India’s Arunachal Pradesh State has granted four concessions to France-based Velcan Energy to develop hydropower projects totaling 304 MW on tributaries of the Siom River.
Velcan said July 17 the concessions are for construction and 40 years’ operation of the 50-MW Pauk, 90-MW Heo, 80-MW Tato 1, and 84-MW Hirit projects in West Siang District. All four are expected to be in operation by 2012.
The projects are expected to earn more than 91 million euros (US$125.6 million) in cumulative revenues annually. Arunachal Pradesh is to receive 12 percent of electricity produced at no cost.
Velcan said it intends to finance the projects through a combination of project finance and Islamic ï¿½sulukï¿½ finance from Dubai. Because Islam prohibits receiving interest, Islamic bonds, or suluk, are usually backed by physical assets that pay a profit instead of interest.
Velcan previously said it is seeking environmental and administrative approvals for construction of the two-plant, 50-MW Baitarani hydroelectric complex in India’s Orissa State. Its special purpose subsidiaries, Bhimkund Baitarani Power Projects Pvt. Ltd. and Tarini Hydro Energy Pvt. Ltd., received 30-year government concessions to develop the Baitarani 1 and 2 plants of 25 MW each. (HNN 7/9/07)
Velcan plans to concentrate on larger 50- to 100-MW sites to attain its objective of 1,000 MW of hydropower concessions in India. In April, it signed 30-year concessions to build three hydro plants in Brazil’s Santa Catarina and Minas Gerais states. (HNN 4/27/07)
Velcan said its strategy is to develop hydro projects in stable emerging countries having a high potential of undeveloped hydropower. It has two sources of revenue, power sales and sale of carbon credits.