REC, PFC to finance 600 MW Hydro Electric Project in Bhutan

New Delhi: REC Limited, along with PFC, has signed a memorandum of understanding (MoU) with Kholongchhu Hydro Energy Limited (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) with 50:50 shareholding pattern for the development of a 600 MW Kholongchhu Hydro Electric Project in Eastern Bhutan. The MoU has been signed in the presence of REC Limited's CMD Sanjay Malhotra, PFC's CMD RS Dhillon, SJVN Limited's CMD NL Sharma and KHEL's Chairman Yeshi Wangdi. Other senior officials were also present on the occasion. 

The project is being executed as per an inter-governmental (IG) agreement signed between the government of India and the royal government of Bhutan (RGoB) in April 2014 to undertake the 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 (JV) company being formed by the two governments for the implementation of the 4×150 MW Kholongchhu Hydro Electric Project.

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KHEL has signed a Concession Agreement with the royal government of Bhutan on June 29, 2020, for a concession period of 30 years. The project is proposed to be funded in a debt-equity ratio of 70:30. And as per the MoU, REC would be extending Rupee Term Loan of Rs 2,029 crore. The balance debt shall be extended by PFC (Rs 2,029 crore), NPPF, Bhutan (Rs 200 crore) and Bank of Bhutan (Rs 200 crore).

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