The Hindu Business Line : IFC commits $49 m for Himachal hydel project

INTERNATIONAL Finance Corporation (IFC), the private sector arm of the World Bank, has committed around $49 million of equity and debt funding to the 192 MW AD Hydro Power Ltd. — one of the first hydro power plants to be financed on a merchant basis in South Asia.

The project, coming up in Himachal Pradesh, is expected to alleviate peak electricity shortages in the north, an IFC release said here.

IFC's financing consists of a loan of up to $42 million and equity of up to $7 million for a 10 per cent stake in the project. The loan will have a maturity of 15 years and will be denominated in rupee terms, the release said.

The project involves the construction, operation, and maintenance of the 192 MW run-of-the-river hydroelectric power project in the Kullu district of Himachal Pradesh, and the construction of a 185 km, 220 kV transmission line that will extend to the interconnection point on the regional grid. The power plant will utilise the perennial flows of the Allain and Duhangan rivers and combine the flows through two underground headrace tunnels to feed a single powerhouse near Prini village. The estimated construction period is about four years and the total cost is about $195 million.

The project sponsor is Malana Power Corporation Ltd, which is owned 51 per cent by the LNJ Bhilwara group and 49 per cent by Statkraft Norfund Power Invest AS of Norway (SN Power). It will have a number of other significant positive impacts, including employment creation, reduction of greenhouse emissions, and a community development programme, the release said.

Mr Francisco Tourreilles, IFC's infrastructure director said, "This is an excellent example of IFC's support for innovative infrastructure projects, which are important to the Indian economy. IFC welcomes the opportunity to work with the Bhilwara group and SN Power to develop India's power sector."

Mr Iyad Malas, IFC's South Asia Director, added, "We hope this project and SN Power's participation will lead to further private sector interest in India's power sector as well as more foreign direct investment."

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