SJVNL signs pact with Bhutanese company for 600 MW hydel plant

State-run SJVNL today said it has signed a preliminary agreement with Druk Green Power Corporation of Bhutan for setting up a 600 MW hydro electric power plant in the neighbouring nation.

"To expedite the establishment of a Joint Venture company and to start the construction activities for the 600 MW Kholongchu Hydro electric Project in Bhutan, SJVNL and Druk Green Power Corp signed a Memorandum of Understanding (MoU)," SJVNL said in a statement.

The MoU was signed by SJVNL CMD R P Singh and DGPC MD Dashu Chhewang Rizin in the presence of P K Sinha, Secretary Power, Government of India and Dashu Sonam Tshering, Economic Affairs Secretary, Government of Royal Bhutan.

SJVNL and DGPC have decided to form the JV Company within three months, the statement said.

It has also been agreed to set up a steering committee to initiate the tasks of getting statutory clearances and to acquire land required for the project, it added.

After finalising of the shareholders' agreement the Joint Venture will be formally registered.

Financing for the project will be done on 70% loan and 30% equity.