The Empowered Institution (EI) chaired by the Department of Economic Affairs secretary has recommended Mizoram government’s proposal of 210 MW Tuivai hydroelectric project for viability gap funding (VGF). The EI has recommended the proposal to the Empowered Committee for grant of in-principle approval to the project for Rs. 1700 crore with VGF of Rs.340 crore, which is 20 percent of the total project cost.
The Empowered Institution, however, has subjected the recommendation to certain conditions which includes confirmation of the Mizoram government that 90 percent of land is available. Further, the power ministry should facilitate the state government to obtain confirmation from CEA or CERC that fixed unitary charges during the concession period are in line with extant policy. All project documents should be vetted by the CEA and the state government shall obtain clearances such as environment and forest clearance before commencing work on the project site.
The State Government proposes to develop the Tuivai Hydro Electric Project on a tributary of River Barak on PPP mode. The project includes construction of three units of 70-mw each. The government informed the EI that it is the first project of its kind in the North Eastern States of the country as well as the first hydro electric project seeking VGF under the Scheme. The Joint Electricity Regulatory Commission for Manipur and Mizoram has fixed the tariff of Rs. 3.55 per unit assuming VGF for the project amounting to 20 percent of the total project cost. This tariff will remain as a fixed charge throughout the concession period of 35 years.
EI noted that Mizoram, a special category State, has been unable to successfully have this project implemented either through the NTPC or as a purely private sector initiatives it has had several rounds of bidding and there is limited interest by the private sector. Given the need for early implementation and the special conditions in the state, the project can, in principle, be considered as an exception to the policy for full private initiatives in generation schemes.
During the EI meeting to consider the project, Planning Commission officials indicated that since the power ministry has confirmed that the project is admissible for VGF support in accordance with the Electricity Act, 2003 and the Tariff Policy amendment of 2008, they have no objection to the project.