The final breakthrough of the 11.8 km-long headrace tunnel of the 900 MW Arun III Hydroelectric Project was achieved on June 5. Prime Minister Pushpa Kamal Dahal initiated the final blast to complete the tunnel in Sankhuwasabha. This project, being constructed by India, is the largest hydroelectric plant in Nepal to date and marks the country's first export-oriented hydroelectric venture. Construction of the $1.4 billion run-of-the-river project on the Arun River commenced in May 2018. The Nepal government awarded the project to SJVN, a government-owned entity of India, through international competitive bidding in March 2008. The Investment Board Nepal and SJVN signed the agreement for developing the Arun III project in November 2014. At the breakthrough event on June 5, Prime Minister Dahal emphasized that this achievement brings Nepal and India closer to their shared goal of providing clean, renewable energy and fostering sustainable regional development. He commended the ongoing efforts and reiterated the government's commitment to ensuring the timely completion of the Arun III project.

Indian ambassador to Nepal Naveen Srivastava recalled in his address that Prime Minister Narendra Modi of India and his Nepali counterpart, Pushpa Kamal Dahal, had agreed to a long-term power trade agreement last year, highlighting the significance of completing the export-oriented 900 MW Arun III as a major milestone in this collaboration. Sushil Sharma, chairman and managing director of SJVN, described the breakthrough of the headrace tunnel as a pivotal achievement for the Arun III project. “The successful completion of the headrace tunnel marks a monumental achievement in our efforts to harness the hydropower potential of the Arun River,” Sharma emphasized.

He further stated that the Arun III project is slated to begin generating electricity next year and has the capacity to produce 3,924 million units annually. SJVN is currently overseeing the execution of three hydroelectric projects totaling 2,200 MW in the Arun River basin, including the 679 MW Lower Arun Hydropower Project. In July 2021, Nepal entered into a $1.3 billion agreement with SJVN to develop the Lower Arun, marking the country's second major project with its southern neighbor after the $1.04 billion 900 MW Arun III.