NHPC has received a loan of Rs 4,500 crore along with a government-funded lender and Rural Electricity for the revival of Scokim's Lanco Teesta project.
When it signed an agreement with a creditors committee on Friday, the state-owned water utility became the first PSU to take over financial assets through the National Corporate Fraud Framework (NCLT) process.
The company also expressed interest in Jal Power, another high-power power plant with 120 MW in Sikkim, said Balraj Joshi, chairman and managing director, NHPC.
NHPC will spend Rs 907 crore on the 500 MW Teesta project. Besides the NHPC, Sutlej Jal Vikas Nigam also applied for the project.
According to a summary of claims from the lender, 35 percent of the rent will be settled. This is also a special case where operational lenders receive similar claims from financial lenders. Financial lenders will get Rs 876.77 crore compared to Rs 2,499 crore in claims made. Another Rs 11 crore goes to loan operators and Rs 18 lakh to staff and staff.
The project will be carried out on an estimated project cost of Rs 5,748 crore including the amount charged. Thirty percent of this value, worth Rs 1,724 crore in July 2018, will be handled by equity NHPC, 100% owner of Lanco Teesta Hydropower Ltd. The remaining amount of Rs 4,024 crore will be debt.
The last takeover of the company will be on October 9th after the total amount is deposited and new shares are paid to NHPC. "We are not only adding 500 MW to our portfolio but we are the first PSU to take over an NCLT company," Joshi said.
The project, however, does not have a power purchase agreement after Lanco decided to cancel the sale of power in Maharashtra. The project was driven by price increases due to an earthquake in the region which sold power for Rs 2.3 a part (kilowatt hour) invisible. Since the PPA has provisions that allow termination of the contract if the project does not come in and the earthquake was a serious crisis event, Lanco can cancel the contract.
The NCLT allowed the sale to proceed and rejected a request by the Maharashtra government to suspend the process. Mahesh Kumar Mittal, director, investor, NHPC said "We are now looking at a rate of Rs 4.2 crore in the first year with 1-2 percent increase over 20 years."
The EPC contractor suspended the project in July 2017. Forty percent of civil works were discontinued.
Hyderabad NCLT Hyderabad approved NHPC's plan to resolve the issue on July 26, 2019. In early March 2019, the Council of Ministers of Economic Affairs approved a proposal for the Teesta project. The NHPC plans to complete the construction of the project within five years.