Arun Kabeli on final phase to produce 25 MW electricity; production expected to start within a month

Arun Kabeli Power Limited has finished all the work related to 25 MW Kabeli B 1 project and is preparing to produce electricity soon. According to a press notice sent by Arun Kabeli, the project will be producing electricity from the end of this month.

The project is constructed on Kabeli River running on the boundaries of Pachthar and Taplejung. Arun Kabeli is the subsidiary of Arun Valley Hydropower Limited. When the Arun Kabeli starts to generate 25 MW electricity, it will provide huge assistance in meeting the electricity demand. As per the press notice, it will be selling electricity to Nepal Electricity Authority (NEA) at Rs 4.80 in summer and Rs. 8.40 in winter.

API Power Company had Rs 4 crore worth investment in Arun Kabeli, so when the operation starts the shareholder of API Power Company will also benefit.

However even after the production starts, the project will be facing the problem of transmission line. The 90 km long transmission line being constructed in Kabeli Corridor by Government hasn’t finished yet and the consistent postponement has affected the Arun Kabeli project too. The mentioned transmission line should have been completed by Baisakh 2074, but is still under construction.

Similarly, the project also has investment from 6 commercial banks including Nepal Investment Bank. The shares of Arun Kabeli were listed in NEPSE from Baisakh 2074 and is trading in the market.

The project has forecasted a net income of Rs. 76 crore once the production starts and in the fifth year the amount is expected to reach Rs. 87 crore. Similarly, since the project still has a lot of avenues to invest, bonus shares are likely to be distributed than cash dividend.