The Bhutanese Leading the way.
In a major development, the troubled 570 MW Wangchu hydropower negotiations between the Druk Green Power Corporation (DGPC) and the Adani Group have crossed a major hurdle, with the Adani Group agreeing to a minority stake of 49% in line with the government’s policy.
The negotiations had been stalled last year when the Adani Group had informally asked for a 70% stake in the project, and also 90 years plus concession period instead of the 30 years concession period offered by DGPC with a possible 5 year extension.
It has been learnt that the tenure or concession period will be 30 years now.
Currently, the negotiations, are around the technical parameters as the Adani Group wants to review the complete project’s Detailed Project Report.
A source said, “Any shareholder before investment reviews the whole thing. It is just routine and takes at least 2 to 3 months.”
The technical review is to also see if the 570 MW run of the river project can become a 900 MW Reservoir project which it is likely to become.
After narrowing down on the technical aspects, the discussions on financing will get underway.
In October 2024 when a team from the Adani Group came in, the Adani Group and DGPC discussed a possible option where the project would be converted into a Special Purpose Vehicle where DGPC could have its majority share, but it would have to be registered in India to raise money.
However, a headache, here, is that since power is treated as a strategic sector in India, such SPVs is currently not allowed under current rules in India, though SPVs are allowed in other areas.
If that does not work then the SPV could even be located in a third country destination, like Singapore, etc.
On 15th June 2024 Gautam Adani, the Chairman of the Adani Group in India, sent out a tweet saying that he has signed an MoU with DGPC for the 570 MW Wangchu Hydro Plant in Chukha.
The MoU was signed with the informal understanding, at least from the Bhutanese side, that the Adani Group would get a significant but minority stake in the project, with the majority shares owned by the DGPC.
Things went awry when a higher stake was asked for soon after the MoU was signed but things are back on an even keel for now. It remains to be seen how the financing discussions go.
