NHPC Limited has signed a definitive agreement for implementation of the approved resolution plan for takeover of Lanco Teesta Hydro Power Limited. Under the agreement signed on Friday, NHPC will be taking over 30 per cent equity in Lanco Teesta Hydro Power Limited, and complete the 500 MW Teesta VI Hydropower project on Teesta river in Sikkim. The remaining equity will be held by the banks and the company will become a subsidiary of NHPC Limited.

NHPC has become the first public sector undertaking to bag a project under the Insolvency and Bankruptcy Code and was awarded the project after a bid of ₹ 897.50 crore. The total project cost is estimated at ₹ 5,748.04 crore (at July 2018 price level). All creditors whose claims were admitted by the resolution professional will be getting 36 per cent of their claims on a pro-rata basis from the proceeds coming out of NHPC’s bid.

“NHPC has not got a project in the last 15 years. This is going to be the first project to commence construction after a gap of 15 years,” Joint Secretary, Ministry of Power, Aniruddha Kumar said.

“We tried to salvage the project and in a bid to do that because there was a bidding, so we had to give slightly more above than we could have...but this is a process which we have completed,” Chairman and Managing Director at NHPC Limited, Balraj Joshi said at an event to mark the signing of this definitive agreement.

Joshi also said that NHPC would be bidding for the 120 MW Jal Power Project, another asset under the Insolvency and Bankruptcy Code.

NHPC will be infusing around ₹ 800 crore more capital in Lanco Teesta Hydro Power Limited to attain the 30 per cent shareholding of the company. Banks have also agreed to relax the payment schedules to aid the resolution of this project and the levelised tariff from this project is estimated to be ₹ 4.07 per unit.