MoF clears Rs 2500 cr ‘subordinated debt’ for Pakal Dul construction

“After lot of efforts and persuasions, we have been able to secure Rs 2500 crore subordinated debt (also known as subordinated loan) at one percent interest rate from the Finance Ministry for construction of Pakal Dul,” said Chairman, Board of Directors, CVPPPL, MY Khan.

Pakal Dul is one of the three projects that would be set up by CVPPPL—a joint venture between State’s Power Development Corporation (PDC), National Hydroelectric Power Corporation (NHPC) and Power Trading Corporation of India (PTC)—on Chenab basin. The other two projects are 600-MW Kiru and 520-MW Kawar.

The CVPPPL, set up to tap an estimated 10000-MW hydropower potential of Chenab basin, was pursuing Pakal Dul case with the Finance Ministry for more than a year and had presented it before the Union Power Ministry and the PMO as well. Khan said the company received final approval from the Finance Ministry few months back.

“Apart from minimal interests rate, the benefits of subordinated debt is that repayments are to be done after all other debts are cleared,” Khan said.

The company is also pushing for grant of “National Project” status to Pakal Dul by Union Water Resource Ministry which would help it to get additional grants of Rs 1200 crore from Government of India.

“We are pursuing the case with the ministry for the past one year,” Khan said.

Besides, Khan said the company has been successfully able to get commitment on 10.75 percent interest rate on loans for project construction from different financial institutions as against interest rate of 11.75 percent envisaged earlier.

Many financial institutions like Power Finance Corporation, PTC and State Bank of India have shown interest to fund the Pakal Dul construction.

The company, after proper bidding, has already shortlisted a consortium of Patel Engineering, Lymak (Turkey) and BHEL to award project construction after it received techno-economic clearance from the Central Electricity Authority and got nod from forest, environment and wildlife departments for the project.

“We will be awarding the project in next couple of weeks and work will start in another couple of months which will pave way for release of money from the ministry,” said Khan. J&K would get a share of 600-MW from Pakal Dul, he said.

One of the complicated hydropower projects which would involve lot of tunneling and storage, Pakal Dul would be the first storage schemes in J&K. The only other storage project planned in J&K is Bursar where NHPC is struggling to prepare the project report for many years.

“It (Pakal Dul) will be mother project for five downstream projects on Chenab as it will regulate additional water to push up generation by 200 MW from these projects,” said Khan.

The project is coming up on river Marusudar of Chenab basin in Kishtwar district and has been rescheduled for completion in five and a half years, one year less than original proposal.

Meanwhile the CVPPPL is also expecting to start work on 600-MW Kiru, planned 25 km upstream of Dulhasti later this year while as it is planning to take up construction of 529-MW Kawar near village Padyarna in Kishtwar district, next year. Both Kiru and Kawar are run-of-the-river projects on Chenab.

As per the MoU, share of JKSPDC, NHPC and PTC in CVPPPL shall be in ratio of 49:49:2 respectively.

Of total 2100 MW power generated from three projects J&K’s share shall be 1200-MW. J&K would have first right of refusal for remaining energy from the projects.

However, as per the MoU, JKSPDC would have a share of not more than 49 percent while NHPC would have share of not less than 49 per cent in CVPPPL.

Jammu and Kashmir is struggling to better power scenario.

As against requirement of around 2600-MW, the state produces around 760-MW from state owned projects while as it imports around 1200-MW from northern grid to tide over the shortfall in generation.