The Ministry of Power’s proposal to provide Central Financial Assistance (CFA) to the State Governments of the North Eastern Region (NER) for their equity participation in the development of Hydro Electric Projects in the NER through Joint Venture (JV) Collaboration between State entities and Central Public Sector Undertakings has been approved by the Union Cabinet, which is presided over by Prime Minister Shri Narendra Modi.
The project would cost Rs. 4136 crore and be implemented between FY 2024–25 and FY 2031–32. Under the plan, a total hydro capacity of around 15,000 MW would be supported. The program would be financed by 10% of the Ministry of Power’s overall expenditures for the North Eastern Region’s Gross Budgetary Support (GBS).
The Ministry of Power’s scheme calls for the creation of a Joint Venture (JV) Company between the State Government and a Central PSU for all of its projects.
The State Government of NER’s equity part grant will be limited to 24 percent of the entire project equity, with a maximum of 750 crores per project. If necessary, the cap of Rs. 750 crore for each project will be reviewed on an individual basis. When the grant was being disbursed, the equity ratio between the State Government and the CPSU in the joint venture would remain intact.
Central Financial Assistance would be limited to only viable Hydro Electric Projects. States would be required to waive / stagger free power and / or reimburse SGST to make the project viable.
With the introduction of this scheme, participation of the State Governments in the hydro development shall be encouraged and risk and responsibilities shall be shared in a more equitable manner. The issues such as land acquisition, rehabilitation & resettlement and local law & order issues would be reduced with State Governments becoming stakeholders. This would avoid time and cost over-run of the projects.
This scheme shall play a significant role in harnessing the hydro power potential of North East. It would bring huge investment in the North Eastern Region and would provide large number of direct employment to the local people along with indirect employment / entrepreneurial opportunities through transportation, tourism, small-scale business. Development of hydroelectric projects shall also contribute towards realization of India’s Nationally Determined Contribution (INDC) of establishing 500 GW renewable energy capacity by 2030 and would help integration of RE sources in the grid thus enhancing flexibility, security and reliability of the national grid.
The Government of India has been taking several policy initiatives to address the issues impeding Hydro Power development. To promote the hydro power sector and to make it more viable, the Cabinet, on 7th March, 2019, approved measures, viz., declaring large hydro power projects as Renewable Energy sources, Hydro Power Purchase Obligations (HPOs), tariff rationalization measures through escalating tariff, budgetary support for flood moderation in storage HEP and budgetary support for the cost of enabling infrastructure, i.e., construction of roads and bridges.
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Source: PIB
