CCEA approves Rs 45.26 billion investment for 540 MW hydro electric project in J&K

The Cabinet Committee on Economic Affairs chaired by the Prime Minister has approved the investment of Rs 45.26 billion for 540 MW Kwar Hydro Electric Project located on river Chenab, in Kishtwar district of Union Territory of Jammu and Kashmir (UT of J&K). The project will be implemented by Chenab Valley Power Projects Private Limited (CVPPL), a joint venture between NHPC and J&K State Power Development Corporation (JKSPDC) Limited with equity contributions of 51 per cent and 49 per cent, respectively. The project is expected to produce 1975.54 million units in a 90 per cent dependable year.

The Government of India is extending a grant of Rs 698 million towards the cost of enabling infrastructure, as well as supporting the UT of J&K with a grant of Rs 6.55 billion for JKSPDC’s equity contribution in CVPPPL. NHPC from its internal resources shall invest Rs 6.81 billion in its equity. The Kwar Hydroelectric Project is expected to be completed in 54 months. The power generated by the project will help balance the grid and improve the power supply position.

To make the project viable, the Government UT of J&K will extend exemption from levy of water usage charges for 10 years after commissioning the project. Reimbursement of the state’s share of GST (SGST) and waiver of free power at 2 per cent per year in a decremental manner. This means that the free power to the Union Territory of Jammu & Kashmir would be 2 per cent in the 1st year after commissioning of the project and thereafter shall increase at 2 per cent per year and will be 12 per cent from 6th year onwards.

In addition, the construction activities of the project will result in direct and indirect employment to around 2500 persons and will contribute to the overall socio-economic development of the Union Territory of Jammu & Kashmir. Further, the Union Territory of Jammu & Kashmir will be benefited with free power of around Rs 45.48 billion and Rs 49.41 billion with water usage charges from Kwar Hydro Electric Project, during the project life cycle of 40 years.

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