India to allocate $438M for hydropower projects with Bhutan

India-assisted hydro electric projects in Bhutan during FY 2012-13 will require an annual funding of US$438 million.

This information has been conveyed by India's Ministry of External Affairs to the Ministry of Finance long before the commencement of the financial year to ensure timely release of funds.

The ministry insists that the amount be allocated in full to enable continuation of the smooth and timely implementation of hydel projects.

The MoF has now been asked to step up its efforts and ensure that no joint venture project faces any hiccups on account of meager allocation of funds in the forthcoming year.

The MEA has also directed Central Electricity Authority to assess the financial viability of each of the four projects, namely -- the 670 MW Chamkharchhu-I HEP, the 180 MW Bunakha HEP, the 486 MW Kholongchhu HEP and the 600 MW Wangchhu HEP -- on stand-alone basis as per the net present value of cash outflows.

The cabinet's approval will be sought for the draft JV agreement as well as the inter-governmental Memorandum of Understanding, that will be common for all JV projects and will guarantee the obligations of India and Bhutan with regard to the four projects.