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Twenty years ago, the World Bank pulled out of the 402 megawatts hydropower project, which was to be built in east Nepal.  A small informal group, Alliance for Energy campaigned successfully against Arun III’s development, arguing that the risks were huge and would push Nepal further into aid dependency. One positive outcome of World Bank withdrawal was that hydropower started to attract  diverse groups of local, non-traditional investors such as Nepal’s telecom industry.

Bikash Pandey, Innovations Lead for Clean Energy at Winrock International, Washington DC, who was a part of the Alliance for Energy group, says that non-traditional investors have filled the gap left by the cancellation of Arun III. A 456 megawatts (larger than Arun III) project is now being financed entirely by Nepali rupee investment. Right now, there is US$300 million in Nepali money invested in the hydropower sector. When the 456 megawatts project gets commissioned in 18 months, Nepal can expect to see an end to power cuts.