India and Nepal are holding negotiations to sign a second Project Development Agreement (PDA) to generate hydorelectric power in the Himalayan nation endowed with rich water resources. The negotiations for the 900 MW Arun-III project between Investment Board Nepal (IBN) and Satluj Jal Vidyut Nigam Ltd, India, which began here yesterday, continued today, Indian Embassy sources said, adding, they are set to continue tomorrow as well.
The format of the PDA will be same as that of 900 MW Upper Karnali project being developed by GMR Consortium of India.
GMR had signed an agreement with the Nepalese authorities in September for the 150 billion mega project.
Under the PDA signed between GMR and IBN, Nepal will get 22 per cent of the energy generated free from the project and 27 per cent free equity share in the project.
The same provisions may apply when Satluj signs a PDA with Nepal.
The signing of the PDA between IBN and GMR was a milestone in hydropower development in Nepal as the agreement paved way for the largest foreign direct investment.
Once the negotiations are over the two countries will sign the PDA for developing the Arun III project in the near future, according to officials. However, the date is yet to be finalized.
The two countries have also signed Power Trading Agreement last month (PTA) that would allow exchange of power between them.