KATHMANDU, Feb 6: The financial closure of Arun III hydropower project was inked in the capital on Thursday.

A memorandum of understanding (MoU) was signed to this effect today. The Everest Bank and NABIL Bank and five other Indian banks have pledged to invest Rs 100 billion in the project to be developed by Sutlej Electricity Corporation of India.

With the financial closure, the project is expected to gain momentum. Indian company Sutlej has established its subsidiary SJVN for the development of Arun III. So far, the project of 900 megawatts has achieved 25 percent of its physical progress and is expected to complete the end of 2079 BS. As per the information shared by SJVN's Chief Executive Officer Arun Dhimal, Nepali banks would make Rs 15.36 billion in investment.

The formal agreement on the investment was made following the approval from Nepal Rastra Bank (NRB) and the Investment Board (IB) of Nepal. The IB on Wednesday had given permission for the company to sign the MoU.

Likewise, State Bank of India, Punjab National Bank, Union Bank of India, Canara Bank and Exim Bank of India have agreed to invest nearly Rs 86 billion for the project development. The SJVN has made Rs 25 billion in equity investment for the ongoing construction works.

The total investment of the project is estimated to cross Rs 115 billion, including Rs 11 billion for the development of the transmission line. During the program organized to sign the MoU, the high-ranking officials of the banks from Nepal and India were present.

 
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