NHPC J&K project may get ₹18,700 cr subordinated debt

New Delhi: The power ministry is exploring a proposal to provide about ₹18,700 crore of subordinated debt at a low interest rate for NHPC Ltd's 1,856 MW Sawalkote hydroelectric project in Jammu and Kashmir, people aware of the development said.

The proposal is at an exploratory stage and remains subject to consideration by the expenditure finance committee and subsequent approvals, they said. The Expert Appraisal Committee of the environment ministry had evaluated the proposal on September 26 last year, wherein the cost of the project was indicated at ₹31,380 crore, according to one of the persons. The subordinated debt is being considered to support the financing of the large hydropower project.

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The power ministry and NHPC Ltd did not respond to e-mailed queries from ET till the time of publishings. Sawalkote project is among the major hydropower projects being developed by NHPC in Jammu and Kashmir.

India's decision to put the Indus Waters Treaty (IWT) in abeyance last year has been followed by a renewed push to expedite the development and maximise hydropower potential in Jammu and Kashmir, particularly on the western rivers covered by the treaty.

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In January, power minister Manohar Lal reviewed NHPC's hydroelectric projects in the UT, including visits to Salal and Sawalkote projects. The government has also approved a few large hydropower projects, particularly in Arunachal Pradesh, in the last few months. In April, the Cabinet approved the 1,200 MW Kalai-II project on the Lohit River in Anjaw district at an estimated cost of ₹14,105.83 crore, followed by the 1,720 MW Kamala project for ₹26,069.50 crore.