Strap: Implementation agreement with Himagiri Hydro Energy, which was earlier awarded the project, lapsed on Sept 7
PTC India Financial Services has sought renewed bids for the 300 MW Panan Hydropower Project as Himagiri Hydro Energy, which was awarded the project, has not been able to achieve financial closure.
Financial closure is achieved when all agreements with banks and financial institutions for funds are made and all the conditions precedent to initial drawing of debt are satisfied.
Hyderabad-based Himagiri Hydro Energy was awarded the $383-million Panan project in 2005. The implementation agreement with the Sikkim state government lapsed on September 7, according to sources.
An e-mail sent to PTC Financial did not elicit a response. The Sikkim Government is to infuse 26 per cent equity in the joint venture project, which proposes to construct a dam across the Rangyongchu river, at the foot of Lingzya village in North Sikkim.
The last date for bid submission for the project is October 9.
Market watchers say financial closure could not be achieved on account of the strong opposition from the locals in Dzongu, where the project is slated to come up. In the past, concerns have been raised on the impact the project would have on the culture, demography and social fabric of the native Lepcha people. It could affect the fragile ecology of the region, according to industry watchers.
The project developers had not obtained clearances from the National Board of Wildlife for the project, which would be located within 10 km of the Kanchenjunga National Park and the Biosphere Reserve. Locals had also alleged that Himagiri had no previous experience in building hydro power projects.
All the necessary clearances have now been got, said a source.
The state government holds a 26 per cent stake in the project and is expected to receive royalty in the form of power at 12 per cent for the first 15 years. The royalty will increase to 15 per cent from the 16th to the 35th year, after which the project is scheduled to come under full ownership of the state.
The Panan hydro project is one of a group of three stalled hydro projects in Sikkim. The other two projects are the 500MW Teesta VI project being built by Lanco Teesta Hydro Power and the 120 MW Rangit IV project, which was awarded to Jal Power Corporation in 2004.
In 2016, the Power Ministry was planning to hold discussions with the Sikkim state government to revive the projects.