The World Bank has approved a $648m loan to THDC India to construct the 444 MW Vishnugad Pipalkoti hydroelectric project on the Alaknanda river in Uttarakhand.

The plant will be used as a peaking plant for India’s Northern Grid, which faces severe power shortage at times of peak demand.

The project will build a 65 metre diversion dam near Helang village in Chamoli district to create a small reservoir in the Alaknanda. A 13.4 km headrace tunnel will carry the water to an underground powerhouse near Haat village, with all diverted water then returned to the river.

When the project is operational, THDC said each affected household will receive 100 kWh of free electricity each month for ten years. THDC will also give 1 per cent of the annual revenue of the project to develop the local area and build hospitals, roads and water supply.

The low interest loan has a six-year grace period and a maturity of 29 years.

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