Funding issues remain unresolved for Jammu & Kashmir State Power Development Corporation’s 450 MW Baglihar hydroelectric project phase-II. State government has taken up with Planning Commission for grant of Rs 1000 crore for the project to enable reduction in power tariff from the project from currently estimated Rs. 4.48 per KW to Rs. 2.99 per KW.
After several deliberations, Planning Commission has suggested the State government to propose Rs.1000 crore grant as a part of Special Plan Assistance. State government has indicated that the funds under Special Plan Assistance are limited and reiterated its request for a special dispensation on lines of Prime Minister’s Reconstruction Plan.
Estimated at a cost of Rs. 2113 crore, Planning Commission had earlier indicated that source of funds for the project may be identified by the State government through State’s own resources such as sale of power, borrowing and loan, after which the amount of grant from the Central government can be considered.
The Planning Commission had stated that another option is sale of equity share. It also pointed out that the entire power will go to the State.
Hence, it is in the interest of the State government to consider all possible options. However, the State government has not identified any funds from its own resources and is insisting on the grant from the Central government.
The Central government had also supported the phase-I of the Baglihar hydroelectric project, along with several other projects in the State.
Baglihar-II hydroelectric power project is a run-of-the-river scheme planned on River Chenab. The project envisages three units of 150 MW each.
The project has been approved by Central Electricity Authority in December 2010.