Union Cabinet approves INR 4136 crore for hydroelectric power in Northeast India

DIMAPUR — The Union Cabinet, chaired by Prime Minister Narendra Modi, has given its approval for a Central Financial Assistance (CFA) programme aimed at boosting hydroelectric power development in the North East Region (NER).

Announced on Wednesday, the initiative will provide financial support to NER state governments for their equity participation in hydroelectric projects undertaken through joint ventures with Central Public Sector Undertakings (CPSUs).

The Ministry of Power outlined the details of the scheme, stating that it carries a total outlay of INR 4,136 crore and will be implemented over a period of seven years, commencing in fiscal year 2024-25 and concluding in 2031-32. The programme aims to facilitate the development of hydroelectric projects with a combined capacity of approximately 15,000 MW.

The scheme will be funded through 10% Gross Budgetary Support (GBS) for NER from the ministry’s total outlay.

Under this scheme, the central government will offer grants to NER states to cover up to 24% of their equity contribution in joint venture hydroelectric projects with CPSUs. However, it will be subject to a ceiling of INR 750 crore per project.

The Ministry went on to clarify that the INR 750 crore limit could be reassessed and potentially revised on a case-by-case basis.

The ratio of equity of the CPSU and the state government in the joint venture would be maintained at the time of disbursing of the grant, it informed.

Furthermore, it said that the CFA would be limited to only viable hydro electric projects and states would be required to waive and stagger free power or reimburse SGST to make the project viable.

The Ministry expressed optimism that with the introduction of this scheme, participation of the state governments in the hydro development would be encouraged, and risk and responsibilities shared in a more equitable manner. By fostering partnerships between state governments and CPSUs, the initiative aims to streamline land acquisition, rehabilitation, resettlement, and local law and order issues, thereby mitigating potential project delays and cost overruns.

The ministry also stated that the scheme will play a significant role in harnessing the hydro power potential of the NER, and also bring huge investments in the region, providing direct employment to the local people along with indirect employment and entrepreneurial opportunities through transportation, tourism, small-scale business.

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