གནས་ཚུལ།

His Holiness the Je Khenpo graced KHP dam site and powerhouse on February 15, 2023. His Holiness offered thugmoen (well-wishes) for the smooth functioning of the powerplant.

Kuensel | Dechen Dolkar | February 7, 2023

Druk Green Power Corporation (DGPC) has asked for a loan from the Power Finance Corporation (PFC), Rural Electrification Corporation (REC), and other financial institutions of India to finance 600MW Kholongchhu Hydro Energy Limited (KHEL).

Nu 4.5B was spent on the project so far. The project’s total cost is estimated at Nu 54.4B at the 2020 price level.

The first joint-venture hydropower company, KHEL, is now dropped.

During the “extraordinary meeting” between DGPC and Satluj Jal Vidyut Nigam Limited (SJVNL) decided that SJVN would transfer their 50 percent shareholding in the joint venture company to DGPC.

The transfer of the 50 percent shareholding of SJVN to DGPC was completed within January 2023.

The Managing Director of DGPC, Dasho Chhewang Rinzin, said that DGPC is now the 100 percent shareholder of the company, having completed the required shares transfer and other processes through the Registrar of Companies.

“DGPC has assumed full ownership of the KHEL on an as-is-where-is basis,” the MD said.

The erstwhile joint-venture company was in negotiations for debt-financing with the Power Finance Corporation (PFC) and the Rural Electrification Corporation (REC) of India, who are financing major power projects in India.

The MD said that DGPC has already approached PFC and REC through the Government of India to consult on continuing the same support to DGPC in providing the debt-financing for the project.

“Since this is commercial borrowing, the loan amount, including interest is expected to be around Nu 45B to Nu 50B,” Dasho Chhewang Rinzin said.

However, DGPC will have to mobilise additional funds for equity-financing.

MD said that the equity-financing is estimated at Nu 16B. However, he said that the figures could change depending on how soon the project can be started, and when it gets commissioned, the figures could change.

After the joint-venture model was dropped, the shareholders agreed to stop the construction works to cut down on expenditure.

Dasho Chhewang Rinzin mentioned that DGPC is already working with the contractors who were undertaking infrastructure works at the project site and restarting and completing it at the earliest.

Dasho Chhewang Rinzin said, “This will enable the local communities to use some of these infrastructures, especially the roads and bridges and access to water and electricity supply.”

“With the commitment and support of the two governments, DGPC is optimistic to get the project back on track and complete it at the earliest.” Dasho added.

Kuensel | Dechen Dolkar | February 3, 2023

With 87.75 percent of the project completed, the 118MW Nikachhu Hydropower Project in Trongsa is expected to commission by December this year.

The project has completed 89 percent of the headworks components which include the dam, power intake structure, main feeder tunnel, and desilting chamber complex works.

Similarly, the progress of the Head Race Tunnel (HRT) construction stands at 88.54 percent, 88.84 percent for the powerhouse complex, 66.20 percent for hydro-mechanical and 90.52 percent for the electromechanical works.

The construction of transmission lines (132kV Double Circuit Line of 18.6km) is almost complete (99.8 percent).

Project management officials said that the most critical component in the completion of the project is HRT Face 6 and Face 7.

“After going through various challenges on adverse geological conditions with heavy ingress of water, the excavation breakthrough between Face 6 and Face 7 happened on December 14, last year,” an official said.

However, the management said that the uncertainties associated with excavation have now been eliminated with the breakthrough between Face 6 and Face 7 of HRT.

The project management also said that because of the very poor geology,  the project also faced challenges in the dam excavation where they “literally had to change the methodology of excavation”.

The management said that the adversity of harsh weather conditions also hampered the work progress, where foreign workers enrolled with the contractor left the site to avoid cold weather.

The project also faced challenges for the pressure shaft excavation where they encountered extremely poor geology or shear zone both in upper and lower limb pilot hole excavation.

“Despite the restriction and supply of raw materials being interrupted during the Covid-19 pandemic, the contractor was forthcoming and put in extra effort to ensure that works at critical fronts were not interrupted,” the official said.

The project missed two deadlines so far. Of the initial estimated cost of Nu 11.89B, around Nu 12B has been spent. “The cost of the project is likely to increase to Nu 13B,” the project official said.

The tariff as per Power Purchase Agreement with Power Trading Company India Ltd is Nu 3.30/kWh.

A knowledge exchange meeting of power executives from Bangladesh, Bhutan, India and Nepal was held in Paro, Bhutan, on February 3, 2023. The event was organised by DGPC in collaboration and support from the World Bank.

Representative from the Nepal Energy Authority, World Bank Group, Ministry of Energy and Natural Resources, Bhutan Power Corporation Limited, and Druk Hydro Energy Limited, along with DGPC executives attended the event. Members from the Power Grid Company of Bangladesh and the Indian Energy Exchange attended the meeting virtually.

Delegates also visited Basochhu hydropower plant the following day.

