Cabinet approves Rs 12,461 cr support for 31,350 MW hydropower projects

Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the proposal of Ministry of Power for modification of the scheme of budgetary support for cost of Enabling Infrastructure for HEP

The Union Cabinet on Wednesday approved a Rs 12,461 crore outlay to support the development of 31,350 MW hydropower projects to be implemented over the next eight years.

The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the proposal of the Ministry of Power for modification of the scheme of budgetary support for the cost of Enabling Infrastructure for Hydro Electric Projects (HEP) with a total outlay of Rs 12,461 crore, an official statement said.

According to the statement, the scheme will be implemented from FY2024-25 to FY2031-32.

The limit of the budgetary support for the cost of enabling infrastructure has been rationalised to Rs one crore/MW for projects up to 200 MW and Rs 200 crore plus Rs 0.75 crore per MW exceeding 200 MW, for projects above 200 MW.

Prime Minister Narendra Modi said on Wednesday that the new Hydroelectric Projects scheme approved by the Cabinet will boost infrastructure development in remote areas of the country.

Taking to the social media platform X, the PM said, "The modifications in the Hydroelectric Projects scheme approved by the Cabinet will boost infrastructure development in remote areas. It will accelerate hydropower growth, create jobs and drive investments in the sector."

The Government of India has been taking several policy initiatives to address the issues impeding hydropower development in remote locations and hilly areas. To promote the hydropower sector and to make it more viable, the Cabinet in March 2019 approved measures, namely declaring large hydropower projects as renewable energy sources, hydropower 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.

This revised scheme would help in the faster development of hydroelectric projects, improve infrastructure in the remote and hilly project locations and a large number of direct employment to the local people along with indirect employment / entrepreneurial opportunities through transportation, tourism, small-scale business. It would encourage fresh investments into the hydropower sector and incentivise the timely completion of new projects.