MUMBAI: State government undertaking Sikkim Urja‘s Rs 11,400 crore claim for the destroyed 1,200MW Teesta III hydropower project may become a landmark in climate risk management. A decision on the claim, which is the largest in the category and one that reinsurers are reluctant to cover, is expected soon.
Reinsurers have capped their liability at Rs 500 crore for Glacial Lake Outburst Floods (GLOF) as these climate change eventsare considered too significant for conventional covers.GLOFs occur when the dam or moraine holding a glacial lake back fails, releasing a substantial volume of water downstream.
Experts worldwide recognise the Sikkim floods as a GLOF event. In the first week of October 2023, South Lhonak Lake in North West Sikkim burst after rains increased water levels. This resulted in flooding in several districts across the state and the washing away of 13 bridges in addition to the hydel power project.
While reinsurers are willing to offer bigger coverage limits, the associated premiums are significantly higher and can impact project cost estimates. Even as there have been several GLOF events worldwide, most have occurred in remote areas with limited property loss.
In Sikkim Urja,…
Reinsurers have capped their liability at Rs 500 crore for Glacial Lake Outburst Floods (GLOF) as these climate change eventsare considered too significant for conventional covers.GLOFs occur when the dam or moraine holding a glacial lake back fails, releasing a substantial volume of water downstream.
Experts worldwide recognise the Sikkim floods as a GLOF event. In the first week of October 2023, South Lhonak Lake in North West Sikkim burst after rains increased water levels. This resulted in flooding in several districts across the state and the washing away of 13 bridges in addition to the hydel power project.
While reinsurers are willing to offer bigger coverage limits, the associated premiums are significantly higher and can impact project cost estimates. Even as there have been several GLOF events worldwide, most have occurred in remote areas with limited property loss.
In Sikkim Urja,…
