Prime Minister Narendra Modi-chaired Cabinet Committee on Economic Affairs (CCEA) on Wednesday cleared an investment of Rs 4526.12 crore for the 540 Megawatt (MW) Kwar Hydro Electric Project located on river Chenab, in the Kishtwar district of Jammu and Kashmir.The project will be implemented by Chenab Valley Power Projects Private Limited (CVPPL), a joint venture company between NHPC and JKSPDC, with an equity contribution of 51% and 49% respectively on April 27, 2022, said CCEA in a statement. Once operational, the project shall generate 1975.54 million units in a 90% dependable year, it further added.

CCEA statement further added that the central government is extending a grant of Rs 69.80 crore towards the cost of enabling infrastructure and also supporting Jammu & Kashmir by providing a grant of Rs 655.08 crore for an equity contribution of JKSPDC (49%) in CVPPPL. NHPC shall invest its equity (51%) of Rs 681.82 crore from its internal resources. The Kwar Hydro Electric Project shall be commissioned within a span of 54 months. The power generated from the project will help in balancing of the grid and will improve the power supply position.

The government of UT of J&K will make the project viable by extending exemption from levy of Water Usage Charges for 10 years after commissioning of the project; reimbursement of state’s share of GST (SGST) and waiver of free power at 2% per year in a decremental manner. This means that free power to the Union Territory of Jammu & Kashmir would be 2% in the 1st year after commissioning of the project and thereafter shall increase at 2% per year and shall be 12% from 6th year onwards.