The mega hydro power project, Sawalakote, with 1,200 mw installed capacity, has been approved at the project cost of Rs 7,000 crore against the earlier estimated cost of Rs 7,586.68 crore for only 600 mw, according to an official release on the governments website.
The estimated cost per mw has been worked out at Rs 5.83 crore, and accordingly, the per unit cost would be Rs 2.05, the cheapest power generation cost in the state so far, the release added.
The state cabinet, which met under the chairmanship of chief minister Ghulam Nabi Azad, also sanctioned the implementation of the project to a consortium comprising SPAS of Norway, Ozaltin of Turkey and HCC of India, at an estimated project cost of 415 million euro and Rs 1,926.25 crore. The new estimated cost will not be subject to any increase, including that on account of escalation. However, it can be subject to reduction as may be agreed by the consortium and Jammu and Kashmir State Power Development Corporation(JKSPDC), it said.
The consortium would construct two to three mini hydro-electric power projects of 10 mw capacity, free of cost, during the completion period of the Sawalakote project within seven and a half years.
The cabinet authorised the managing director, JKSPDC, to approach international and national lending institutions for financing with a debt equity ratio of 70:30. The J&K government would provide 30% of the project cost as equity, out of which advance 10% would be released at financial closure and 10% at the start, to the consortium against bank guarantee.
The state government will also approach the Union power ministry for accordance of mega status to the Sawalakote power project. In addition, JKSPDC shall incorporate a special purpose vehicle (SPV) for speedy completion of the project.