India has approved a Rs52.8billion ($724 million) investment for 850 megawatt (MW) Ratle hydropower project on Chenab river in Jammu and Kashmir.
A joint venture will be formed for this project by National Hydroelectric Power Corporation (NHPC), India’s largest organisation for hydropower development and Jammu & Kashmir State Power Development Corporation (JKSPDC).
The project will start its commercial operation within five years.
The Jammu and Kashmir state government will extend the water fee exemption period to 10 years after the project starts operating and repay the state's share of goods and services tax. The free electricity is granted by the state on a declining basis, 1% free electricity in the first year of operation and to increase 1% each year and to reach 12% in the 12th year.
The move comes against the backdrop of India's plans for hydropower projects in the union territory following restructuring.
The state of Jammu and Kashmir has estimated that it has 20 gigawatts (GW) of potential hydro power capacity, and that about 16GW of that has been identified, 20% of which has been exploited.
Energy expert John Yeap of Pinsent Masons, the firm behind Out-Law, said: “We are continuing to see good progress in commercialising non fossil-based energy resources across the Asian region. This hydro power project is a good example of the region’s focus on renewable energy. Hydro power can of course have its own environmental issues so careful planning will be required.”
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