The Teesta-VI is a half-complete run-of-the-river hydroelectric project located on the Teesta River, in Sikkim, India. The 500MW project was originally undertaken by Lanco Teesta Hydro Power, a subsidiary of Lanco Group, on build, own, operate, and transfer (BOOT) basis.
India’s state-owned National Hydroelectric Power Corporation (NHPC), which already operates the 510MW Teesta-V and currently developing the 520MW Teesta-IV project, will be the new owner and developer of the project.
NHPC became the successful bidder and has secured all approvals to take over the project, following insolvency and bankruptcy proceedings against the debt-laden Lanco Teesta Hydro Power.
The total investment on the project is estimated to be £638m ($837m), including the £100m ($131m) bid amount to acquire Lanco Teesta Hydro Power.
NHPC hopes to commission the Teesta-VI hydropower project in 2024. The plant is expected to generate up to 2,441 million units of electricity a year, upon completion.
Project background and financing
The Government of Sikkim appointed Lanco to build, own, and operate the project for a period of 35 years, in 2005.
Construction works were started in earnest in 2009 and the facility was scheduled for commissioning in May 2012.
It, however, suffered delays due to issues with funding, delayed forest clearance, as well as the earthquake of 2011, which resulted in the blockade of all logistics and ongoing site work.
The construction works were resumed in January 2014 and were 51% complete as of the beginning of 2018.
Lanco Teesta Hydro Power had secured debt financing for the project from a group of banks led by the ICICI Bank.
The ICICI Bank drew Lanco Teesta Hydro Power to India’s National Company Law Tribunal (NCLT) in 2018 after the latter failed to repay £35m ($46m) of loan despite the earlier invoked strategic debt restructuring (SDR) provision.
The NCLT started insolvency proceedings against Lanco in April 2018, and NHPC emerged as the successful bidder for the 500MW Teesta-VI project in December 2018.
The Government of India’s Cabinet Committee on Economic Affairs (CCEA) approved NHPC’s proposal to takeover the project in March 2019, while the NCLT granted approval for the acquisition under the corporate insolvency resolution process in July 2019.
Teesta-VI is the first power project in the country to be acquired by a state-run company under Insolvency and Bankruptcy Code (IBC).
NHPC will finance the project at a debt-equity ratio of 70:30.
Location and site details
The project is being developed on the Teesta River, in the Sirwani village in southern Sikkim. The site can be accessed via National Highway (NH) -31A, while the nearest railhead is located at New Jalpai Guri (NJP), roughly 85km away from the project site.
Teesta-VI hydroelectric plant make-up
The Teesta-VI project comprises a barrage with five 15m-wide and 18m-high gates, a reservoir with 1.38 million cubic meters (Mcm) of live storage capacity, four water intake structures, four desilting basins, two 13.75km-long and 9.8m-diameter horseshoe-shaped headrace tunnels, four 8.5m-diameter D-shaped tailrace tunnels, and an underground powerhouse.
The underground powerhouse measures 42.75m-long, 18.5m-wide and 50m-high. It will be equipped with four vertically-mounted Francis turbines of 125MW capacity each.
Power transmission and off-take
The electricity generated from Teesta-VI will be evacuated through a dedicated 220kV DC transmission line connecting the Power Grid Corporation of India’s (PGCIL) substation at Rangpo, which is located approximately 12.5km away from the plant site.
Sikkim will receive 12% of free power from the project as royalty in the first 15 years after commissioning and 15% from 16th to 35th year of the project’s operations.
ÅF Consult (now ÅF Pöyry) was engaged by Lanco to review the detailed project report (DPR) and to provide tendering support as well as engineering and design services for the project.
Hindustan Construction was contracted for civil construction works for the Teesta-VI project in 2008.