Heo HEP Project is a run-of-the-river hydropower project in the State of Arunachal Pradesh, in Northeastern India.
With an Installed capacity of 240MW, it is the largest and most advanced in a cascade of three projects totaling 571 MW on the Yarjep River. Velcan has been developing the Heo Project since 2007. At the time, the installed capacity was expected to be approximately 70 MW. However, the abundance of water as well as Velcan’s proprietary engineering work over a number of years prompted the capacity to be revised to 240 MW.
Once built, the Heo project will generate a gross 1,000 million units per annum at a competitive price, based on Design Energy. The implementation budget for Heo HEP is of USD 250m for a construction period of 50 months after Financial Close. The concession period is set at 40 years after commissioning.
In July 2015, The Indian Central Electricity Authority issued the Techno-Economic Clearance for the Project. The Detailed Project report (DPR) approved by the CEA had been submitted in July 2013. All of its technical and economic features were examined by 19 separate directorates. The approval thus validates and sets the technical characteristics, the costs estimates and the tariffs of the forthcoming hydropower plant.
This clearance allows Velcan Energy to begin negotiations for a Power Purchase Agreement (PPA) with prospective clients and seek financing with various interested parties and banks. With energy sales, net of the State’s share, amounting to 861.47 million units (based on Design Energy) at a levelized price of 3.8 rupees, turnover will be USD 51m per annum at July 2015 exchange rates.
In April 2015, Indian Ministry of Environment, Forests and Climate Change has approved the Environmental Clearance the Heo Project (as well as for the Tato-I (186MW) and the Pauk (145MW) Projects).
This milestone was achieved after 7 years of diligent environmental studies and field work with the local population and stakeholders. The EIA (Environment Impact Assessment) and EMP (Environment Management Plan) studies were submitted in June 2014 following successful public hearings held between August and November 2013 for the 3 projects of the cascade. These involved more than five hundred people from villages nearby. Subsequently, the Expert Appraisal Committee (EAC), an independent, multidisciplinary body of experts, held appraisal meetings in July and August of 2014 and recommended that the Ministry grant the Final Environmental Clearance. The minor nature and small number of environmental issues raised during the committee meetings confirmed, on one hand, that the projects are environmentally friendly, whereas they will, on the other hand, have very significant positive social and economic impact on the region.
As per applicable regulations, the Environmental Clearances will be formally issued after Stage I Forest Clearances, which are currently under progress.