UJVN fails to get Euro 103-mn loan from KfW

A Euro 2-mn grant from KfW has already been received for preparing detailed project reports

The state-run Uttarakhand Jal Vidyut Nigam (UJVN) has suffered a setback when its attempt to get a loan of Euro 103 million from KfW, a German financial institution, failed.

The terms and conditions of the loan had expired in 2010. After that, UJVN made several attempts to hold talks with the Centre to renew it. UJVN had decided to modernise and renovate its old hydel projects by taking soft loans from KfW through Power Finance Corporation (PFC).

A grant of two million euros from KfW has already been received for preparing detailed project reports (DPRs) of these projects. The soft loan was expected at 1.95 per cent interest.

Another key point that became the stumbling block was that KfW could not enter into an agreement with PFC on the issue, said a senior official of UJVN. Earlier, the government, in a major policy decision, had decided to renovate all those hydel projects that have crossed 35 years under the public-partnership mode (PPP). The cabinet cleared nearly 24 hydel projects in this category. The total capacity of all these projects is 500 megawatts (Mw).

However, UJVN unions and some politicians opposed the PPP mode due to which the government put the decision on hold. Official sources though believe the PPP decision was the best option since the state desperately needs more power.

This forced UJVN to look for other options for modernising its old hydel projects.

UJVN had also signed an agreement with Lamyar International, a German company, for preparing the DPRs and technical feasibilities of the six hydel projects for which KFW had agreed to give loan. The six projects were 240-Mw Chibro, 120-Mw Khodri, 51-Mw Dhalipur, 34-Mw Dhakrani, 30-Mw Kulhal and 90-Mw Tiloth.