Shimla, Oct 1 (IANS): The public sector Satluj Jal Vidyut Nigam Ltd (SJVNL) has signed an agreement for commissioning of the 600 MW Kholongchu Hydro Electric Project in Bhutan, whose foundation stone was laid by Prime Minister Narendra Modi, the company said Wednesday.

The agreement was signed by SJVNL chief managing director R.P. Singh and Druk Green Power Corp managing director Dasho Chhewang Rinzi in Bhutan Tuesday.

This is the first hydro electric project being developed by a joint venture company of public sector undertakings of both the governments, the SJVNL said in a statement.

It will be implemented under build, own, operate and transfer (BOOT) model.

Earlier, the inter-government agreement between Bhutan and Indian governments was signed April 22 for execution of four hydropower projects.

The Kholongchu project is a run-of-the-river project located on the Kholongchu river. On completion, the project will generate 2,568.52 million units of energy. The project is estimated to cost Rs.3,868.87 crore which will be shared in the ratio of 50:50 by the two joint venture partners.

Modi laid the stone of the project June 16 where Bhutanese Prime Minister Dasho Tshering Tobgay was also present.