Assam thrust on small hydro power projects

Power-starved Assam now puts thrust on developing small hydro power projects through public-private-partnership (PPP) mode to make a big difference on the state's power scenario.

Today, two implementation agreements for two small hydro power projects of 2MW and 5MW each, to be developed by private sector, were signed in the presence of Assam power minister Pradyut Bordoloi and senior officials of the power department and Assam State Electricity Board (ASEB).

With this, the state hopes to rope in more private players in the power sector to help Assam improve its power scenario.

Bordoloi said that at least 8 other small hydro projects, to be developed by private sector or through public private partnership mode, are in the pipeline for which the implementation agreements will be signed in the next 8 to 10 months.

He said that with the implementation of "cluster of small projects" within next 4 months, the state would get around 250 MW of power.

As the power deficit in the state was increasing steadily, the Assam government in 2007 had drafted a new hydro power policy to facilitate the entry of private sector in developing power projects up to 25 MW.

Given that small power projects are entitled to incentives under the North-East Industrial and Investment Promotion Policy (NEIIPP),sponsored by the Centre, the state government hopes to make Assam a preferred destination for investment by private sector for small power projects.

The state government had formed a special purpose vehicle called Assam Power Projects Development Company Pvt. Ltd. (APPDCL) with equity participation from Infrastructure Leasing and Financial Services (ILFS) to help promote private sector role in small power generation projects.

APPDCL is entrusted to undertake project preparatory activities like identifying the project, preparation of detailed project report, facilitating various clearances, obtaining approval for power purchase and use of transmission network, select private partner to implement the project and so on.

"The government is putting thrust to the development of small hydro power projects which are feasible in Assam and does not create social issues like displacement and rehabilitation," said Bordoloi.

Citing a recent Central Electricity Authority (CEA) load survey, the minister said that the present peak hour demand of 1,000 MW would shoot up to 1,600 MW by 2011-12 and 2,700 MW by 2014-15 in Assam.

Hence, he justified allowing private sector to invest in small power generation projects in the state, as otherwise the state alone will not be able to generate enough to meet the projected demand.