Govt Sanctions Major Funding for North Eastern Hydro Power Development

GG News Bureau
New Delhi, 28th August. The Union Cabinet on Wednesday approved a significant initiative to support the development of hydroelectric projects in the North Eastern Region (NER). This approval provides Central Financial Assistance (CFA) to State Governments in the region for their equity participation through Joint Venture (JV) collaborations with Central Public Sector Undertakings (CPSUs).

Key Details:

Scheme Outlay and Duration: The scheme, with an outlay of Rs. 4,136 crore, will be implemented from FY 2024-25 to FY 2031-32. It aims to support the development of approximately 15,000 MW of hydroelectric capacity.

Funding and Equity Participation: The scheme will be funded through a 10% Gross Budgetary Support (GBS) allocation for the NER. The grant for equity participation by State Governments will be capped at 24% of the total project equity, with a maximum limit of Rs. 750 crore per project. This cap may be revisited on a case-by-case basis.

Project Viability and State Role: Central Financial Assistance will be provided only to viable hydroelectric projects. States will need to waive or stagger free power and/or reimburse SGST to ensure project viability. State Governments will become stakeholders, which will help address issues like land acquisition, rehabilitation, and local law and order, reducing project delays and cost overruns.

Economic and Environmental Impact: The scheme is expected to attract substantial investment in the NER, creating numerous direct and indirect employment opportunities. It will also contribute to India’s Nationally Determined Contribution (INDC) of achieving 500 GW of renewable energy capacity by 2030 and enhance the flexibility and reliability of the national grid.

Previous Initiatives: The Government has previously approved measures to promote the hydro power sector, including declaring large hydro power projects as renewable energy sources, implementing Hydro Power Purchase Obligations (HPOs), and providing budgetary support for infrastructure development.

This initiative is set to significantly enhance hydro power development in the North East, supporting regional growth and contributing to national renewable energy goals.