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India to tap Bhutan for more power

The sub-Himalayan water bodies in Bhutan could turn out to be the next big hotspot for Indian power companies, reports Samiran Saha.

business Updated: Jul 20, 2008 22:41 IST
Samiran Saha

The sub-Himalayan water bodies in Bhutan could turn out to be the next big hotspot for Indian power companies.

India has committed a financial support of nearly Rs 9,300 crore for Bhutan’s hydro-power development over the next 12 years and is aiming to import up to 10,000 mw of power from the Druk country by 2020, up from earlier estimates of 5,000 mw, a top power ministry official said.

India is currently importing 1,020 mw power from Tala Hydroelectric Power Project in Bhutan as part of an earlier pact between the two countries. The project had started generation in July last year.

Recently, the Bhutanese government unveiled its new “Bhutan Sustainable Hydro Power Development Policy 2008”, opening up the floodgates for foreign investors in the hydropower rich country.

In its bid to attract foreign capital, Bhutan’s new hydro power policy has laid down liberal norms. For medium projects up to 100 mw capacity, foreign direct investment (FDI) of up to 74 per cent is allowed.

Up to 100 per cent FDI is allowed in large projects between 100 mw and 1,250 mw. For mega projects of larger capacity, the Bhutan government is looking at sovereign partnerships with governments of other developed nations. Indian companies can look at investing eight major power projects totaling 10,020 mw, all of which would be exported.

In line with the new Bhutanese policy, it is expected that mega projects of more than 1,000 mw will be developed in collaboration with Indian companies, the Indian power ministry official said.

“With Bhutan in proximity of the north-eastern states, wheeling of power will be, easy and will not be fraught with huge transmission and distribution losses,” the official said.

India’s total power generation capacity stands at 1,43,000 mw of which hydropower contributes about 34,391 mw or 25.2 per cent.

India’s current power deficit stands at 17 per cent or 24,300 MW during peak demand time.