Business Bhutan | Sherab Dorji | February 1, 2023

The hydro-power debt stood at Nu 164.4bn in December and Nu 162.8bn in September last year

As of December 2022, Bhutan’s external hydro power debt has increased compared to that of September, 2022. The debt stood at Nu 164.4bn constituting 69.2% of the total external debt and 80.1% of the Fiscal Year (FY) 2022-23 Gross Domestic Product (GDP) estimate. The hydro debt comprises the debt stock of six hydro-power projects, namely Mangduechu Hydro Power Authority (MHPA), Punatsangchu-I, Punatsangchu-II, Nikachu, Dagachu, and Baoschu.

This is an increase by almost Nu 1.6bn within a quarter. In September 2022,  the external hydro-power debt stood at Nu 162.8bn constituting 78.9% of the FY 2022-2023 GDP estimate.

Moreover, hydro-power with 69.2% stands as the highest external debt by sectoral composition, followed by policy and budget with 17.5% and central bank, urban and rural electrification with 2.95 %, 2.3% and 1.6% respectively, amongst others.

According to the Ministry of Finance (MoF), the external debt by the sectoral composition is mainly contracted for financing hydro-power projects in the country, budgetary support from the World Bank, Asian Development Bank (ADB) and Japan International Cooperation Agency (JICA).

The Ministry further stated that other external debt was on account of debt contracted and includes borrowing for financing infrastructure development, such as rural electrification, agriculture, road connectivity, trade infrastructure, and urban development. “It also includes borrowing for education and health sectors under the social category,” the Ministry stated.

However, the non-hydro debt stood at Nu. 73.2bon constituting 30.8% of total external debt and 35.7% of estimated GDP.

The report from the Ministry states that the Public Debt Policy 2016 requires the non-hydro debt stock to be within 35% of GDP during a five-year plan period.

The average non-hydro debt ratio to GDP for the past four years including the last quarter of 2022 of the current FYP is 31.4% and is, therefore, within the threshold, according to the report.

The MoF report also states that the external debt by the contracting agencies includes government’s debt, corporate debt and central bank debt, the hydro-power sector constitutes the major portion of the external debt at 73.2%.

The corporate debt stood at 5.2% followed by central bank debt at 2.9% as of 31stDecember last year.

For instance, the government debt of about Nu 218bn accounts for 91.9% of the total external debt, which includes borrowings for budgetary activities, hydro-power projects and loans availed by the government and on-lent to public corporations.

Similarly, corporate debt pertains to borrowings directly contracted by public corporations and amounts to about Nu 12bn and accounts for 5.2% of the total external debt followed by standby Credit Facility with the Government of India, which makes up 2.9% of the total external debt and the Central Bank’s debt.

Meanwhile, in the three months from October to December last year, the total public debt stock has increased to Nu 7.8bn. This is because of the external debt of 8.2bn, though there was a decrease of domestic debt of about Nu 0.361bn.

However, the public debt stood at Nu 264.8bn as of December end last year from the total public debt of Nu 256.9bn at the end of September for the same year.

As for the external and domestic debt, the debt stood at Nu 237.6bn and Nu 27.2bn as of December end last year from the total external and domestic debt of Nu 229.4bn and Nu 27.5bn in September end last year.

France Televisions | A.Forget, G. Baslé, N. Sinchuri | January 30, 2023

Bhutan is an example to follow in terms of CO2 emissions since the country claims to have a negative carbon balance.

Bhutan is a mountainous country in the Himalayan range between China and India. Only 750,000 inhabitants in the country, but a real benchmark in terms of CO2 emissions, since it ensures more than it emits. The country’s very important forests, which cover 70% of the territory, allow it to display such a good carbon balance.” These trees are a source of life, they absorb pollution like carbon and release oxygen”, describes Pobjikha Tsogpa, forest ranger.

Measures taken to limit emissions

Although the carbon balance is due to forests, measures have been taken to limit emissions. So all of the electricity comes from hydraulics. The carbon balance is certainly negative, but with a population which is increasing and which is getting richer, emissions are increasing as in the capital, where the number of vehicles has increased sharply in recent years. The government therefore wants to convert cars to electricity. For this, subsidies are given to drivers. In the countryside, too, this ecological aspect is important.

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The inaugural blast at the adit to lower horizontal pressure tunnel for Burgangchhu hydropower project was held on January 16, 2023. Dasho MD along with Zhemgang dzongkhag officials and Buli community representatives attended the event. On the side-line, the preparation of outlet portal, intake structure and powerhouse are ongoing.

Kuensel | Dechen Dolkar | December 28, 2022

The 720MW Mangdechhu Hydroelectric Project Authority (MHPA) officially handed over the project to Druk Green Power Corporation (DGPC) yesterday.

The contract award cost was Nu 37.1B and the cost incurred until July this year was Nu 50.2B. The project required an additional fund of Nu 800M for the payment of liabilities.

The commissioning of the project has increased Bhutan’s electrical power generation capacity by 44 percent to 2,326MW. Since its commissioning, the project has generated more than 9,500 million units of energy.

