Rs.4,136 cr hydropower projects approved for Northeast states, aiming for 15,000 MW capacity

Centre to provide Rs.4,136 cr for 15 GW hydropower projects in the Northeast

In a significant move to boost the development of hydroelectric power in the northeastern region, the Union Cabinet, chaired by Prime Minister Narendra Modi, approved a proposal from the Ministry of Power on Wednesday. The project will provide central financial assistance to northeastern state governments for their equity participation in hydroelectric projects through joint venture (JV) partnerships with central public sector undertakings (CPSUs).

With an outlay of Rs.4,136 crore, the scheme will be implemented from FY 2024-25 to FY 2031-32. It aims to support the development of approximately 15,000 MW of hydro capacity across the region.

The funding will be sourced from the 10 percent Gross Budgetary Support (GBS) allocated to the North Eastern Region (NER) from the Ministry of Power’s total budget. Under the scheme, a joint venture company will be formed for each project involving a CPSU and the state government.

The scheme stipulates that the grant for the equity portion of the northeastern states will be capped at 24 percent of the total project equity, with a maximum limit of Rs.750 crore per project. This cap may be reassessed on a case-by-case basis if necessary.

This initiative underscores the government’s commitment to enhancing infrastructure and energy capacity in the northeastern states, which are crucial for regional development and energy security.

The ratio of equity of the CPSU and the state government in the JV would be maintained at the time of disbursing of the grant.

Central financial assistance will be provided only for viable hydroelectric projects, with states required to offer incentives like waiving or staggering free power and reimbursing SGST to ensure project feasibility. The scheme aims to boost state involvement, reducing issues such as land acquisition and local law and order problems, thereby minimizing project delays and cost overruns.

This initiative will enhance the region’s hydropower capacity, generate significant direct and indirect employment opportunities, and support India’s goal of 500 GW of renewable energy by 2030. It will also improve the integration and reliability of renewable energy in the national grid.

The Centre has previously approved measures to promote hydropower, including recognizing large hydropower projects as renewable energy sources and providing budgetary support for necessary infrastructure.

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