UJVN to renew Euro 103 mn loan for modernisation of old hydel projects

The state-run power generation company Uttarakhand Jal Vidyut Nigam (UJVN) has decided to renew a loan of Euro 103 million from KFW, a German financial institution, for modernisation and renovation of six old hydel projects.

The terms and conditions of the loan had expired in 2010, company officials told Business Standard. “Our chairman Subhash Kumar held talks with the Union power secretary P Uma Shanker to renew the loan from KFW,” said UJVN Director (Operation) B C K Mishra.

Mishra also said most of the hurdles in the way of renewing the loan have already been cleared. “We are just waiting for the clearance from the department of economic affairs now,” he said.

UJVN had decided to modernise and renovate its old hydel projects by taking soft loans from KFW through Power Finance Corporation (PFC).

An additional grant of Euro 2 million from KFW has already been received for preparing the detailed project reports (DPRs) of these projects. The soft loan is expected at 1.95 per cent interest.

Similarly, the Rural Electrification Corporation Limited, a public sector unit, has given a loan of Rs 50 crore for modernising Mohamadpur (9.3 Mw) and Pathri (20.4 Mw) hydel projects.

Earlier, the government, in a major policy decision, had decided to renovate all those hydel projects, which have crossed 35 years of age under the public-private partnership (PPP) mode. The Cabinet cleared nearly 24 hydel projects in this category, to be given on a 30 years lease. The total capacity of all these projects is 500 Mw.

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

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 are 240 Mw Chibro, 120 Mw Khodri, 51 Mw Dhalipur, 33.75 Mw Dhakrani, 30 Mw Kulhal and 90 Mw Tiloth.