New Delhi: NHPC Limited said on Wednesday that a Promoters' Agreement has been signed for its Ratle Hydro-electric Project on April 13. The agreement was signed between NHPC Limited, Jammu and Kashmir State Power Development Corporation Limited (JKSPDCL) and the government of UT of Jammu & Kashmir, the power sector PSU said in a regulatory filing to the stock exchanges on Wednesday.
In February 2019, the three parties had signed an MoU for the development of the 850 MW Ratle hydroelectric project. Further, a supplementary MoU was also signed on January 3 for the project.
As per the agreement signed on April 13, the parties have decided and agreed to jointly establish a joint venture company under the name and style of 'Ratle Hydroelectric Power Corporation Limited' upon the terms and conditions contained in the Promoters' Agreement for the implementation of Ratle hydroelectric project with an installed capacity of 850 MW in the Chenab River Basin and any other project which may be entrusted to the company in the Union Territory of Jammu & Kashmir. The joint venture company will be formed between NHPC Limited and JKSPDCL with a 51:40 percent shareholding ratio.
On January 20, the Union Cabinet had given its approval for the investment of Rs 5,281.94 crore for the said project. While NHPC has to invest Rs 808.14 crore generated from the power PSU's internal resources. The project is scheduled to be commissioned within 60 months. "The Government of India is also supporting the Union Territory of Jammu and Kashmir by providing a grant of Rs 776.44 crore for an equity contribution of JKSPDC in the JVC," a statement from the Ministry of Power had said earlier.
In order to make the project financially viable, the government of the UT of Jammu and Kashmir will extend the exemption from levy of water usage charges for 10 years after the commissioning of the project, reimbursement of the state's share of GST (SGST) and waiver of free power to the UT in a decremental manner. That is, the free power to the Union Territory would be 1 percent in the first year after the commissioning of the project and rise at the rate of 1 percent per year to 12 percent in the 12th year.
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