MIRA INFORM REPORT

Report Date :

15.10.2007

IDENTIFICATION DETAILS

Name :	Chukha Hydro Power Corporation

Registered Office :	Chukha, Thimpu

Country :	Bhutan

Date of Incorporation :	1978

Legal Form :	Corporation

Line of Business :	Generation of Hydro Power.

RATING & COMMENTS

MIRA’s Rating :

RATING		STATUS	PROPOSED CREDIT LINE
26-40	B	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average.	Small

Status :	Satisfactory

Payment Behaviour :	No Complaints

Litigation :	Clear

name

Chukha Hydro Power Corporation

Chukha, Thimpu

Bhutan

Telephones : 975 5 325095 / 325096

Email : chukhahydropower@druknet.bt

Legal Status

Corporation

Name of Directors

Yeshey Dorji (MD)

Kinzang Tobjoy

S Dorji

A Kumar

Shareholders

All shares held by India and Nepal Govt.

Auditor

Not known

Bankers

Bank of Bhutan, Thimpu, Bhutan

Bhutan National Bank, Thimpur, Bhutan

Business

See details below

Premises

- do -

No. of Staff

275 nos.

Trade Reference

India

Financial

See details below

Trade Terms

Purchase - L/C for 45 days, Credit – 45 days

Sales - L/C for 30 days, Credit 30 days

Remarks

Well established, respectable and reputed concern. Trade relations are fare.

Chukha Hydropower Corporation (CHPC)

The current operational - Chukha Hydropower Corporation (CHPC) was entirely funded by the Government of India. The construction of the Chukha Hydroelectric plant was started in 1978. It was successfully commissioned in 1988. India constructed the 336 mega watt CHPC- Bhutan’s first mega power project on a turnkey basis. On completion, the project cost was estimated at NU/IRS 2,460 million ( then approximately US $ 200 million). India provided a 60 percent grants and 40 percent loan at 5 percent per annum repayable in 15 years in equated annual instalments, the first repayment commencing 3 years after each withdrawal of the loan. (Nu is short form of Bhutanese currency Ngultrum. IRS is short from for Indian Rupees. The value of NU is at par with IRS)

The CHPC has a 40 metre (130 ft.) high diversion dam, located about 1.60 km upstream of the point of confluence of Ti-Chu ( river) with Wong Chu (river) where the river bed lies at + 1689 metre having maximum pond level of + 1716.20 metre. It has 6560 metre (21517 ft.) long head race tunnel, 71.5 cumecs (250 cusecs) capacity, taking off on the left bank and conveying the waters to an underground power house.

The project was handed over to Bhutanese management in June 1991. 70% of power generated by this project is exported to India. It has an installed capacity of 336 MW. In 1998, electricity valued at Rs1338.8 million was exported to India. In 2000, It exported electricity worth Rs 1650 million to India. In 2000, according to the government newspaper Kuensel, the Chukha Hydro Power Corporation alone contributed Nu. 2007.3 million ( US $ 40.75 million –Eds) to the national exchequer. Today, the power sector contributes about 45 percent to the gross revenue generation in the country and accounts for about 11 percent of the GDP.” The Chukha Hydro Power Corporation (CHPC) manages the project.

During the period between April 2003 to March 2004, a total of 1494.75 MUs of power was exported to India

Project details

Total Energy Output: 1320 MUs on the basis of average flow.

Cost on completion : Nu. 2460 Million

Generation Tariff : Nu. 1.50 per unit to be raised to Nu. 2.00 from January 1, 2005

Source: Wangchu River

Net Head: 435 m

Capacity : 4 x 84 MW

Date of Commissioning : 1988

Beneficiaries: India’s Eastern Region Constituents comprising of: West Bengal, Bihar, Jharkhand, Orissa, Sikkim and Damodar Valley Corporation (DVC)

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
NR		In view of the lack of information, we have no basis upon which to recommend credit dealings	No Rating

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

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