India and Bhutan sign Agreements to Strengthen Cooperation in Hydro Power
India and Bhutan have signed two documents viz., (i) Agreement on Long-term Cooperation in the field of Hydropower and (ii) the Protocol to the Agreement on Purchase of Power and Tariff of the prestigious Tala Hydroelectric Project ( 1020 MW ). These documents have been signed by the Union Power Minister Shri Sushil Kumar Shinde and the Minister for Trade and Industry of Bhutan Lyonpo Yeshey Zimba in the presence of His Royal Highness, Trongsa Penlop Jigme Khesar Namgyel Wangchuck, the Crown Prince of Bhutan in a ceremony held in New Delhi.
Through the Long Term Agreement, both the countries have agreed to facilitate, encourage and promote the development and construction of hydro power projects and associated transmission systems as well as trade in electricity between the two countries, both through public and private sector participation.
It has also been agreed that for projects to be implemented jointly, a joint group will be set up to facilitate identification of projects, preparation of DPRs and selection of agencies for speedy implementation. The development of the projects would be governed by project implementation and power purchase agreements. The parties entering into such agreements shall mutually determine the terms and conditions of such agreements including implementation, the quantum and parameters of supply, the points of delivery and the price of supply of electrical power.
For construction and operation of hydro projects in Bhutan by public sector and government owned agencies, India shall facilitate availing of facilities including financing from financial institutions in India and deployment of human resources as may be desired by Bhutan.
India has also agreed to a minimum import of 5000 MW of electricity from Bhutan by year 2020. Power exchange between the two countries will play an important role to ensure energy security.
This umbrella agreement will remain valid for a period of 60 years and its validity can be extended by two Governments with mutual consent.
Through the Protocol to the Agreement on purchase of power and Tariff of the Tala Project, which is valid for 35 years, it has been agreed that the first year tariff will be Rs.1.80 per unit. The two countries have also agreed on a mechanism for review of the tariff. The first unit of the project is expected to be commissioned very soon.
Cooperation in the power sector represents a unique win-win model of cooperation between the two countries. These agreements would greatly contribute towards further strengthening the traditionally close and friendly ties between the two nations. These agreements would also help in interlinking of the economies and would promote overall development of both the countries.
PRA:MV:NC
(Release ID :19237)