By IANS
New Delhi : India's proposed agreement with Bhutan for a 1,095-megawatt hydropower project in the Himayalan kingdom and a transmission network to bring electricity to the border has received a formal approval.
A cabinet meeting chaired by Prime Minister Manmohan Singh here Friday approved the Rs.35.14 billion Punatsangchhu-I Hydropower Project for which 40 percent of the cost will be in the form of grant from India and the remaining as a loan.
"The loan will carry an interest rate of 10 percent per annum and will be repaid in 12 equal annual instalments – the first commencing a year after the date of commercial operation," Information and Broadcasting Minister Priya Ranjan Dasmunsi told reporters here.
He said External Affairs Minister Pranab Mukherjee will visit Bhutan to finalise the finer contours of the project, although no date had been fixed yet.
The project will provide surplus power to India and augment power availability in the country. It will also contribute to the strategic objective of further integrating the economy of Bhutan with India's, Dasmunsi added.