The Union Cabinet on Wednesday approved equity assistance of ₹4,136 crore ($492.4 million) for developing hydropower projects in the northeastern states, generating a capacity of 15 gigawatts over the next eight years.
According to a press statement, the scheme would be funded through 10 percent gross budgetary support for the northeastern Region from the total outlay of the Ministry of Power.
The scheme will entail the formation of a joint venture of a central public sector undertaking and the state governments for all the projects.
The statement further said that the grant toward the equity portion of the state government would be capped at 24 percent of the total project equity subject to a maximum of ₹750 crore per project.
If required, the government will revisit the cap of ₹750 crore for each project on a case-to-case basis.
The ratio of equity of the central PSU and the state government in the JV would be maintained at the time of disbursing of the grant.
The official statement said the scheme would be implemented between financial years 2024-25 and 2031-32.
With this scheme’s introduction, state governments’ participation in hydro development shall be encouraged, and risks will be shared more equitably.
Issues such as land acquisition, rehabilitation, resettlement, and local law and order would be reduced with state governments becoming stakeholders, mitigating project time and cost overrun.
The development of hydroelectric projects shall also contribute toward realizing India’s nationally determined contribution of establishing 500 GW of renewable energy capacity by 2030.
It would help integrate renewable sources, thus enhancing the national grid’s flexibility, security and reliability.
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