In 2021, MHPA exported electricity worth Rs 12.13B to India, increasing Bhutan’s electricity exports to Rs 24.43B.

So far, it earned Nu 43.6B as revenue after the commissioning of the project. The project has generated around 10,599.9 million units of energy as of yesterday.

Speaking at the event, Economic Affairs Minister Loknath Sharma said that the project is yet another milestone.

He said that during the pandemic when the revenue fell, the commissioning of the project helped the country with its revenue.

The commissioning of project increased hydropower revenue in 2020 31 percent.

Lyonpo expressed his gratitude to all the officials, engineers, designers, and workers for delivering the project. He also thanked the Government of India for providing financial and technical support for the construction of the project.

Ambassador Sudhakar Dalela said that the project was a ‘benchmark project’ which was completed at an optimal cost and time frame.

The power generated by the Mangdechhu Power Station is being exported to India and the evacuation of power is takes place at Alipurduar in West Bengal. The power flows through the 765kV Double Circuit HVDC transmission line running from Bishwanath Charali in Assam to Agra in UP, where the eastern grid is connects the western India grid.

The Mangdechhu Hydropower Station exported net energy at Alipurduar 9165.685 million units and the corresponding billing amount to Power Trading Corporation (PTC) for the exported energy is Nu 37.1B. The billing to PTC has been done for the period of three years until August 2022 from the date of commissioning.

The tariff of the Mangdechhu Project is Nu 4.12 per kWh.

According to officials from the Department of Hydropower and Power Systems, it is projected to earn revenue of Nu 12B from the project annually. They said that of the total revenue earned around Nu 8.5B will be given to the government exchequer and around Nu 5B will be  repaying the loan for 17 years. In total, there is around Nu 47B loan.

Every five-year tariff will be increased by 10 percent. After completing the repayment of the loan, the tariff will be increased by 5 percent every five years.

A handing-over ceremony was held in Thimphu and witnessed by Lyonpo Loknath Sharma and Ambassador Sudhakar Dalela.

A handing-over document was signed between the managing directors of MHPA and DGPC.

Four units of Mangdechhu Hydropower Station were commissioned between June 28, 2019 to August 16, 2019. The project was inaugurated by the Prime Minister of India Narendra Modi and the Prime Minister of Bhutan Lotay Tshering on August 17, 2019.

The project was awarded the prestigious Brunel Medal, 2020 by the Institute of Civil Engineers, London as a recognition for its excellence in civil engineering and the project’s social and environmental credentials.

The project will reduce about 2.4 million tonnes of Green House Gas emissions each year.

With the handing over of this project, both India and Bhutan have successfully completed four mega hydroelectric power projects, taking forward our six decades-old hydropower cooperation.

LinkedIn | South Asia Regional Energy Partnership | December 25, 2022

The Executive Exchange to India on Cross Border Electricity Trade (CBET) and Technology Enablement organized for Royal Government Bhutan by USAID’s SAREP program came to an end on December 24, 2022.

The meetings and discussions during the exchange program helped enhance understanding of Bhutanese stakeholders on power markets, regulations on cross border power trade, energy trade operations and technologies to support market participation. This will help enhance power trade and improve efficiencies of operating in power exchange.

The delegation comprising of representatives from Bhutan Electricity Authority, Bhutan Power Corporation, Bhutan Power System Operator, Druk Green Power Corporation Limited, and Department of Energy of Ministry of Economic Affairs, Royal Government of Bhutan were in India from Dec 18-24, 2022.

We would like to thank Eastern Regional Power Committee (ERPC), the Grid Controller of India Limited, CESC Limited, Tata Power-DDL , and Indian Energy Exchange (IEX) for hosting the exchange team at their facilities in Kolkata and Delhi. We would also like to thank Central Electricity Regulatory Commission (CERC), BSES Delhi and TATA Power for taking the time to interact with the Bhutanese delegation as a part of a workshop.

Such collaborations and exchanges among energy sector stakeholders in #SouthAsia will promote #ElectricityTrade, support an integrated grid and a robust #SouthAsianPowerMarket.

The Settlement Nodal Agency (SNA) Agreement was signed between DGPC and NTPC Vidyut Vyapar Nigam Limited (NVVN), India, on December 13, 2022, in Thimphu. Niteen Subhash Yeola, Deputy Chief of Mission, Embassy of India, and Karma Tshering, Secretary, Ministry of Economic Affairs, along with senior officials were present during the signing.

As per the “Guidelines for Import/Export (Cross Border) of Electricity 2018” issued by Ministry of Power, Government of India (GoI), the Central Electricity Regulatory Commission had issued the “Cross Border Trade of Electricity Regulations, 2019”.  The regulation requires settlement of grid operation related charges to be settled through SNA. GoI have designated NVVN as the SNA for Bhutan while the Royal Government of Bhutan have designated DGPC to sign the SNA Agreement with NVVN.