The Union Cabinet on Wednesday approved the proposal of the Ministry of Power for providing aid to North Eastern Region (NER) towards development of hydro electric projects through joint venture collaboration between state entities and Central Public Sector Undertakings (CPSU).

“This scheme has an outlay of Rs 4136 crore to be implemented from FY 2024-25 to FY 2031-32. A cumulative hydro capacity of about 15000 MW would be supported under the scheme. The scheme would be funded through 10 per cent Gross Budgetary Support (GBS) for NER from the total outlay of the Ministry of Power,” a government statement said.

The scheme formulated by the Power Ministry provides for formation of a JV company for all the projects of a Central PSU with the State government, it said.

“The grant towards 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 Rs750 crore per project. The cap of Rs 750 crore for each project would be revisited, if required, on a case-to-case basis. The ratio of equity of the CPSU and the State government in the JV would be maintained at the time of disbursing of the grant,” the government said.

Informing that Central Financial Assistance (CFA) would be limited to only viable Hydro Electric Projects, it said, “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 government said.

The issues such as land acquisition, rehabilitation and resettlement and local law and order issues would be reduced with State governments becoming stakeholders, and this would avoid time and cost over-run of the projects, it said.

Stating that this scheme shall play a significant role in harnessing the hydro power potential of NER, the government said, “It would bring huge investment in the NER and would provide large numbers 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 resources in the grid thus enhancing flexibility, security and reliability of the national grid, it said.

It may be mentioned that the Centre has been taking several policy initiatives to address the issues impeding Hydro Power development.