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REC, PFC sign pact to finance 600-megawatt hydropower project

On March 10,2021 REC Ltd(formerly Rural Electrification Corporation Limited ) and Power Finance Corporation (PFC) from New Delhi made an agreement with Bhutan-based Kholongchhu Hydro Energy Ltd for the financing of 600- megawatt(MW) hydroelectric project at Trashiyangtse, Bhutan.

Fund Distribution :-

The project is funded to be in a debt-equity ratio of 70:30.Based on the ratio,

  • REC would extend term loan of Rs 2,029 crore
  • PFC extend loan of Rs 2,029 crore,
  • NPPF, Bhutan extend loan of Rs 200 crore and
  • Bank of Bhutan extend loan of Rs 200 crore

Background of Project Execution:-

i.The project has been executed as per Inter Governmental (IG) Agreement between Government of India and the Royal Government of Bhutan (RGoB) for the development of four joint venture hydroelectric projects including 600 MW Kholongchhu Hydro Electric Project in eastern Bhutan through the Public sector undertakings of both the governments was signed on 22nd April 2014 .

  • KHEL is the first Joint Venture being undertaken between the two governments for implementation of the 4×150 MW(600MW) Kholongchhu hydroelectric project.

ii.The agreement was signed by Mr. Pradeep Kumar Sinha, Secretary, Ministry of Power and  Mr. Sonam Tshering, Secretary, Ministry of economic affairs on behalf of the GoI and RGoB respectively at Thimphu,capital of Bhutan.

Info About Kholongchhu Hydro Energy Ltd(KHEL)

KHEL is a 50:50 joint venture between SJVN India and Druk Green Power Corporation (Bhutan) under the companies Act of Kingdom of Bhutan, 2000 on 12th June 2015 for the development of 600 MW Kholongchhu Hydro Electric Project in eastern Bhutan.

Chairman, KHEL – Dasho Yeshi Wangdi Former Secretary, MoEA, RGoB

Recent Related News:-

On January 3, 2021 ,The Power Development Department (PDD), Jammu and Kashmir(J&K); National Hydroelectric Power Corporation (NHPC) Ltd and J&K Power Development Corporation signed many Memorandum of Understandings(MoUs) to implement & execute mega hydro power projects in J&K.

About REC Limited
REC Limited, formerly Rural Electrification Corporation Limited, is a public Infrastructure Finance Company under Ministry of Power. The company is a Public Sector Undertaking and finances and promotes rural electrification projects across India.
Established in – 1969
Chairman and Managing Director – Shri Sanjay Malhotra, IAS
Headquarters – New Delhi

About Power Finance Corporation Ltd
It is a Schedule-A Navratna CPSE, and is a leading Non-Banking Financial Corporation in India under the administrative control of the Ministry of Power.
Established in – 1986
Chairman & Managing Director – Shri Ravinder Singh Dhillon
Headquarters – New Delhi