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Mizoram hydel project set to secure VGF from Centre

Vrishti Beniwal & Mansi Taneja  |  New Delhi 

A hydroelectric power generation project in Mizoram is set to secure viability gap funding (VGF) from the Centre. This would be the first such instance in the country. The funding for the power plant is likely to be approved at a meeting of the Public Private Partnership Appraisal Committee (PPPAC) on Thursday.

Currently, Mizoram does not have any installed capacity in the hydropower segment. Three new hydropower plants, with a capacity of 1,526 Mw, have been planned in the state, along with the revival of the 60-Mw Turial hydro electric project.

Until now, no hydroelectric power generation project had qualified for VGF under public private partnership (PPP). The finance ministry had earlier expressed reservations on the issue, saying the VGF for a generation project could not easily be determined. Turial (60 Mw) and Tuivai (210 Mw) hydroelectric power generation projects were slated to secure VGF earlier too. However, the proposals did not materialise.

PPPAC, headed by the finance secretary, is an inter-ministerial group that clears proposals for government funding required to make a project viable for private developers.

Since the projects involve private and public investments, they fall under the public-private partnership category.

The proposed guidelines of the ministry of finance for defining infrastructure are likely to keep power generation projects outside the scope of VGF and other incentives available for the sector.

Last year, the Haryana government had signed an agreement with Jhajjar KT Transco Private Limited for the execution of the Jhajjar Power Transmission Project under the public-private partnership mode. This was the first transmission project in the country to secure VGF support from the Union government. Two 400-Kv sub-stations at Kabulpur (Rohtak) and Dipalpur (Sonepat), along with associated lines, would be set up under the agreement.

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First Published: Thu, May 12 2011. 01:15 IST