- Tata Power will invest Rs 1,572 crore for 40% stake in Dorjilung project
- The 1,125 MW hydro project in Bhutan costs Rs 13,100 crore to develop
- Acquisition will occur in tranches with a shareholders agreement with DGPC
Tata Power on Tuesday said it will invest Rs 1,572 crore for acquiring 40% equity stake in a special purpose vehicle that will set up 1,125 MW Dorjilung hydro power project in Bhutan at an investment of Rs 13,100 crore.
The acquisition will be done in one or more tranches for which a shareholders agreement would be executed between the company and Druk Green Power Corporation Ltd. (DGPC) in Bhutan, a regulatory filing said.
According to the filing, the SPV is yet to be incorporated. The acquisition will not fall under the related party transaction.
However, it stated that post-acquisition, the SPV will become an associate company of Tata Power and consequently a related party.
The SPV will develop the Dorjilung hydro power project at a cost of Rs 13,100 crore. This project will support the company to accelerate its clean and green energy transition.
As per the terms and conditions to be agreed in the shareholders agreement, the first tranche shall be completed within six months.
The cost of acquisition is approximately Rs 1,572 crore for 40% equity stake, in one or more tranche. It will be paid in cash.
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