Etalin Hydro Electric Power Company Ltd, a 74:26 joint venture of Jindal Power and Hydro Power Development Corporation of Arunachal Pradesh, is setting up the run-of-the-river project on rivers Dri and Tangon
Jindal Steel and Power Ltd’s wholly-owned subsidiary Jindal Power Ltd is looking to sell part of its 74 percent stake in special purpose vehicle (SPV) that's setting up the Rs 20,000 crore Etalin Hydroelectric Project in Arunachal Pradesh, according to Ravi Uppal, the MD and Group CEO of the New Delhi-headquartered Naveen Jindal Group.
With a capacity of 3,097 MW, it would be the country’s largest hydro electric power project, the title currently held by the 1,096 MW project on river Koyna in Maharashtra.
Etalin Hydro Electric Power Company Ltd, a 74:26 joint venture of Jindal Power and Hydro Power Development Corporation of Arunachal Pradesh, is setting up the run-of-the-river project on rivers Dri and Tangon in the state’s Dibang valley.
Power projects are set up on the basis of 70:30 or 80:20 debt-equity ratio and hence committing to an equity contribution in proportion to its 74 percent stake in a special purpose vehicle that’s setting up the Rs 20,000 crore project may not be feasible for the cash-starved group.
“We don’t have that money to put in Rs 20,000 crore. Either we should get an overseas investor or we need support from a government agency, any government representative, whether you say that it is a Bhakra Beas which steps in, Napththa Jhakri steps in, or any other government institution in hydro. NHPC comes in as a partner. So if that thing happens, I am sure that we can get the project started,” Uppal said in an interview to Moneycontrol.
According to Jindal Power, the proposed installed capacity at Dri is estimated at 1,842 MW (6x307 MW) and that for Tangon at 1,228 MW (4x307 MW). Riparian flows from both the limbs have also been proposed to be utilised for power generation of 27 MW (19.6 MW on Dri and 7.4 MW on Tangon). The total installed capacity of the proposed project is 3,097 MW.
He said the company had apprised the Ministry of Power of its situation and was willing to complete it in 5 years but needed the government support to help it tide the financial crunch.
“We have got environmental clearance, forest clearance. We have got land. We have done the model studies. We have finished the complete pre-tendering for the project,” Uppal said.
He said the company was also waiting for the government’s hydro electric policy to firm up its decision on the project that he claimed would supply the country’s cheapest power.
As of now, hydel projects of up to 25 MW only are considered under renewable category and thus only such units get tax and other benefits. Hydel projects of over 25 MW are considered as conventional units and thus don’t get many of the benefits that units of up to 25 MW manage to get.
Under the new policy, likely to be announced any time now, all hydel projects will be treated at par and thus get the same benefits that currently only go to units of up to 25 MW. The new policy is likely to provide viability gap funding to hydel projects besides offering developers the facility of a single-window clearance for their proposed projects. Another significant clause that the new policy could have is a hydro purchase obligation or HPO — on the lines of renewable purchase obligation or RPO.
As per the law, utilities are required to buy a certain part of their total power demand from plants running on renewable energy sources. Each state — power being a state subject — has its own minimum threshold that it imposes on utilities for adhering to RPO including a separate RPO for solar.Jindal Steel, saddled with Rs 45,000 crore of debt on its books is almost done with its largest capital expenditure plan in years and will now be focused on small projects that won’t cost much but bring high yields, he said.