Srinagar, Aug 23: After Government of India’s refusal to fund the construction of 450-MW Baghliar-II hydropower project in Jammu and Kashmir, the state Government today secured lending support from Power Finance Corporation (PFC) for execution of the mega project in the state sector.
Managing Director, J&K State Power Development Corporation, Basharat Dhar today entered into a loan agreement with Chairman and Managing Director PFC, Satnam Singh, at New Delhi on the project. The project is coming up at a cost of Rs 3113.19 crore and is targeted for completion in 2015-16. The project will generate about 1300 million units of power annually.
“The debt component of Baghliar-II shall be funded by Power Finance Corporation and J&K Bank to the extent of Rs 1679.23 crore and Rs 500 crore respectively with the balance requirement being met through state equity,” said Dhar.
The JKSPDC has already signed the loan agreement with the Bank on 14th of this month, he said.
With the PFC agreement, the JKSPDC has achieved the financial closure for implementation of the project in “record time” unlike Baghliar-I which took six years to complete the process, Dhar said.
Much to the relief of the state Government, both the lending institutions have not insisted on mortgage of assets which was a precondition at the time of funding for stage first of the project.
“The Corporation has significantly improved its performance over the years,” said Deputy General Manager, JKSPDC, Iftikhar Ahmad Kakroo. “The Corporation has been repaying the debt on Baghliar-I without any default.” Earlier, the Planning Commission had asked JK to identify the funding sources such as through state’s own resources, sale of power, borrowings and loans ahead of the consideration by the Government of India on grant from the same.
Like Baghliar-I, which is also of 450-MW capacity, the second phase of the project would also be completely state-owned. It would also be a run-of-the-river project coming up in district Ramban. The dam already built for Baghliar-I would be used for the Phase-II of the power project.
The construction of Baghliar-II involves two types of works- civil and electro-mechanical. While the electro-mechanical part is being taken care of by the Voithhydro Ltd, the civil works are being executed by New Delhi-based Jayprakash.
The Government expects the project would address the power requirements of the state to a large extent. At present, Jammu and Kashmir generates almost 758 MW electricity from its power projects including Baghliar-I. The actual requirement of energy is around 2250 MW. The shortfall is met by power purchases from outside the state.
Major chunk of the electricity generated from Baghliar-I, commissioned in October 2008, is currently going towards debt servicing for an initial period of 10 years.
“The daily earnings from the Baghliar-I is around 3.5 crore out of which 50 per cent goes towards debt clearance,” said an official.

Lastupdate on : Thu, 23 Aug 2012 21:30:00 Makkah time
Lastupdate on : Thu, 23 Aug 2012 18:30:00 GMT
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