NHPC’s J&K Project Set to Receive ₹18,700 Crore Subordinated Debt

Key Takeaways

The power ministry is considering a ₹18,700 crore subordinated debt proposal for NHPC Ltd’s 1,856 MW Sawalkote hydroelectric project.
The proposal is still under consideration and requires approval from the expenditure finance committee.
The project aims to enhance hydropower development in Jammu and Kashmir amid India’s renewed focus on maximizing its hydropower potential.

Funding Potential for Hydroelectric Project

The Indian power ministry is currently evaluating a proposal to provide approximately ₹18,700 crore in subordinated debt at a low interest rate for the NHPC Ltd’s Sawalkote hydroelectric project, which has a capacity of 1,856 MW and is situated in Jammu and Kashmir. This funding initiative is in its exploratory phase and awaits further examination and approvals from the expenditure finance committee.

The Expert Appraisal Committee of the environment ministry previously assessed the Sawalkote project on September 26 of last year, indicating a total project cost of ₹31,380 crore. The proposed subordinated debt is intended to aid financing for this significant hydropower initiative.

Despite multiple inquiries, both the power ministry and NHPC Ltd did not provide responses before publication. The Sawalkote project represents one of the larger hydropower developments being undertaken by NHPC in the Jammu and Kashmir region.

India’s recent decision to suspend the Indus Waters Treaty (IWT) has precipitated a renewed emphasis on accelerating hydropower development in Jammu and Kashmir. This ensures effective utilization of hydropower resources, especially from the western rivers referenced within the treaty framework.

In January, Power Minister Manohar Lal conducted a review of NHPC’s hydroelectric projects within the union territory, which included site visits to the Sawalkote and Salal projects. Furthermore, the government has sanctioned several significant hydropower initiatives, notably in Arunachal Pradesh, over recent months. In April, approval was granted for the 1,200 MW Kalai-II project on the Lohit River, estimated at ₹14,105.83 crore, in addition to the 1,720 MW Kamala project costing around ₹26,069.50 crore.

These developments underscore India’s commitment to expanding its hydropower capacity, aligning with broader renewable energy goals and addressing energy demands in an environmentally sustainable manner. As the government continues to facilitate investment and support for hydropower projects, there is potential for significant growth in this sector, particularly in North India.

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