma Oli and Indian Prime Minister Narendra Modi jointly laid the foundation stone for the Arun-3 Hydropower Project, remotely from Kathmandu.

       SJVN's current installed capacity stands at 2,016 MW and it aims to be a 25,000 MW entity by 2040.

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