Centre clears ₹12,461 cr for 31,350 MW hydro projects

The Union Cabinet approved the Ministry of Power’s proposal on Wednesday to revamp the scheme for budgetary support, with a total outlay of ₹12,461 crore, aiming to achieve a cumulative generation capacity of approximately 31,350 MW, according to an official statement. The scheme focuses on strengthening infrastructure for Hydro Electric Projects (HEP). The scheme will support Hydro Power Projects with a capacity exceeding 25 MW and all transparently awarded Pumped Storage Projects (PSPs), including Captive and Merchant types. The scheme is set to support a total PSP capacity of around 15,000 MW.

With a total outlay of ₹12,461 crore, the scheme aims to achieve a cumulative generation capacity of approximately 31,350 MW. It will be implemented from FY 2024-25 to FY 2031-32. Projects that secure their first major contract by 30th June 2028 will be eligible for inclusion under this scheme, the release states.

The revised budgetary support has been adjusted to a maximum of ₹1 crore per MW for projects up to 200 MW, and ₹200 crore plus ₹0.75 crore per MW beyond 200 MW for larger projects above 200 MW, it adds.

“For exceptional cases the limit of budgetary support may go up to ₹1.5 crore/MW provided sufficient justification exists,” it states.

Prime Minister Narendra Modi remarked on Wednesday that the newly approved Hydroelectric Projects scheme would enhance infrastructure development in remote areas across the country. The PM shared via X, “The modifications in the Hydroelectric Projects scheme approved by the Cabinet will boost infrastructure development in remote areas. It will accelerate hydropower growth, create jobs and drive investments in the sector.”

To broaden the scope of budgetary support for the cost of enabling infrastructure, the scheme will now include additional items beyond the construction of roads and bridges. Specifically, it will cover expenses for constructing transmission lines from powerhouses to the nearest pooling points, including upgrades to pooling substations managed by State or Central Transmission Utilities. It will also support the construction of ropeways, railway sidings, and communication infrastructure. Additionally, the scheme will provide central assistance for the strengthening of existing roads and bridges leading to the project.

To promote hydropower and increase its viability, the Cabinet, in March 2019, approved measures such as declaring large hydropower projects as renewable energy sources, implementing Hydropower Purchase Obligations (HPOs), rationalising tariffs, and providing budgetary support for flood control in storage HEPs, alongside funding for enabling infrastructure like roads and bridges.

The cabinet notes that this revised scheme is expected to accelerate the development of hydroelectric projects, enhance infrastructure in remote and hilly areas, and create significant direct employment opportunities for local residents, along with indirect opportunities in areas such as transport, tourism, and small businesses. The scheme is also aimed at attracting fresh investments in the hydropower sector and encouraging the timely completion of new projects.