NHPC Eyes Foreign Funds To Expand Hydel Power Capacity

NHPC Ltd. is looking to tap foreign funds for its hydel power projects as it aims to raise its capacity by nearly a third by 2022.

This comes after the union cabinet gave its nod to recognise hydropower as renewable source of energy. “We might find some kind of cheaper funding by multilateral lending institutions as the government has recognised hydropower as renewable source of energy,” Balraj Joshi, chairman and managing director at NHPC, told BloombergQuint in an interview. “With this, we will be able to achieve COP21 targets.”

The state-owned hydropower developer, according to Joshi, is planning to raise its power generation capacity from about 7.1 gigawatt to 10 GW by 2022. “We are trying to tap Canadian Pensions Funds. We are in initial discussions with AFD (Agence Française de Développement) and KfW for Teesta-IV project to lend Rs 2,800 crore for 18 years. They have also shown interest. We have requested World Bank and Japan International Cooperation Agency also for the same project,” said Joshi. “Whosoever gives us a better deal, we will go with them.”

The hydro-electric power producer is eyeing renewable energy investors from across the world. “We will be having a roadshow soon in Singapore where we will float these requirements. We need funding for Teesta-VI, Teesta-IV, Ratle project which is in Jammu and Kashmir,” he said. “We are trying to tap Australian funds also.”

Earlier, hydro projects of up to 25 megawatt capacity were considered as renewables and were eligible for various incentives like financial assistance and cheaper credit. With the government amending the hydropower policy, hydro projects above 25 MW can also avail the benefits.

Cabinet has also approved budgetary support for funding flood-moderation component of hydropower projects on a case-to-case basis, Joshi said. “Earlier, flood moderation cost was not covered. With this, we will be able to start 2,880-MW Dibang project in Arunachal Pradesh at a faster pace,” he said. “We will get budgetary support of Rs 4,627 crore from the government.”

The foundation stone for the Rs 28,000-crore Dibang project was laid six years back by then Prime Minister Manmohan Singh. The project failed to receive the final clearance from the central government as it hasn't gotten the environmental clearance from the state government, according to a report by the Parliament's Standing Committee on Energy in January.

Still, Joshi is hopeful that it may get the approval after the elections.

NHPC is also looking at some of the stressed hydel power projects to expand its generation capacity. The company is interested to bid for Athena Energy's Demwe project in Arunachal Pradesh. “After successfully winning the bid for Lanco Teesta-VI, we are also eyeing 1,750-MW capacity Demwe hydro project. We find merit in this project. Tariff is cheaper and cost of the project is lesser,” said Joshi. “It was NHPC's project before Arunachal Pradesh government gave it to Athena Energy.”