The company will partner with Bhutan government to build and operate the run-of-the-river project. The project which is worth $201.5 million got financial closure through loans secured from Asian Development Bank, Austrian export credit agency, OeKB, and Druk Green Power Corp, the rest being equity participation.

“There are two units of 57mw each. It is in 2013 that the first unit will be commissioned. (And for completion of the whole project,) it’s about four years,” Tata Power’s executive director (strategy and business development), Banmali Agrawala.

A small share of the capital invesatment is used to award contracts for civil work and equipment.

“Major clearances (including environmental approvals) are in place. Contracts for civil work and equipment are in place as well. The design of the entire plant and all the soft part is over and work on the ground will start now,” Agrawala said.

Tata Power and the Bhutanese Government have signed a long-term power purchase agreement with Tata Power Trading Company Ltd to evacuate the electricity generated into India.

“The power would be brought to India because within Bhutan, the consumption of power is minimal so after fulfilling their local needs, all the power goes to India,” Agrawala said.

Bhutan Power Transmission has agreed to provide transmission access to Bhutan border, he added.

“There clearly is a lot of potential for hydro-power in Bhutan. We are definitely open to setting up more plants in Bhutan, but it clearly depends on the pace at which the government of Bhutan would want the private sector to come in,” Agrawala said.

The company is increasing its force on renewable energy and will invest from the INR236 billion announced for the next three-years.