Union Cabinet approves construction of Kwar Hydro Electric project

Project expected to generate 1975 million units of electricity

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New Delhi, Apr 27: The Cabinet Committee on Economic Affairs chaired by the Prime Minister, Narendra Modi, Wednesday has approved the investment of Rs.4526.12 crore for 540 Megawatt (MW) Kwar Hydro Electric Project located on river Chenab, in Kishtwar district of Union Territory of Jammy and Kashmir. The project will be implemented by M/s. Chenab Valley Power Projects Private Limited (M/s. CVPPL) a joint venture company between NHPC and JKSPDC with equity contribution of 51% and 49% respectively on 27.04.2022.
The project shall generate 1975.54 million units in a 90% dependable year.
Government of India is extending grant of Rs.69.80 crore towards cost of Enabling Infrastructure and also supporting the Union Territory of Jammu & Kashmir by providing grant of Rs.655.08 crore for Equity contribution of JKSPDC (49%) in M/s. CVPPPL. NHPC shall invest its equity (51%) of Rs.681.82 crore from its internal resources. The Kwar Hydro Electric Project shall be commissioned with a span of 54 months. The Power generated from the Project will help in balancing of Grid and will improve the power supply position.
Government of UT of J&K to make the Project viable, extending exemption from levy of Water Usage Charges for 10 years after commissioning of the project, reimbursement of State’s share of GST (i.e. SGST) and waiver of free power @2% per year in a decremental manner, i.e. the free power to the Union Territory of Jammu & Kashmir would be 2% in the 1st year after commissioning of Project and thereafter shall increase @2% per year and shall be 12% from 6th year onwards.
The construction activities of the Project will result in direct and indirect employment to around 2500 persons and will contribute in overall socio-economic development of the Union Territory of J&K. Further, UT of J&K will be benefitted of Jammu & Kashmir with free power of around Rs.4,548.59 crore and Rs.4,941.46 crore with Water Usage Charges from Kwar Hydro Electric Project, during project life cycle of 40 years.