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India and Bhutan finalizes Mangdecchu hydro project’s power tariff protocol

Mangdechhu Hydroelectric Project

India and Bhutan has finally signed tariff protocol for the output of 720 MW Mangdechhu hydro project.

The Protocol was signed between both the countries on 23rd April, 2019 by Dasho Yeshi Wangdi, Secretary, Ministry of Economic Affairs, RGoB and Ajay Kumar Bhalla, Secretary, Ministry of Power, GoI.

Prior to this protocol finalization, basic tariff structure was agreed upon by Indian Prime Minister Narendra Modi and his Bhutanese counterpart Lotay Tshering in December last year.

First yield of this INR 4.5K crore Bhutan project is to get into India’s national power pool by May-June this year.

The Protocol in keeping with the Article 9.3 of the Inter-Governmental Agreement for Mangdechhu Hydroelectric Project formalizes the starting tariff of Nu. 4.12 per unit with tariff schedule for 35 years.

The tariff schedule, which is a part of Protocol mentions that the tariff will increase by 10% every 5 years till the loan is repaid and 5% thereafter.

The Protocol also appoints two designate agencies, DGPC from RGoB and PTC from GoI, for trading Mangdechhu Power through formalizing the Power Purchase Agreement.

During the signing, Tengye Lyonpo mentioned that the revenue from Mangdechhu power sale will be a key resource for funding the 12th FYP. He also commended the negotiation committees of both governments for the joint effort made for timely finalization of the mutually beneficial tariff to coincide with the final commissioning of the project.

The first unit is planned to be commissioned by 1st week of May 2019 and all the four units by mid-June 2019.

The signing was attended by senior government officials from both sides.

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