Nikachhu run-of-river hydropower project
Client: State Bank of India
Location: Trongsa District / Bhutan
Date: Dec 2015 - Dec 2023
Providing Lender's Engineer services to support the success of a hydropower development in Bhutan
Background
Bhutan is a land-locked country. It is home to several hydropower projects with more in the pipeline, providing communities with access to sustainable energy, increased electrification, and a strengthened economy through power trading.
A 118 MW run-of-river development was proposed for the Nikachhu river in Bhutan’s Trongsa District to extend the country’s hydropower portfolio. The Nikachhu hydropower project is owned by Tangsibji Hydro Energy Limited, a subsidiary of Bhutan’s Druk Green Power Corporation. It consists of a 42 m high concrete gravity dam, gated spillways, pressure shaft, power intake and an underground powerhouse equipped with two 59 MW turbines.
Solution
Entura was engaged by the client to provide Lender’s Independent Engineer services for the Nikachhu hydropower project. In this role, Entura was responsible for conducting a due diligence review of the project’s technical aspects, including construction schedules, design, costs, risks, and contract documents. Entura also provided construction monitoring support to our client, the State Bank of India, to support disbursement of funds against work completed.
There were two phases to Entura’s engagement in the project, each contributing to its overall success. In the initial phase, Entura conducted a technical review, culminating in a report that scrutinised all pertinent facets of the project. This encompassed a critical review of all the existing reports, data, contract documents, technical specifications, owner’s requirements, project schedule as prepared by the Engineering, Procurement and Construction (EPC) contractor and the estimated project cost. Funding was then released by the client once the project was shown to satisfy lending requirements.
In the following phase, Entura evaluated the project’s physical progress on a quarterly basis, ensuring this aligned with expectations from all stakeholders.
Impacts of the COVID-19 pandemic led to a two-year delay in the commissioning timeline. Beyond the challenges posed by the pandemic, the project also faced setbacks due to geological uncertainties associated with the tunnel construction, further contributing to delays in project completion. Despite these challenges, obstacles were overcome to successfully bring the Nikachhu hydropower project to fruition.
Services provided
- due diligence
- Lender's Engineer
- construction monitoring support
Outcome
The reservoir was impounded in November, 2023, and the project has now been commissioned. The Nikachhu hydropower plant development will now supplement the power generation of the Mangdechhu hydropower plant during the offseason.
The power generated by the plant will also be sold to India, strengthening Bhutan’s economy and position as a key energy trader in South Asia.
