AFD signs Credit Facility Agreement for two hydroelectric power plants
French Development Agency (AFD) signs 80-million-euro Credit Facility Agreement with the Government of India for the development of two hydroelectric power plants in Himachal Pradesh by Himachal Pradesh Power Corporation Limited (HPPCL)
New Delhi, 4 July 2017
The Government of India, represented by Mr. Selvakumar, Joint Secretary - Department of Economic Affairs (DEA), Ministry of Finance, and the French Development Agency (AFD), represented by Mr. Hervé Dubreuil, Deputy Director of AFD in India, today signed a Credit Facility Agreement of 80 million euros for the development of hydroelectric power in Himachal Pradesh.
A program to expand Himachal Pradesh’s clean energy capacities and meet the strong growth anticipated in electricity demand.
The program will finance two run-of-river hydroelectric plants, namely Deothal Chanju HEP (30 MW) and Chanju III HEP (48 MW) situated in the Chanju river basin. The project aims to provide a capacity of 78MW of renewable energy, which will generate 280 GWh of electricity per year and reduce 276 000 tCO2eq in annual greenhouse gas emissions.
The headrace tunnels for these two plants will be entirely underground, keeping their environmental impact to a minimum. The construction of these plants will not involve any displacement or resettlement of population, thus reducing the potential negative social impacts of the project.
The project will be developed by the Himachal Pradesh Power Corporation Limited (HPPCL), which has been allotted hydroelectric projects aggregating to 3111 MW and has a target of installing 934 MW of new hydropower capacity in Himachal Pradesh by 2022. The Government of Himachal Pradesh is bringing 20% equity to the project.
Based on France’s advanced know-how and extensive experience in the hydropower sector, this financing is combined with a technical assistance program for optimizing the operational and financial management of HPPCL’s hydroelectric power plant portfolio.
Consultants will organize the capacity-building program through several training sessions and long-term follow-ups. A study tour was organized in France in June 2017 for HPPCL seven employees to share French and international best practices in operation, maintenance and optimization of power production.
The Indian government has committed to an ambitious target of developing alternative energy, which will account for 40% of its energy mix by 2030.
Given its specific mandate in India - towards a green and inclusive growth - AFD is backing the development of renewable energy and increased energy efficiency in the country.
Through this financing and technical assistance program, which extends the agency’s operations in the sector of green energy in India, AFD continues to support the Indian Government in its commitments to combat climate change and meet the growing energy demand by developing non-conventional energy sources.
AFD also partners with the Indian Renewable Energy Development Agency (IREDA) through financial and technical support for small-scale hydro, solar, wind and biomass projects led by private developers.
AFD, a public financial institution that implements the policy defined by the French Government, works to combat poverty and promote sustainable development. AFD operates on four continents via a network of 75 offices, and finances and supports projects that improve living conditions for people, boost economic growth and protect the planet. In 2016, AFD earmarked 9.4bn euros to finance projects in developing countries and for overseas France.
HPPCL was incorporated in December 2006 under the Companies Act 1956, with the objective to plan, promote and organize the development of all aspects of hydroelectric power on behalf of Himachal Pradesh State Government (GoHP) and Himachal Pradesh State Electricity Board Limited (HPSEBL) in Himachal Pradesh. As on 31.03.2017, the GoHP has a 21.13 %, HPSEBL a 7.83 % and HP Infrastructure Development Board(HPIDB) a 71.04 %, shareholding in HPPCL.