Independent power producer Velcan Energy has secured techno-economic clearance from the Indian Central Electricity Authority for the proposed 240MW Heo hydro electric project in the state of Arunachal Pradesh.

The approval validates the technical characteristics, costs estimates and tariffs of the $250m project.

With this go-ahead, Velcan will be able to commence negotiations with potential customers for power purchase agreement as well as seek financing from potential investors.

Planned to take 50 months to complete, the Heo facility is one of the three projects being developed on the Yarjep River with a combined capacity of 571MW. It is expected to generate 1,000 million units a year.

Velcan said that the project has a concession period of 40 years after it commences operations.

Velcan Energy co-CEOs Jean-Luc Rivoire and Antoine Decitre said: "This approval is an important milestone for Velcan in India.

"It endorses eight years of field investigations involving up to 100 workers on site, as well as thorough technical and economic analysis of the project conducted with the utmost degree of professionalism."