Chuzachen Hydro Power Project

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The Chuzachen Hydro Power Project was a 99 MW run-of-the-river project located about 60 Kms from Gangtok in the state of Sikkim on the Rangpo and Rongli rivers. The project was being developed by Gati Infrastructure Limited on a Build, Own, Operate, and Transfer (BOOT) basis. The concession was for a period of 35 years. under joint sector with the Government of Sikkim (GoS) through Sikkim Power Development Corporation Limited (SPDCL). Gati Infrastructure Limited was holding 74% stake in the project and Government of Sikkim (GoS) was holding the remaining 26% through Sikkim Power Development Corporation Limited (SPDCL). The equity participation of GoS did not involve any actual upfront payment by the Government. Instead, the payment of upfront equity was to be adjusted against the proceeds from sale of free power from the project to the GoS. The project was required to provide royalty to the GoS in the form of free power to the extent of 12% of the energy generated for the first 12 years, 18% of the energy generated for 12-30 years and 30% of the energy generated for beyond 30 years. The details of the final set of PPAs signed were not available at the time of collection of this information. The project was awarded by GoS by way of competitive bidding on the basis of the highest upfront premium paid to GoS. SPDCL was responsible for conducting the bidding process on behalf of GoS. The project was estimated to cost US$ 112.19 million and achieved financial closure in March 2007. On February 2013, additional loans of US$ 83.1mn (INR 4870mn @58.6 INR/USD) for funding cost overruns along with the prepayment of certain existing senior loans was availed. Financing comprised a 15 year term loan provided by RECL. The loan was priced at 14% and had a repayment schedule of 60 quarterly installments. The project was expected to be commissioned in 2009-10. The project was fully commissioned in May 2013.