SJVN Inks Pact for Kholongchu Hydro Power Project in Bhutan

Researched by Industrial Info Resources India (Delhi, India)--Subsequent to the signing of an inter-governmental framework agreement between the Government of India and the Royal Government of Bhutan on April 22, Indian state-run hydro power enterprise SJVN Limited (BSE: 533206) (Shimla, Himachal Pradesh) has entered into a memorandum of understanding (MoU) with Bhutan's Druk Green Power Corporation (DGPC) to carry out preconstruction activities for development of the 600-megawatt (MW) Kholongchu hydroelectric project in Bhutan.

The MoU will be valid until the formation of the joint venture company proposed for the implementation of the project, which has been envisaged for development on the Kholongchhu River in the Trashiyangtse district of Bhutan the country.

The MoU was signed by R P Singh, chairman and managing director, SJVN, and Dashu Chhewang Rizin, managing director of DGPC, in the presence of P K Sinha, India's secretary of power, and Bhutan's Economic Affairs Secretary Dashu Sonam Tshering in Thumphu.

"SJVN Limited and DGPC have decided to form the JV company within three months. After finalizing the shareholders' agreement the joint venture will be formally registered," according to a SJVN statement.

India and Bhutan, through mutual cooperation, have commissioned three hydroelectric projects totaling to 1,416 MW, which are currently supplying electricity to India. Three other projects with a total capacity of 2,940 MW are scheduled to be commissioned by 2018. The projects that are under construction include the 1,200-MW Punatsangchu-I project, the 1,020-MW Punatsangchu-II project and 720-MW Mangdehchu project.

With an installed generation capacity of 1,547 MW, SJVN is presently implementing 10 hydroelectric projects in the states of Himachal Pradesh, Uttrakhand and also in Nepal and Bhutan. The company plans to commission 4,952 MW of power capacity during the forthcoming Five Year Plan periods. As a part of its diversification plan, the hydropower company has ventured into the wind power sector and also entered into an agreement with Government of Bihar to set up a 1,320-MW thermal power project in the state.

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