The Hindu

India, Bhutan sign hydel pact

31 July 2006

NEW DELHI: India and Bhutan entered into an agreement for long-term cooperation in the field of hydel power and also inked another protocol document for the purchase of power generated by the 1,020 MW Tala hydel project.

The documents were signed here by Union Power Minister, Sushilkumar Shinde, and Minister for Trade and Industry of Bhutan, Lyonpo Yeshey Zimba, in the presence of the Crown Prince of Bhutan, Trongsa Penlop Jigme Khesar Namgyel Wangchuck. Both countries have agreed to facilitate, encourage and promote development and construction of hydel power projects and associated transmission systems as also trade in electricity, both through public and private sector participation.

For projects to be taken up jointly, a joint group is to be set up to facilitate identification of projects, preparation of DPRs (detailed project reports) and selection of agencies for speedy implementation. The development of the projects will be governed by project implementation and power purchase agreements and the parties entering into such agreements shall mutually determine the terms and conditions, including implementation, the quantum and parameters of power supply, the points of delivery and the price of supply.

For construction and operation of hydel projects in Bhutan by public sector and state-owned agencies, India shall facilitate availing of facilities, including funding from its financial institutions and deployment of human resource, as may be desired by Bhutan.

India has also agreed to a minimum import of 5,000 MW of electricity from Bhutan by 2020. Power exchange between the countries will play an important role in ensuring energy security. The umbrella agreement will remain valid for a period of 60 years and can be extended by the two Governments with mutual consent, an official release here said.

Through the protocol to the agreement on purchase of power from the Tala project, valid for 35 years, it has been agreed that the first year tariff will be Rs. 1.80 [0.04cents] per unit.

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