The government Thursday approved a proposal for state-run hydro power giant NHPC to take over debt-laden Lanco's 500 MW Teesta hydro-electric power project in Sikkim.

"Cabinet Committee on Economic Affairs (CCEA) gives approval for the investment sanction for acquisition of LancoTeesta Hydro Power Ltd (LTHPL) and execution of balance work of the Teesta Stage-Vl Hydro Electric Project by the NHPC Ltd in Sikkim," according to an official statement.

Earlier, briefing reporters on the decision taken by the Union Cabinet headed by Prime Minister Narendra Modi, Union Finance Minister Arun Jaitley said that NHPC has also been allowed to spend Rs 574.04 crore to complete the balance work at the project.

The project would be implemented with an estimated cost of Rs 5,748.04 crore (at July 2018 price level). The project would generate 2,400 million units of power in 90 per cent dependable year with installed capacity of 500 MW (125 MWX4).

Teesta Stage-VI hydro-electric project is a run of river (RoR) scheme in Sirwani Village of Sikkim to utilise the power potential of Teesta river basin in cascade manner.

The project shall help in meeting peaking demand of energy, balancing and ramping requirement of the grid.

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