The construction of the 600-megawatt Kholongchhu Hydropower Project is expected to resume after three or four months. The Druk Green Power Corporation Limited will be carrying out the works as the corporation is now the 100 per cent shareholder of the company. The Kholongchhu project started as a Joint-Venture but the model was dropped last year as the project was not progressing well.
Initially, the project’s cost was estimated at about Nu 35 bn. However, according to the DGPC, the estimated budget has almost doubled due to cost escalation.
The corporation is approaching the Power Finance Corporation and the Rural Electrification Corporation of India for debt financing.
“We need about Nu 60 bn to get the project done. From there we need about Nu 45 bn as a loan and Nu 15 bn as our own equity injection. The most important thing will be to reach financial closure for debt financing, which will be Nu 45 bn. We have started to discuss with some banks in India, and the Government of India, as well as the government of Bhutan, is fully supporting us in trying to arrange this financing,” said Dasho Chhewang Rinzin, the Managing Director of Druk Green Power Corporation.
He added that the project is expected to be completed within five or six years after the work starts.
“I think having taken over the full decision-making process, I think it will definitely help us to benefit the people as well as to ensure that the project is completed on time,” said Dasho Chhewang Rinzin.
The project started as a joint venture between SJVN of India and DGPC in 2015.
During the joint venture model, only about seven per cent of the works including the construction of an approach road to the project site, bridges, power substations, site offices and transit camps, and distribution lines cost over Nu 4.5 bn.
Kinzang Lhadon
Edited by Tshering Zam
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