Lower Arun Hydroelectric Project (LAHEP) 669 MW, lies in the Sankhuwasabha and Bhojpur Districts of Nepal. SJVN was selected through international competitive bidding for development of Lower Arun HEP. MoU was signed between SJVN Ltd. & Investment Board of Nepal (IBN) at Kathmandu, Nepal on 11 July, 2021. Project has been allocated to SJVN on Build Own Operate Transfer (BOOT) basis. The project is envisaged as a downstream extension of 900 MW Arun-3 Hydroelectric Project utilizing 344.68 cumecs of design discharge available at tail race outfall of Arun-3 HEP. The water coming out after generation from Arun-3 power station will be tapped from Arun-3 Tail Race pond/Lower Arun Intake pond into the Intake of Lower Arun HEP. Both the Projects i.e. Arun-3 HEP and Lower Arun HEP after completion are to be operated in Tandem Operation System (TOS) like SJVN's 1500 MW Nathpa Jhakri HPS & 412 MW Rampur HPS in Himachal Pradesh, India.

LAHEP envisages the construction of 17.4 km long, 10.5 m dia. horse-shoe shape Head Race tunnel, 33.84 m dia. 134.75 m deep restricted orifice open to sky surge shaft, two steel-lined pressure shafts bifurcating into four branch, a butterfly Valve Chamber 91 m (L) x 12 m (W) x 21 m (H), a surface powerhouse, measuring 150 m (L) x 24 m (W) x 53 m (H) along with a transformer bay. The rated capacity of each turbine generator is 167.25 MW. The powerhouse has a gross head of 229.96 m and a design head of 212.68 m. The Project will generate 2901 Million Units of electricity annually. Detailed Project Report of Lower Arun HEP stands appraised/ approved by GoN and GoI. For execution of Lower Arun HEP a Company named SJVN Lower Arun Power Development Company Pvt. Ltd. (SLPDC) has been incorporated & registered on 26.05.2023. Further, Minutes of PIB Meeting regarding Investment Approval of Lower Arun HEP by GoI received on dt. 30.05.2023. Project Development Agreement has been signed between SLPDC and IBN, GoN on 01.06.2023 at New Delhi, India. Supplementary Environment Impact Assessment (SEIA) has been approved by GoN on 31.10.2023 and the case for Forest Clearance/ Approval is under process.