Delhi: The Union Cabinet granted Rs 4,136 crore in equity support to northeast states for the development of hydropower projects, with a total capacity of 15,000 MW within the next eight years.
The Prime Minister Narendra Modi-led Cabinet has given the green light to the Ministry of Power's proposal to offer central financial assistance to North East Region state governments for their involvement in hydroelectric project development via Joint Ventures with Central Public Sector Undertakings, as per an official announcement.
In a briefing on the Cabinet decisions, Information and Broadcasting Minister Ashwini Vaishnaw stated that this plan will require Rs 4,136 crore and will be executed from 2024-25 to 2031-32. The scheme is said to support a total hydro capacity of approximately 15,000 MW. The funding for the program will come from 10 percent of the Ministry of Power's total budget through gross budgetary support (GBS) for the northeastern region.
The maximum grant for the equity section of the state government of NER would be limited to 24 percent of the total project equity, with a cap of Rs 750 crore per project. If necessary, the limit of Rs 750 crore for each project will be reconsidered individually. At the moment when the grant is distributed, the joint venture's equity ratio between the CPSU and state government will be upheld.
Financial support from the government will be restricted to hydroelectric projects that are deemed feasible. To ensure the project is feasible, states must waive or adjust electricity charges and refund SGST. The scheme aims to promote involvement of state governments in hydro development and ensure a fair sharing of risks and responsibilities, according to the statement.
State governments becoming stakeholders would lead to a decrease in problems such as land acquisition, rehabilitation & resettlement, and local law & order issues. It stated that this will prevent projects from going over budget and deadline. It has been pointed out that this will lead to significant investment in the northeastern area and will result in a substantial amount of job opportunities for the local residents.
Hydroelectric projects will aid India in achieving its goal of reaching 500 GW of renewable energy capacity by 2030 through the integration of RE sources into the grid, improving flexibility, security, and reliability.
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