)
With over 100% of cost overrun, the project has so far seen investment of Rs 7000 crore from public institutions and over Rs 1200 crore in the form of foreign direct investment (FDI) from major private equity players including Morgan Stanley, Everstone Capital, General Atlantic, Goldman Sachs Investment Management, Ashmore Group and Norwest Venture Partners. Teesta III is considered to be one of the largest FDI flows into the country's power sector
Commencement of Teesta - lll is expected to make the tiny Himalayan State not only self-sufficient in electricity, but a net power exporter. About 12 - 15% of Teesta-III power will be available free of cost to the state of Sikkim. About 70% of the rest will be transmitted to power-starved states like Delhi, Uttar Pradesh, Haryana and Rajasthan, while balance 30% will be sold on spot basis, providing significant relief in peak summer months of the northern India. Sikkim's peak hour demand is 114 MW which can go up to 144 MW in a couple of years.
A senior company official said that over 90% of the project work is already over. The project is executed by Teesta Urja Ltd (TUL) with 26% equity from the Sikkim State Government. "Some cosmetic project work and procedural clearances are required which we are confident of getting cleared soon. All disputes have been settled. We will be able to commence the project early next year," said the official.
The Sikkim government acquired 26% stake in the project and has already invested about Rs 530 crore. An amount of another Rs 200 crore as part of its last mile equity commitment is expected to make up for its share of the cost overruns due to various factors like earthquakes and disputes with contractors.
Now that the project is fast nearing completion, it requires timely fulfillment of fund commitments from all stakeholders as well as focused execution by the contractors. The state government's timely investment of its share is vital for demonstrating its continued commitment to the completion of this project of national importance.
In the project, Rural Electrification Corporation (REC) has invested Rs 3,000 crore and sanctioned an additional approx Rs 1000 crore recently, pursuant to the final cost overrun proposal recently approved by the company board. Power Trading Corporation (PTC) holds 11% stake having invested Rs 240 crore.
Additionally, Power Grid Corporation (PGCIL) is a 26% joint venture partner with TUL for installation of 400 KB transmission lines. Power Finance Corporation (PFC) has sanctioned Rs 530 crore to the Sikkim government to meet the latter's equity investment in TUL.
