India signs $59.1 million deal with ADB

Written by Swarleen Kaur | Chandigarh | Updated: Mar 15 2010, 08:38am hrs
India has signed a $59.1-million agreement with Asian Development Bank (ADB) for the second tranche of the Himachal Pradesh Clean Energy Development Investment Programme.

The second tranche will cover civil works for construction of a diversion barrage, power intake, de-sanding arrangements and gates and hoisting for the Sawra Kuddu hydroelectric project, located in Shimla.

The programme, approved in 2008, is being developed at a cost of $800 million and the loan amount will end on September 30, 2016. The eight-year loan package will help finance the construction of several run-of-river hydropower generating plants that will bring in combined generation of 850 mega watt. The loan agreement will ensure construction of the Sawra-Kuddu (111 mw); Kashang-I, II and III (195 mw), Sainj (100 mw) and the Shongtong-Karchham Project (450 mw), which had been assigned to Himachal Pradesh Power Corporation Ltd (HPPCL). The first tranche of the project was signed on November 10, 2008, for $150 million.

Talking to FE, HPPCL managing director Tarun Kapoor said, "Work has commenced on the Sawara-Kuddu and Kashang projects. Civil work contract for the Sawara-Kuddu project has been awarded to the Mumbai-based Patel Engineering, Kirloskar Construction of Chennai and Coastal Joint Venture of Hyderabad. For the Kashang plant, civil work has been awarded to Hindustan Construction Co. The project of Sawra-Kuddu is expected to be commissioned by 2012. The Kashang and Sainj projects are expected to be completed by 2013, while the Shongtong-Karchham project should be compled by 2014-2015," he added. Kapoor informed that in all, around four tranches will be signed. The third tranche is expected to be signed in the next three months for the remaining work at Kshang and Sainj. The fourth tranche will be for Shongtong-Karchham. "This is a prestigious project for us. It is expected to generate direct employment for about 400 people, and indirect employment for 5,000 people approximately," he added.

The power generation potential of Himachal Pradesh is 23,415 mw, which stands at about 25% of Indias total hydropower potential. Only about 6,500 mw has been developed in the state. The total estimated cost of the proposed projects was Rs 7,500 crore approximately, out of which ADB has agreed to give about Rs 3,800 crore in the form of a multi-tranche financing facility.