India and Bhutan inks pact to step up hydro power cooperation

New Delhi, July 28 (UNI) India and Bhutan have signed two agreements aimed at ensuring energy security of the country through import of 5000 MW of electricity from Bhutan by year 2020 and development of hydro power projects jointly.

The agreements were signed by Union Power Minister Sushilkumar Shinde and Bhutanese Minister for Trade and Industry Lyonpo Yeshey Zimba in the presence of the Crown Prince of Bhutan Trongsa Penlop Jigme Khesar Namgyel Wangchuck at a ceremony here.

Under the agreement on long-erm cooperation in the field of Hydropower, both the countries agreed to facilitate, encourage and promote the development and construction of hydro power projects and associated transmission systems as well as trade in electricity, through both public and private sector participation.

It was also decided 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 will 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, an official spokesman said.

For construction and operation of hydro projects in Bhutan by public sector and government owned agencies, India shall facilitate availing of facilities including finance from financial institutions in India and deployment of human resources as required by Bhutan.

India also agreed to a minimum import of 5,000 MW of electricity from Bhutan by 2020 as 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.

Under the second agreement, namely, the Protocol to the Agreement on purchase of Power and Tariff of the prestigious Tala Hydroelectric Project (1020 MW), which is valid for 35 years, it was agreed that the first year tariff will be Rs 1.80 per unit. A mechanism for subsequent review of the tariff was also agreed upon.

The first unit of the project is to be commissioned soon.

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