)
Delayed by over two years due to natural calamities, the 1,200-Mw Teesta-III hydropower project in Sikkim is scheduled to commence commercial production in the first quarter of 2015.
With over 100 per cent of cost overrun, the project has, so far, seen an investment of Rs 7,000 crore from public institutions and over Rs 1,200 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 project is considered to have got one of the largest FDI flows into the country's power sector.
Commencement of Teesta-III is expected to make the tiny Himalayan state not only self-sufficient in electricity but a net power exporter. About 12-15 per cent of Teesta-III power will be available free of cost to Sikkim. About 70 per cent will be transmitted to power-starved states like Delhi, Uttar Pradesh, Haryana and Rajasthan, while the remaining 15-18 per cent will be sold on spot basis, providing significant relief in peak summer months of 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 over 90 per cent of the project work is already over. The project is executed by Teesta Urja Ltd (TUL) with 26 per cent equity from the Sikkim State Government. "Some cosmetic project work and procedural clearances are required which we are confident of getting 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 per cent stake in the project and has already invested about Rs 530 crore.
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 1,000 crore recently, pursuant to the final cost overrun proposal recently approved by the company board. Power Trading Corporation (PTC) holds 11 per cent stake having invested Rs 240 crore.
Additionally, Power Grid Corporation (PGCIL) is a 26 per cent 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.
