2011
It all started on Bhadra 30, 2069 when PPCL signed a Power Purchase Agreement (PPA) for its Hewa Khola A Hydroelectric Project. Back then, the installed capacity was set at 12.9 MW, but this was later bumped up to 14.9 MW on a later date. The agreed PPA rates were Rs. 8.4 per unit for dry months and Rs. 4.8 per unit for wet months, with 3% annual escalation available for up to 8 years, depending on the commercial operation date.
2017
The Hewa Khola project faced its first major delay. Initially, the required commercial operation date (RCOD) was set for 2014. However, the plant only began operations on February 4, 2017. Because of this delay, the escalation period for rates was reduced to 5 years.
From the start, the project struggled with a very low contracted energy of just 62%. Things got worse when the promised 132kV Kabeli corridor transmission line wasn’t ready in time. As a result, the plant had to rely on an overloaded alternative, the 33kV Phidim-Tilkini line, to evacuate power. This severely limited PPCL’s capacity. In fact, it could only generate 50% of its contracted output due to these constraints.
2020
Finally, some good news came with the completion of the Kabeli corridor transmission line at the start of FY2019/20. With this infrastructure in place, PPCL’s generation capacity jumped to 86% of its contracted energy in FY19/20.
But the relief was short-lived. Occasional equipment repairs and hydrology fluctuations brought capacity down to 67% in FY2020/21. Even with these challenges, the dream of consistent and hassle-free generation seemed within reach.
2023
Disaster struck on June 17, 2023, when a sudden surge in the Hewa River destroyed PPCL’s structures. The damage was catastrophic, completely halting energy generation. While insurance claims were initiated, the payouts couldn’t fully cover the reconstruction costs.
Here’s how the insurance payouts looked:
• Property insurance: Rs. 15 crores (paid)
• Income insurance: Rs. 16.89 crores (paid)
• Income insurance (pending): To be disbursed when the plant resumes operations.
2024
Just as reconstruction efforts were gaining momentum—funded by insurance payouts and additional loans—tragedy struck again. On September 27, 2024, a second massive flood wreaked havoc, causing an additional Rs. 55 crores in estimated losses.
PPCL, still unable to resume electricity generation, now faces mounting financial pressures, with rising loan and interest obligations adding to its woes.
The Challenges So Far
• Delayed commercial operations of the project.
• Delayed completion of the proposed transmission line.
• Lower contracted energy from the beginning.
• Frequent hydrology fluctuations.
• Two devastating floods.
