The Bhutan Government has turned down proposals of Indian private power companies wanting to set up projects there.
Bhutan is not keen to hand over any new projects to private Indian players till the first 10,000 MW projects with Government-nominated agencies are completed.
“In Bhutan things are difficult. There is first a commitment of 10,000 MW to Indian Government. Unless that is resolved, they cannot really give it to anybody,” said a Chief Executive of private power company, who was recently in talks with the Bhutan Government.
Bhutan believes that projects taken up there should have the backing of the Indian Government, whether it is a project by a State-owned entity or private sector entity.
Bhutan has four major rivers – Torsa, Wangchu, Sankosh and Manas – with more than 23,760 MW hydro-power generation potential.
Companies such as Tata Power were planning to expand in Bhutan. Currently, the Tata Group firm has a joint venture with Druk Power, an entity of the Royal Government of Bhutan, under which it is implementing the 126-MW Dagachhu Hydro Project.
“Allowing private participation in Bhutan’s joint venture projects would have facilitated fast commissioning of the hydro plants,” said Lakshminarayana Ganti, Analyst with Standard Chartered Securities.
However, the Government has so far not taken any steps to rope in private companies for implementing projects in Bhutan. Currently, public sector firms such as SJVN, THDC (Tehri Hydro Development Corporation), NTPC and NHPC have been nominated to take up projects.
Last year, Tata Power sought the Power Ministry’s approval for setting up hydel projects in Bhutan. But, the company is yet to hear from the Ministry.
The bilateral projects set up with Bhutan are funded through grants and long-term loans from India. Also, the electricity generated is purchased by an agency nominated by India.
Out of the 10,000 MW to be commissioned, 1,416 MW is operational. And another 2,940 MW is under construction.