Paper short abstract:

The Nepalese Arun-3 hydropower project was recently resumed by the Indian state-owned SJVN. As the project was initially developed by the World Bank in the 1990s and later cancelled, it is a telling example of the fundamental shifts in transnational infrastructure development.

Paper long abstract:

In 2008, the Nepalese government signed a memorandum of understanding with the Indian state-owned SJVN Ltd. on the construction of the Arun-3 hydropower project. They agreed on a Build-Own-Operate-Transfer structure allocating 80 per cent of the energy generated to the foreign investor for 30 years. Subsequently, the most controversial development project in the history of Nepal was resumed. Initially, construction had started in 1990, when the dam was to be financed mainly through a World Bank loan. But after an alliance of activists started a campaign against the project and filed a complaint to the Inspection Panel of the World Bank (the only one to date that proved successful), the international financial institution decided to withdraw from the project in 1995.

SJVN is the first Central Public Sector Undertaking to bag a dam project outside India on open competition basis. Currently, the corporation is surveying several dam sites in Bhutan, while other Indian companies have started developing projects in Nepal as well and Chinese investors show interest in Nepal's strategic water resources, too. And while people in the Arun valley predominantly welcome the renewed interest in the dam, a substantial number of activists, hydropower experts, policy advisors and intellectuals in Kathmandu are anxious about the growing Indian influence and fear a gigantic sell-out of Nepal's energy options.

On that basis, my paper will investigate the fundamental shifts in transnational infrastructure development from a "Western" donor agency-driven state-centred model to a new private-public-partnership regime involving a whole set of "emerging" actors.