REC signs MoU for financing 600 MW Hydro Electric Project in Bhutan

REC Limited, Navratna company under the Ministry of Power, along with Power Finance Corporation Limited has signed Memorandum of Understanding (MoU) on 9th March 2021 with Kholongchhu Hydro Energy Ltd. (KHEL) for financing of 600 MW Hydro Electric Project at TrashiYangtse, Bhutan.

KHEL is a JV company of SJVN (India) and Druk Green Power corporation Limited (Bhutan) set up with 50:50 shareholding pattern for the development of 600 MW Kholongchhu Hydro Electric Project in Eastern Bhutan. The MoU was signed in the presence of Sanjay Malhotra, CMD - REC, Sh. RS Dhillon CMD - PFC, NL Sharma, CMD - SJVNL and Yeshi Wangdi Chairman KHEL.

From REC Limited, SK Gupta, Director (Technical), Ajoy Choudhury, Director (Finance) and TSC Bosh, Executive Director were also present along with other senior officers who joined virtually.

The project is being executed as per an inter-governmental (IG) agreement signed between the Govt. of India and the Royal Govt. of Bhutan (RGoB) in April 2014 to undertake implementation of four hydroelectric projects in Bhutan through a Joint Venture (JV) model to be formed by PSUs of the two governments. Kholongchhu Hydro Energy Limited (KHEL) is, the first Joint Venture Company being undertaken between the two governments for implementation of 4x150 MW Kholongchhu Hydro Electric Project.

KHEL has signed a Concession Agreement with The Royal Govt. of Bhutan dated 29.06.2020 for a concession period of 30 years. The project is proposed to be funded in debt-equity ratio of 70:30 and as per the MoU, REC would be extending Rupee Term Loan of Rs. 2029 Crore. The balance debt shall be extended by PFC (Rs. 2029 Crore), NPPF, Bhutan (Rs. 200 Crore) and Bank of Bhutan (Rs. 200 Crore).