NHPC Ltd has entered into a definitive agreement with lenders for the takeover of insolvent Lanco Teesta Hydro Power Ltd (LTHPL), which is implementing the 500 MW Teesta VI Hydropower project in Sikkim.
Under the terms of the agreement, signed on October 4, NHPC will be taking over 30 per cent equity in LTHPL and complete the power project being developed on Teesta river. The state-owned hydro power major has offered Rs 897.50 crore towards the resolution of LTHPL under the corporate insolvency resolution process.
NHPC already has operational projects upstream of the river and the addition of Teesta VI would give it almost full control of the river system in Sikkim. The company has been on the lookout for revivable hydro power projects facing insolvency proceedings as part of its plan to expand capacity.
NHPC has not got a project in the last 15 years. This is going to be the first project to commence construction after a gap of 15 years.
The LTHPL project will be implemented at an estimated project cost of Rs 5,748.04 crore (at July 2018 price level), which includes a bid amount of Rs 897.50 crore for acquisition. All creditors whose claims were admitted by the resolution professional will be getting 36 per cent of their claims on a pro-rata basis from the proceeds coming out of NHPC’s bid.
Earlier in March 2019, the Cabinet Committee on Economic Affairs (CCEA) had approved the proposal for the acquisition. Later in July, the National Company Law Tribunal’s (NCLT), Hyderabad bench approved the resolution plan of NHPC. LTHPL project will be completed in a period of five years.
“We tried to salvage the project and bid aggressively as there was an auction process. It is a a process which we have completed,” NHPC Ltd Chairman and Managing Director o Balraj Joshi said at an event to mark the signing of this definitive agreement.
Joshi also said that NHPC would be bidding for the 120 MW Jal Power Project, another asset under the Insolvency and Bankruptcy Code.
For the Teesta VI, banks have also agreed to relax the payment schedules so that the process does not come under stress again. The levelised tariff from this project is estimated to be Rs 4.07 per unit.