Govt Sanctions £12,461 Crore for 31,350 MW Hydro Power Development

The Union Cabinet has sanctioned Rs 12,461 crore to develop 31,350 MW of hydropower projects over the next eight years. This initiative, led by Prime Minister Narendra Modi, aims to enhance infrastructure for Hydro Electric Projects (HEP) with a total outlay of Rs 12,461 crore, according to an official statement.

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Budgetary Support and Implementation

The scheme will be executed from FY2024-25 to FY2031-32. The budgetary support limit has been set at Rs 1 crore per MW for projects up to 200 MW capacity and Rs 200 crore plus Rs 0.75 crore per MW for projects above 200 MW capacity. In exceptional cases, the support may increase to Rs 1.5 crore/MW if justified.

The scheme encompasses all hydro power projects exceeding 25 MW capacity, including private sector projects allocated transparently. Additionally, it covers all pumped storage projects (PSPs), including captive/merchant PSPs, provided they are allotted transparently. A cumulative PSP capacity of about 15,000 MW will be supported under this scheme.

Eligibility and Scope

Projects whose Letter of Award for the first major package is issued by June 30, 2028, will be considered under this scheme. The budgetary support will extend beyond roads and bridges to include transmission lines from powerhouses to pooling points, ropeways, railway sidings, and communication infrastructure. Strengthening existing roads/bridges leading to the project will also qualify for central assistance.

The government has introduced several policy measures to address challenges in hydro power development such as remote locations and lack of infrastructure. In March 2019, the Cabinet declared large hydro power projects as renewable energy sources and introduced Hydro Power Purchase Obligations (HPOs), tariff rationalisation measures through escalating tariffs, and budgetary support for flood moderation in storage HEPs.

Policy Initiatives

To promote the hydro power sector's viability, the Cabinet approved measures including declaring large hydro power projects as renewable energy sources and introducing Hydro Power Purchase Obligations (HPOs). Tariff rationalisation measures through escalating tariffs and budgetary support for flood moderation in storage HEPs were also approved.

The revised scheme aims to expedite hydro electric project development and improve infrastructure in remote and hilly areas. It is expected to generate significant direct employment for local people and indirect employment opportunities through transportation, tourism, and small-scale businesses.

Employment Opportunities

This revised scheme is anticipated to create numerous direct jobs for locals and indirect employment opportunities through transportation, tourism, and small-scale businesses. It will also encourage fresh investments in the hydro power sector and incentivise timely project completion.

The budgetary support for enabling infrastructure costs will be provided after appraisal by the DIB/PIB and approval by the competent authority as per existing guidelines. The move aims to widen the scope of budgetary support by including four additional items apart from roads and bridges construction.

The government has been proactive in addressing issues hindering hydro power development such as remote locations and lack of infrastructure. These modifications aim to make the sector more viable and promote faster development of hydro electric projects.

The Union Cabinet's decision reflects a commitment to enhancing India's hydropower capacity while addressing infrastructural challenges in remote areas. This initiative is expected to boost local economies through job creation and entrepreneurial opportunities while encouraging timely completion of new projects.