Actual construction of the 118 MW Nikachhu hydropower project in Trongsa will happen anytime this month with a signing of a financial deal worth Rs 3.5B between Tangsibji Hydro Energy Limited and a consortium of Indian banks.
The Tangsibji Hydro Energy Limited was created as a Special Purpose Vehicle to implement the Nikachhu hydropower project.
The State Bank of India will be lending Rs 2.5B and Exim Banks Rs 1.03B. The lending is being backed by a corporate guarantee from the Druk Green Power Corporation.
DGPC’s managing director, Chhewang Rinzin said the agreement was a first of its of kind where DGPC is providing a corporate guarantee for the loans.
However, the amount is far too short of the total cost of the project, which is being built at Rs 11.8B. The project will be financed with a debt equity ratio of 65:35.
The remaining cost is being met from the Asian Development Bank who is financing Rs 4B for the project. The ADB is also financing DGPC’s equity by providing Rs 3B. DGPC will be funding the remaining Rs 1B in the project.
Meanwhile, construction of access infrastructure for the project is almost complete. The project is expected to commission by July 2019.
