REC, PFC sign pact to finance 600-megawatt hydropower project in Bhutan

State-owned entities REC Ltd and Power Finance Corporation (PFC) have entered into a pact with Bhutan-based Kholongchhu Hydro Energy Ltd (KHEL) to finance a 600-megawatt hydroelectric project at Trashiyangtse in the neighbouring country.

KHEL is a 50:50 joint venture between SJVN India and Druk Green Power Corporation (Bhutan) set up for developing the 600-MW Kholongchhu hydroelectric project in the eastern Bhutan, REC Ltd said in a statement on Wednesday.

REC Ltd along with PFC has signed memorandum of understanding (MoU) on March 9, 2021, with Kholongchhu Hydro Energy Ltd for financing of 600-MW hydroelectric project at Trashiyangtse, Bhutan, the REC statement said.

“The project is proposed to be funded in a debt-equity ratio of 70:30 and as per the MoU, REC would extend rupee term loan of Rs 2,029 crore. The balance debt shall be extended by PFC (Rs 2,029 crore), NPPF, Bhutan (Rs 200 crore) and Bank of Bhutan (Rs 200 crore),” it said.

REC also said the project is being executed as per an inter-governmental agreement signed between the Government of India and the Royal Government of Bhutan (RGoB) in April 2014, to undertake the implementation of four hydroelectric projects in Bhutan through a JV model to be formed by PSUs of the two governments.

KHEL is the first JV being undertaken between the two governments for implementation of the 4×150 MW Kholongchhu hydroelectric project.

REC and PFC, both under the administrative control of the power ministry, are non-banking financial companies in the power sector.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor