Agency: The tariff rate for the 1,020 MW Punatsangchu II project has not yet been finalized, and as a result, Bhutan and India have been unable to sign a Power Purchase Agreement (PPA) which in turn has meant that Bhutan has been unable to export its P II power to India.
According to sources, the tariff rate from India is taking some time as there is a proposal to reduce the loan payment time period and burden in Bhutan for the project. This, in turn, will help reduce the tariff rate.
The official loan repayment period is for 15 years starting two years after commissioning, but India is trying to increase this to 17 years so that the loan burden on Bhutan is reduced. This, in turn, helps reduce the tariff too.
Another thing being looked at is trying to make as much of the early payments, as the 30% grant instead of the 70% loan, so that the loan interest is less on Bhutan which again helps power the tariff rate.
However, such things have to go through a process like the technical negotiation team, the Ministry of Power and the Ministry of External Affairs and the final approval is required from the Indian Cabinet.
