The Union Cabinet on Wednesday approved an investment proposal of Rs 5,281.94 crore for the 850 MW Ratle hydro power project on river Chenab in Kishtwar district of Union Territory of Jammu and Kashmir, an official statement said.
The project will be constructed by a joint venture company (JVC) to be incorporated between National Hydroelectric Power Corporation (NHPC) and Jammu & Kashmir State Power Development Corporation Ltd (JKSPDC) with equity contribution of 51 per cent and 49 per cent, respectively.
The Government of India is also supporting the Union Territory of Jammu and Kashmir by providing grant of Rs 776.44 crore for equity contribution of JKSPDC in the JVC, the statement added.
NHPC shall invest Rs 808.14 crore from its internal resources. The Ratle hydro electric project shall be commissioned within 60 months.
The power generated from the project will help in providing balancing of grid and improve the power supply position, it added.
To make the project viable, the government of the UT of Jammu and Kashmir will extend exemption from levy of water usage charges for 10 years after commissioning of the project, reimbursement of state's share of GST (SGST) and waiver of free power to the UT in a decremental manner.
That is, the free power to the Union Territory would be 1 per cent in the first year after commissioning of the project and rise at the rate of 1 per cent per year to 12 per cent in the 12th year, it added.
The construction activities of the project will result in direct and indirect employment to around 4,000 persons and will contribute to overall socio-economic development of the Union Territory.
Further, the Union Territory of Jammu and Kashmir will be getting free power worth Rs 5,289 crore and levy of water usage charges worth Rs 9,581 crore during the project life cycle of 40 years.