India needs patient capital to boost small hydro projects: MNRE Secretary

MNRE Secretary S K Sarangi says delays in forest, environment and right-of-way clearances hurt project execution, calling for long-term patient capital

India needs a mechanism to generate and escalate alerts over undue delays in the development of small hydro power projects, even as the Ministry of Environment, Forest and Climate Change (MoEFCC) has assured of timely clearances, S K Sarangi, Secretary, Ministry of New and Renewable Energy (MNRE), said on Thursday.

 

Speaking at an event on small hydropower here, he highlighted the long lead time for starting hydropower projects as a key challenge, noting that delays in obtaining forest, environment and right-of-way clearances affect timely project execution.

 

The ministry said Sarangi emphasised the need to improve the bankability of small hydropower projects, saying that their unique cash-flow profile necessitates access to long-term patient capital.

  

Sarangi also urged the Indian Renewable Energy Development Agency (IREDA) to take the lead in working with banks and multilateral development institutions, including the Asian Development Bank (ADB) and the World Bank, to facilitate greater availability of patient capital for project developers.

 

Speaking at the same event, Minister of State for New and Renewable Energy Shripad Yesso Naik said India’s small hydro potential currently stands at 21 Gigawatt (Gw) across 7,100 sites, of which only about 5.2 Gw has been harnessed. He said this represented a huge opportunity for development.

 

Naik highlighted the government’s proposed Small Hydro Power Development Scheme for 2026-27 to 2030-31, with an outlay of ₹2,584.60 crore and a target of 1,500 Mw of new small hydropower capacity.

 

The Scheme will also incentivise states to prepare detailed project reports for about 200 projects, creating a pipeline of small hydropower projects for future development.

 

The Minister highlighted that India has crossed the milestone of 300 Gw of installed non-fossil-fuel capacity, adding that the strength of the country’s energy transition lies in building a diverse, balanced and resilient energy portfolio suited to its geography, resources and development needs.