Work on Bhutan’s 600-MW Kholongchhu hydro project likely to start in April

Work to develop the 600-MW Kholongchhu Hydro Electric Project Ltd (KHEL) in Bhutan is likely to commence in April, Druk Green Power Corporation Limited said.

Civil and hydro mechanical works — like construction of the dam, headrace tunnel and powerhouse – have been awarded to two companies. An Indian company, Jaiprakash Associates Limited (popularly known as Jaypee Group), was awarded construction of the 95-m dam and its complex at the cost of BTN9.72 billion (US$133.7 million) and construction of powerhouse and its components at the cost of BTN6.21 billion (US$85.4 million).

A joint venture of a Mumbai-based private company, Valecha Engineering Private Ltd, and Rigsar Construction was awarded the contract to construct the headrace tunnel, worth BTN4.346 billion (US$59.8 million).

The contractors have three months to mobilize materials and labor to begin the work.

According to a project official, Construction Development Corporation Limited (CDCL) and other Bhutanese contractors would also execute some portion of the main work.

Joint Managing Director Kencho Dorji said Kholongchhu is a run-of-river project with a stream diversion arrangement at about 4 km downstream of the dam to utilize the Jablangchhu stream.

“The stream will be diverted into the headrace tunnel for additional power generation during the lean flow period. This for a high head plant would translate to about 26 to 33 MW,” he said.

KHEL is the first ever joint venture hydropower project in Bhutan and is formed between DGPC and India’s SJVN.

Dorji said that contractors should recruit Bhutanese to the extent possible. “At present, foreign labourers, as are all inward travellers, have to stay 21 days in quarantine and so almost 30 days are spent outside work sites,” he said. “I expect once the post-covid normalcy sets in, restrictions ease, we may truly say the problem is over.”

The project is expected to be complete by November 2025 and generate about 2,568.88 million units annually. The sale of power will follow two routes, 30% of the net energy on the power exchange and the remaining 70% through long-term power purchase agreement.

The project is being financed through a debt-equity ratio of 70:30, with 50-50 equity holdings between DGPC and SJVN.

Indian Prime Minister Narendra Modi laid the foundation stone for the project during his visit to Bhutan on June 16, 2014. His Royal Highness the Gyaltshab, Prince Jigme Dorji Wangchuck, graced the ground-breaking ceremony on Sept. 18, 2015.

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