The project authorities would be exploring the Indian financial market
Hydropower: An investment of around Nu 200B, almost twice the size of country’s economy, would be pumped into the four joint venture (JV) projects combined.
Following an inter governmental agreement signed in April last year, the construction of 570MW Wangchhu, 600MW Kholongchhu, 180MW Bunakha reservoir scheme and 770MW Chamkharchhu- was approved by the government of India.
Considering the financing modalities of the four JV projects, Druk Green Power Corporation’s (DGPC) managing director, Dasho Chhewang Rinzin said that the projects would require a debt financing of about Nu 140B.
All JV projects are financed on a 70:30 debt equity ratio, the equity portion of which is again 50:50 between DGPC and a public sector unit from India.
This means that DGPC and the public sector companies from India would be investing 15 percent each to make the 30 percent equity. The two investors however, will have to resort to debt financing for the remaining 70 percent of the projects’ cost.
However, DGPC’s 15 percent equity would come in as grant from the government of India.
During the signing of financial agreements with Indian banks and Tangsibji Hydro Energy limited on November 1, Dasho Chhewang Rinzin said the project authorities would come to Indian financial market for Nu 140B debt financing.
Satluj Jal Vidyut Nigam Limited (SVNL) is DGPC’s partner for Kholongchu project and Wangchu hydropower project.
The Bunakha reservoir scheme would be undertaken as a joint venture between DGPC and Tehri Hydro Development Corporation limited, India.
The National Hydroelectric Power Corporation of India (NHPC) will partner DGPC in the Chamkharchu project.
Meanwhile the four JV projects combined would add 2,120MW of power to the country’s generation capacity.