Mumbai: The country’s largest private power utility Tata Power Company has begun construction of the 114 MW Dagachhu hydel power project in Bhutan and expects to commission the first unit in 2013.
Tata Power will build and operate the run-of-the-river project in partnership with the Bhutanese government. While Tata Power holds 26 per cent in the project, the remaining 74 per cent is with the Bhutanese government-owned agencies.
“There are two units of 57 mw each at the Dagachhu project. The first unit will be commissioned in 2013 and it will take about four years for the whole project to be completed,” said Tata Power executive director for strategy and business development Banmali Agrawala.
The $201.5 million project has achieved financial closure through loans secured from Asian Development Bank, Austrian export credit agency OeKB, and Bhutan’s Druk Green Power Corp., the rest being equity participation.
A part of the capital has been used to award contracts for civil work and equipment among other things.
“Major clearances, including environmental approvals, are in place. Contracts for civil work and equipments are in place as well. The design of the entire plant and all the soft part is over and work on the ground will start now,” Agrawala said.
Tata Power and the Bhutanese government have signed a long-term power purchase agreement with Tata Power Trading Company for evacuation of power into India.
After fulfilling the local electricity needs in Bhutan, which is very minimal, all the power would be evacuated to India, Agrawala said, adding Bhutan Power Transmission has agreed to provide transmission access to the Bhutanese border.
The Dagachhu project marks Tata Power’s entry into Bhutan, which has a huge potential for hydel power generation. The utility has also make a mark into the Nepalese hydel power sector through an exclusive joint venture it has signed with Norway’s SN Power recently.
“There clearly is a lot of potential for hydel power in Bhutan. We are definitely open to setting up more plants in Bhutan, but it depends on the pace at which the government there would want the private sector to come in,” Agrawala said.
The company is increasing its thrust on renewable energy and will invest accordingly from the Rs23,600 crore capex announced for the next three years to increase generation capacity. It has over 10,000 MW plants under various stages of construction and implementation.