THIMPHU, 11 March, 2021 (TON): In order to finance a 600-megawatt hydroelectric project at Trashiyangtse, the state-owned plants' REC Ltd and Power Finance Corporation (PFC) have entered into an agreement with Bhutan-based Kholongchhu Hydro Energy Ltd (KHEL).

On Wednesday, the REC Ltd stated that KHEL is an equal ratio joint venture between SJVN India and Druk Green Power Corporation Bhutan, set up to develop the 600-MW Kholongchhu hydroelectric project in east Bhutan.

"The project is proposed to be funded in a debt-equity ratio of 70:30 and as per the MoU, REC would extend rupee term loan of Rs 2,029 crore. The balance debt shall be extended by PFC (Rs 2,029 crore), NPPF, Bhutan (Rs 200 crore), and Bank of Bhutan (Rs 200 crore)," it said.

On 9 March, 2021 MoU has been signed by REC Ltd alongside PFC with KHEL, to finance a 600MW hydroelectric project at Trashiyangtse, Bhutan.

REC and PFC, both under the administrative control of the power ministry, are non-banking financial companies in the power sector.

However, REC sources stated that the project is executed as per the inter-government agreement between the Indian government and the Royal Government of Bhutan (RGoB) in April 2014 to implement 4 hydroelectric projects in Bhutan through a joint venture.  And KHEL is the first joint venture between the two.