Hydropower: The 60MW Kurichhu hydropower project will be earning additional revenue of about Nu 115M annually starting next year as the project will be liquidating its loan by the end of this month.
Since the commissioning of all four units of the generator in 2002, the average annual earnings from the project to date was around Nu 535.5M.
While the actual loan amount was Nu 2.24B with an interest rate of 10.75 percent per annum for the 12 years term, by the end of this month, the project would have paid about Nu 4.66B as loan. The increase is because of the interest accrued during the construction and cost escalation.
The increase in project cost from Nu 3.13B to Nu 5.6B has caused the annual loan repayment to increase from what would have been Nu 217M to Nu 388M a year. The project’s debt servicing began in 2004.
However, because of establishment of energy intensive industries and hydropower construction activities in the east, power import through the Kurichhu system is expected to further increase.
Druk Green Power Corporation’s (DGPC) managing director, Dasho Chhewang Rinzin said DGPC would suffer an opportunity loss between Nu 40M and Nu 50M from Kurichhu, considering the import from India due to the additional consumption of power by Dungsam Cement Plant and new hydropower construction activities.
“Albeit the initial apprehensions, the Kurichhu project has not been a loss making venture for Bhutan,” he said.
Until September this year, the country imported about 109MU (million units) of energy. The same period in 2013 saw the country import only about 72MU of energy.
“Had the Kurichhu project not been constructed when it was, the power supply situation in eastern and central Bhutan could have been critical today,” Dasho Chhewang Rinzin said.
He said the project has been one of the most important projects for eastern and central Bhutan in uplifting the socio-economic conditions of over half the country with just 60 MW of capacity.
The government of India financed the project with 60 percent of the cost as grant and 40 percent loan.