India, Bhutan ink power project pact

In a major boost to the 600-Mw Kholongchu hydroelectric project in Bhutan, being developed by Shimla-based power public sector unit (PSU) SJVN Ltd, a shareholders agreement was signed in Bhutan, officials said here on Wednesday. The pact was signed between R P Singh, chairman and managing director, SJVN, and Dasho Chhewang Rinzin, managing director of Druk Green Power Corporation.

This is the first hydroelectric project being developed by a joint venture between PSUs of both the countries, to be implemented in Bhutan, under the BOOT (build, own, operate and transfer) model.

In April, the two parties signed an agreement to execute the project.

Singh said it is a run-of- the-river scheme located on the Kholongchu river in Bhutan.  

On completion, it will generate 2,568 million units of energy.  The project is estimated to cost Rs 3,868.87 crore, to be shared equally by the two partners, he added.

It will provide 12 per cent of the saleable energy to Bhutan free of cost as royalty energy during the first 12 years of commercial operations.

The project will be financed under a debt equity ratio of 70:30. For the 70 per cent saleable energy generated, long-term power purchase agreements will be entered into with the beneficiaries and the balance power will be sold through market mechanism.