Germany offers soft loans for Uttarakhand hydel projects

After facing opposition over executing projects in public-private partnership, Uttarakhand Jal Vidyut Nigam Limited (UJVNL) has now decided to modernise and renovate its old hydel projects by taking soft loans from Germany and the Centre.

UJVNL, a state government enterprise, would receive a soft loan of 100 million euros from KFW, a German financial institution, for modernising and renovating six hydel projects in the Garhwal region. An additional grant of 3.3 million euros from KFW would be for preparing the detailed project report of these projects.

The soft loan would be at 1.95 percent interest, UJVNL chairman Yogendra Prasad told Business Standard. “In no way, these projects are being given in PPP mode,” Prasad said.

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

In July last year, the government, in a major policy decision, decided to renovate all those hydel projects, which have crossed 35 years under the 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, UJVNL unions and some politicians opposed the move due to which the government put the PPP decision on hold.

Official sources though believe the PPP decision was the best option since the state desperately needs more power. Last year, the government had to suspend the construction of two of its major hydel projects – 480 Mw Pala Maneri and 400 Mw Bharion Ghati — following opposition from environmentalist GD Agrawal, a move which also dampens the government’s bid to generate more power.

UJVNL has also signed an agreement with Lamyar International, a German company, for preparing the DPR and technical feasibilities of the six hydel projects for which KFW is giving 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.