New Delhi: On Wednesday, the Union Cabinet sanctioned a budget of Rs 12,461 crore to aid in the growth of 31,350 MW hydropower projects that will be carried out within the next eight years. The official statement said that the Union Cabinet, led by Prime Minister Narendra Modi, has given the green light to the Ministry of Power's proposal to adjust the budgetary support scheme for infrastructure costs of Hydro Electric Projects (HEP) worth Rs 12,461 crore. As per the announcement, the plan will be put into action from fiscal year 2024-25 through fiscal year 2031-32.
The maximum budget for infrastructure costs has been standardized to Rs 1 crore per MW for projects under 200 MW capacity and Rs 200 crore plus Rs 0.75 crore per MW for projects over 200 MW capacity. In rare situations, the maximum budgetary support limit can be increased to Rs 1.5 crore per MW if there is enough justification. The plan involves spending Rs 12,461 crore to create around 31,350 MW of generation capacity between FY 2024-25 and FY 2031-32, as per the announcement.
The plan will apply to every hydro power project with a capacity exceeding 25 MW, including private sector projects allocated transparently. This plan will also be valid for all pumped storage projects (PSPs), including captive/merchant PSPs, as long as the project has been allocated in a transparent manner. The program would back a total PSP capacity of around 15,000 MW.
Projects that receive the Letter of Award for their first major package by June 30, 2028 will be eligible for consideration under this scheme. The move was announced to expand the scope of budgetary support for the cost of essential infrastructure by adding four additional items besides road and bridge construction.
The expenses cover the construction of a transmission line from the power house to the closest pooling point, as well as the upgrading of the pooling substation of the state/central transmission utility, ropeways, railway siding, and communication infrastructure. The project will also qualify for central assistance under this scheme for improving current roads/bridges leading to it.
The budgetary support for the enabling infrastructure costs will be given following assessment by the DIB/PIB and approval from the competent authority in accordance with existing guidelines. The government has implemented various policy measures to tackle obstacles in the development of hydro power, such as remote locations, mountainous regions, and lack of infrastructure.
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