Adani Power, Druk Green Power JV: Bhutan Hydroelectric Project Formed for 770 MW

• Adani Power Limited and Druk Green Power Corporation Limited have formed a joint venture for the 770 MW Chamkharchhu-I Hydroelectric Project in Bhutan.
• The project will operate under a Build, Own, Operate, Transfer (BOOT) model, with Druk Green holding 51% and Adani Power 49% equity.
• Cyril Amarchand Mangaldas advised Adani Power on the investment cum shareholders agreement for this cross-border energy infrastructure deal.
• This marks the second major hydropower collaboration between the two entities, following the 570 MW Wangchhu Hydroelectric Project.
• The venture is part of a larger 5,000 MW hydropower development Memorandum of Understanding between the Adani Group and Druk Green.

Lawyers advising on such projects should note the increasing trend of Indian companies partnering with regional entities for large-scale power generation, particularly in the hydropower sector, and the complexities involved in structuring such joint ventures under a BOOT model.

Adani Power Limited has formalized a significant partnership with Druk Green Power Corporation Limited, establishing a joint venture for the development of the 770 MW Chamkharchhu-I Hydroelectric Project. This substantial cross-border energy infrastructure deal is set to unfold in the Kingdom of Bhutan, utilizing a Build, Own, Operate, Transfer (BOOT) model. The agreement, structured as an investment cum shareholders agreement, outlines the operational and financial framework for this large-scale power generation initiative.

Under the terms of the newly formed entity, Adani Power will hold a 49% equity stake, while Druk Green Power Corporation Limited will maintain a controlling interest with a 51% share. This ownership structure underscores a collaborative approach to developing Bhutan's hydroelectric potential, with both parties contributing to the project's success. The Chamkharchhu-I Hydroelectric Project represents a key step in expanding regional energy capacity and fostering economic cooperation between India and Bhutan.

The intricate legal structuring of this Adani Power Druk Green Power JV Bhutan hydroelectric project was expertly guided by Cyril Amarchand Mangaldas, who provided comprehensive advisory services to Adani Power Limited. The firm's involvement highlights the complex legal requirements inherent in large-scale international energy ventures, particularly those involving a BOOT framework. This engagement further solidifies Cyril Amarchand Mangaldas's reputation in advising on significant cross-border energy infrastructure deals.

Leading the legal team for Cyril Amarchand Mangaldas was Surya Sreenivasan, a Partner and Regional Head for Financial Sponsors (Infrastructure), who spearheaded the transaction. He was supported by Medha Rao, a Principal Associate, and Tanuj Agarwal, a Senior Associate, ensuring thorough legal diligence and documentation. Additionally, strategic inputs critical to the transaction's successful execution were provided by Paridhi Adani, a Partner and Head of the firm's Ahmedabad office, demonstrating a multi-faceted approach to legal counsel for the Adani Power Druk Green Power JV.

This 770 MW Chamkharchhu-I Hydroelectric Project marks a pivotal moment, representing the second major hydropower collaboration between Adani Power and Druk Green Power. Their prior successful partnership involved the 570 MW Wangchhu Hydroelectric Project, on which Cyril Amarchand Mangaldas also provided legal counsel, indicating a sustained and trusted relationship between the entities and their advisors. The formal signing of the investment cum shareholders agreement for Chamkharchhu-I was a high-profile event, attended by distinguished dignitaries including Lyonchen Dasho Tshering Tobgay, the Prime Minister of Bhutan, alongside the Minister of Finance and the Minister of Energy and Natural Resources, underscoring the project's national importance.

The current Adani Druk Green hydropower MoU is part of a broader strategic initiative, stemming from a Memorandum of Understanding between the Adani Group and Druk Green, which envisions the development of 5,000 MW of hydropower capacity. This overarching agreement signals a growing trend of Indian companies engaging in substantial cross-border energy infrastructure deals, particularly in the hydropower sector, by partnering with regional entities like Druk Green Power Corporation. Lawyers advising on such projects should note the increasing trend of Indian companies partnering with regional entities for large-scale power generation, particularly in the hydropower sector, and the complexities involved in structuring such joint ventures under a BOOT model. This project exemplifies the intricate legal and commercial considerations inherent in these significant international energy developments.

Lawyers advising on cross-border energy infrastructure projects should note the increasing trend of Indian companies partnering with regional entities for large-scale power generation, particularly in the hydropower sector, and the complexities involved in structuring such joint ventures under a BOOT model.

Source: Original reporting via Bar & Bench