Nikachhu Hydropower Moves toward Start of Construction
22 April 2016
The contract for civil and hydro-mechanical works of the Nikachhu Hydro Energy Project has been awarded to the Hindustan Construction Company Limited, in an international bidding held by Tangsibji Hydro Energy Limited (THyE), a subsidiary company of Druk Green Power Corporation (DGPC).
Works under the commissioned contract, worth around $69 million, are scheduled to start as early as July 2016 and will include procurement, construction of civil structures, erection, testing, and commissioning of hydro-mechanical equipment.
The 118 megawatt Nikachhu hydropower plant aims to become another model hydropower development in Bhutan. According to Bhutan Economic Affairs Secretary Dasho Yeshey Wangdi, the project’s layout will add almost 65% generated energy, around 324 units, to the 492 million units it will generate on its own by allowing water from its turbines to flow into the Mangdechhu project dam. The project will follow stringent environmental and social safeguard measures.
Total project costs of $175 million will be funded through a public-private partnership financing modality, the first of its kind in Bhutan. ThyE and a consortium of Indian Banks, the State Bank of India and EXIM, signed a loan agreement of around $53.5 million in November 2015. DGPC will fund around $16.96 million, and the Asian Development Bank will provide $120.5 million loan/grant assistance, approved in 2014, under the Second Green Power Development Project.
Power generated through the project will boost renewable energy generation in Bhutan, and further expand cross-border power trading in the region. To date, Bhutan is the only South Asian country with a surplus of power for export. This hydropower plant will contribute to the country's energy exports to India, and firm up Bhutan's strategy of exporting clean energy to generate revenue.
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