Union Cabinet approves Rs 4,136 cr for 15 GW hydropower projects in Northeast

Syllad | The Rising MeghalayaAugust 28, 2024

The Union Cabinet on Wednesday approved equity support of Rs 4,136 crore to northeastern states for developing hydropower projects, totalling 15,000 MW capacity over the next eight years.

A meeting of the Cabinet chaired by Prime Minister Narendra Modi has approved the proposal of the Ministry of Power for providing Central Financial Assistance (CFA) to the state governments of the northeastern states towards their equity participation for the development of hydroelectric projects in the Northeast through joint venture (JV) collaboration between state entities and Central public sector undertakings (CPSU), an official statement here said.

This scheme has an outlay of Rs 4136 crore to be implemented from the 2024-25 fiscal to 2031-32 fiscal. A cumulative hydro capacity of about 15000 MW would be supported under the scheme. The scheme would be funded through 10% Gross Budgetary Support (GBS) for the northeastern region from the total outlay of the Ministry of Power, the release stated.

The scheme formulated by the Ministry of Power provides for the formation of a joint venture (JV) company for all the projects of a Central PSU with the state governments.

The grant towards the equity portion of the state government of the Northeast would be capped at 24% of the total project equity subject to a maximum of Rs 750 crore per project. The cap of Rs 750 crore for each project would be revisited, if required, on a case-to-case basis. 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, the release also said.

The CFA would be limited to only viable hydroelectric projects. The states would be required to waive/stagger free power and/or reimburse SGST to make the project viable.

With the introduction of this scheme, participation of the state governments in hydro development will be encouraged and risk and responsibilities shall be shared more equitably. The issues such as land acquisition, rehabilitation & resettlement and local law & order issues would be reduced with state governments becoming stakeholders. This would avoid time and cost over-run of the projects, the release further said.

This scheme shall play a significant role in harnessing the hydropower potential of the Northeast. It would bring huge investment in the Northeast and would provide large number of direct employment to the local people along with indirect employment / entrepreneurial opportunities through transportation, tourism, and small-scale business. Development of hydroelectric projects shall also contribute towards the realization of India’s Nationally Determined Contribution (INDC) of establishing 500 GW renewable energy capacity by 2030 and would help the integration of RE sources in the grid thus enhancing flexibility, security and reliability of the national grid, the release said.

The Central government has been taking several policy initiatives to address the issues impeding Hydro Power development. To promote the hydropower sector and to make it more viable, the Cabinet, on March 7, 2019, approved measures, viz., declaring large hydropower projects as renewable energy sources, hydropower purchase obligations (HPOs), tariff rationalization measures through escalating tariffs, budgetary support for flood moderation in storage HEP and budgetary support for the cost of enabling infrastructure, i.e., construction of roads and bridges, it added.