This article delves deep into how Arun-3's cancelation by WB in the 90s was bad for Nepal. It definitely gives an alternate view for the need of Arun-3 and the financial impact it could have.
However it does undercut the environmental impacts. Back then "group of Western NGOs claimed that the proposed road for the Arun III project would endanger the Milke Danda area, which is a proposed national park, along with the Hurure-Chilchia cloud forest. They also claimed that the construction of the dam would destroy fisheries, and 21 plant, 42 mammal, butterfly, reptile, bird, and fish species, including the migratory Copper Mahseer among other endangered species, would be at risk." He undercuts this huge negative impact and says US $ 18.6m were in place to mitigate the negative impacts on the environment of the Arun III project. Personally, I am not sure money can replace the negative impacts, but he does make a compelling case for the project (financially).