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NEW DELHI — The Union Cabinet on Wednesday approved equity support of INR 4,136 crore to northeast states for developing hydropower projects, totalling 15,000 MW capacity over the next eight years.
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 NER (North East Region) towards their equity participation in the development of hydroelectric projects through Joint enture (JV) collaboration between state entities and Central Public Sector Undertakings, an official statement said.
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This scheme has an outlay of INR 4,136 crore to be implemented from 2024-25 to 2031-32, Information and Broadcasting Minister Ashwini Vaishnaw said in a briefing on the Cabinet decisions.
A cumulative hydro capacity of about 15,000 MW would be supported under the scheme, the statement said.
The scheme will be funded through 10 per cent gross budgetary support (GBS) for the northeastern region from the total outlay of the Ministry of Power.
The grant towards the equity portion of the state government of NER would be capped at 24 per cent of the total project equity, subject to a maximum of INR 750 crore per project.
The cap of INR 750 crore for each project would be revisited, if required, on a case-to-case basis.
The equity ratio of the CPSU and state government in the JV will be maintained at the time of disbursing of the grant.
Central financial assistance would be limited to only viable hydroelectric projects. States would be required to waive or stagger free power and reimburse SGST to make the project viable.
With the introduction of this scheme, participation of state governments in hydro development will be encouraged and risk and responsibilities will be shared in a more equitable manner, the statement said.
The issues like land acquisition, rehabilitation & resettlement and local law & order issues would be reduced with state governments becoming stakeholders. This will avoid time and cost over-run of the projects, it added.
It would bring huge investment in the northeastern region and will provide a large number of direct employment to the local people, it noted.
The development of hydroelectric projects will also contribute towards the realisation of India’s Nationally Determined Contribution (INDC) of establishing 500 GW renewable energy capacity by 2030 and help the integration of RE sources in the grid thus enhancing flexibility, security and reliability of the national grid, as per the statement.