NHPC has signed a revised agreement with entities of the Union Territory of Jammu & Kashmir, whereby its stake in the joint venture formed for the 850-mw Ratle hydropower project, will not fall below 51 per cent.
The original agreement envisaged that NHPC would eventually sell its equity to JKSPDCL.
NHPC, on January 3, 2021, signed a supplementary MoU with Jammu & Kashmir State Power Development Corporation Ltd (JKSPDCL) and Power Development Department, Government of UT of Jammu & Kashmir, for implementation of the 850-mw Ratle hydropower project in Jammu & Kashmir UT, through a proposed joint venture.
In the supplementary MoU, the clause of the original MoU dated February 3, 2019, regarding purchase of NHPCs equity by JKSPDCL have been deleted.
Accordingly, the share of NHPC in the joint venture company shall not be brought below 51 per cent and the share of JKSPDCL shall not be brought below 49 per cent.
The Original Agreement
According to the clauses in the original MoU, the equity participation of NHPC and JKSPDC were to be in the ratio 51:49, which still holds true. However, the original MoU envisaged that the equity of NHPC shall be purchased at book value by JKSPDC from the end of the fifth year after the date of commissioning over a period of 15 years, through equal instalments.
History
Though NHPC signed an MoU with JKSPDCL in 2019 to implement the Ratle hydropower project, there was fresh thinking that the project be implemented by NHPC alone. However, in late November 2020, the J&K Administrative Council approved the proposal to develop the project in joint venture mode with equity partners NHPC and JKSPDCL.
The 850-mw Ratle hydropower project is a run-of-river scheme over River Chenab in Kishtwar district of UT of J&K. The project is covered under the Indus Water Treaty 1960 between India and Pakistan. The project with an installed capacity of 850 mw (4×205 mw + 1×30 mw) shall generate 3,137 million kwh in a 90 per cent dependable year. The expected completion cost of the project is around Rs.5,300 crore. The project will have a levelized tariff of Rs. 3.92 per kwh.
The project was initially awarded under the tariff-based competitive bidding route to GVK Group, in 2010. However, GVK abandoned the project in 2014 owing to issues relating to tariffs. GVK Group has started physical construction work on the project.
The foundation stone for the project was laid by then Prime Minister Dr Manmohan Singh, in June 2013 and it was then scheduled for completion in 2020.
Similar JVs
NHPC, it may be mentioned, already has a joint venture for other hydropower projects in UT of J&K. Named Chenab Valley Power Projects Pvt Ltd, it has equity participation from NHPC (49 per cent), JKSPDCL (49 per cent) and PTC India (2 per cent). CVPPPL is currently developing the 1,000-mw Pakal Dul, the 624-mw Kiru and the 540-mw Kwar hydropower projects in UT of Jammu & Kashmir. This joint venture will also be developing the 540-mw Dulhasti (Stage 2) project on which survey and investigation works are currently going on.
Featured photograph for illustration only
