Cabinet approves investment in Pakal Dul Hydroelectric Project

Approves equity infusion beyond Rs 500 crore by NHPC and formation of Chenab Valley Power Projects (CVPPL)

The Union Cabinet approved the investment for construction of the Pakal Dul Hydroelectric Project (4 x 250 Megawatt (MW) at an estimated cost of Rs 8112.12 crore with a debt equity ratio of 70:30

The project cost includes Interest During Construction (IDC) and Financing Charges (FC) of Rs 500.76 crore at March 2013 price level.

The approval also includes subordinate debt of Rs 2500 crore on the conditions and waivers of the Government of Jammu and Kashmir in a scheduled completion period of 66 months.

The Cabinet has approved equity infusion upto Rs 1605 crore by NHPC in Chenab Valley Power Projects (CVPPL) for construction of the Pakal Dul (1000 MW) and for initial investment in Kiru (660 MW) and Kwar (560 MW) hydro electric projects.

Ex-post facto approval has been granted for formation and incorporation of CVPPL, a Joint Venture between NHPC (49%), Jammu and Kashmir State Development Corporation (JKSPDC) (49%) and PTC (2%). The Joint Venture partners will arrange equity by their internal resources.

The Government of Jammu and Kashmir has sanctioned exemption from Work Contract Tax (WCT)/entry tax and waiver of free power and water user charges for a period of ten years from the completion of the project.

The Government of Jammu and Kashmir shall purchase 49% of power from the project. The remaining power will be allocated to the constituent States in the Northern Region excluding Himachal Pradesh (which has refused to purchase power due to less requirement) with the guidelines for allocation of power from Central Hydro Generating Stations.

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