Debt financing sought for Dhaulasidh project in Himachal Pradesh, India

Indian hydropower producer SJVN, a joint venture of the Government of India and the Government of the northern state of Himachal Pradesh, invites expressions of interest by 15 November for the debt financing of the 66 MW Dhaulasidh hydropower plant.

SJVN seeks a commercial loan for a period of 18 years, including a six-year moratorium, of INR 5.233 billion (approximately US$ 73.53 million), which is equivalent to 80 per cent of the total project cost.

The total capital cost of INR 6.54 billion as assessed at December 2018 comprises INR 4.73 billion for civil and hydro-mechanical works, INR 1.04 billion for electro-mechanical works, interest during construction of INR 735 million and financing charges of INR 26.2 million. Equity financing of INR 1.30 billion equivalent to 20 per cent of the total cost is to be carried by SJVN. The project is expected to generate a return on equity of 16.5 per cent with a first year sale rate at bus bar of INR 4.91 per kWh and a levelized tariff of INR 4.54/kWh.

The proposed run-of-river scheme on the river Beas is designed to comprise a 69.75 m-high concrete gravity dam with a powerhouse, to be equipped with two 33 MW units with vertical shaft Francis turbines at the toe of the dam. The power station is expected to generate 304 GWh utilizing a gross head of 46.37 m (net head of 45.33 m) based on water availability studies. Of the total power generated, 5 per cent of the power from the first to the tenth year, 9 per cent power from 11th to 25th year and 13 per cent from 26th to 40th year (including 1 per cent free power for LADF) will be supplied free of cost to the host state of Himachal Pradesh. The state of Himachal Pradesh will also receive power equivalent to 30 per cent or percentage of actual paid up capital of the balance of the power. The balance power shall be allocated by the Ministry of Power to the beneficiary states of the Northern Region, which are likely to be Haryana, Himachal Pradesh, Jammu Kashmir, Punjab, Rajasthan, Uttar Pradesh, Uttarakhand, Chandigarh and Delhi from the project as per the existing Gadgil Formula and Power Purchase Agreements, which will be signed before commissioning of the project.

The project is scheduled to be completed in a period of 54 months (including pre-construction works) from the date of investment approval. The major works have been divided in three packages, Civil, Hydro Mechanical and Electro Mechanical, which will be awarded after investment approval is conveyed by the Ministry of Power. SJVN signed an MoU with the Government of Himachal Pradesh for implementation of the project on 27 October 2008 and received from the state Government in June 2011 Techno-Economic Clearance that is valid up to August 2020. Environment clearance was given in February 2013 and Stage-I Forest Clearance in March 2012.

Interested lenders are requested to provide the information as per the format provided under Annexure ‘B’ of the tender notification. The tender notice can be viewed on SJVN’s website at http://sjvn.nic.in.

EOIs with terms for debt financing should be submitted in a sealed envelope by post, courier or in person to Anand Upadhyay, Sr. Addl. General Manager (F&A), SJVN Ltd., Office Block, Tower-I, 6th Floor, NBCC Commercial Complex, East Kidwai Nagar, New Delhi-110023;  Tel: +91 11 61901903/61901913; Fax: +91 11 61901916/915.

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