After the completion of Piluwakhola Hydropower Project in 2001, Arun Valley Hydropower Development Company Limited started feasibility study of Ridi Hydropower project (2400 kW) in Gulmi district and established a company named Ridi Hydropower Development Company Limited to develop the project. After that Arun Valley Hydropower Development Company Limited started feasibility study of Kabeli B1 project on Kabeli River. It is located in between Panchthar and Taplejung district of Mechi Zone in Eastern Development Region of Nepal. To develop this project, Arun Valley Hydropower Development Company Limited established one company named Arun Kabeli Power Limited on 7th January, 2011 as a subsidiary company.