The signing of amendment to Power Purchase Agreement for the sale and purchase of 126 MW Dagachhu Project power between Tata Trading Power Company Ltd, India, and Dagachhu Hydro Power Corporation Ltd (DHPC) was held on September 29, 2014 at Thimphu.
The tariff has been revised from Nu./INR 2.40 to Nu./ INR 2.90 per unit with 2% annual increase in view of the escalation of cost to completion of the project.
DHCP is a run-of-the-river hydropower plant with an installed capacity of 126 MW.
The project, is located Dagana Dzongkhag, is a run-of-the-river scheme being developed on the left bank of river Dagachhu, The mean annual generation from the project is 515 GWh and 90% dependable energy production is 360 GWh.
The project was approved for implementation at an estimated cost of US$ 201.50 million, corresponding to Nu. 8.16 billion (2008 price levels and exchange rates) at 60:40 debt equity ratio. Taking into consideration the actual costs of award of major contracts, encountering of poorer geology, geological surprises and assumption of the geological conditions of the remaining length of headrace tunnel excavations, variation in quantity of supports and a stronger US $
and Euro than at the time of decision of investment, cost to completion of the project has been revised to Nu. 12,226.739 million. DGPC holds 59% equity, Tata Power Company Limited, India 26% and National Pension & Provident Fund of Bhutan the remaining 15% of the equity. Asian Development Bank is providing loan of USD 51 million for financing the civil works; RZB, Austria is providing loan of Euro 41.23 million for financing the E&M works, and the NPPF is providing loan of Nu. 600 million.
Besides the royalty energy, all the power from the project shall be evacuated to India through a long term Power Purchase Agreement with Tata Power Trading Company Limited, India.
A notable achievement of DHPC is that it is the world’s first trans-boundary Clean Development Mechanism (CDM) project to be successfullly registered with UNFCC.