New Delhi:- In a significant move to boost hydroelectric power development in the North Eastern Region (NER), the Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the proposal by the Ministry of Power to provide Central Financial Assistance (CFA) to state governments in the region. The assistance will support state equity participation in the development of Hydro Electric Projects through Joint Venture (JV) collaborations between state entities and Central Public Sector Undertakings (CPSUs).
The scheme, set to be implemented from Financial Year 2024-25 to FY 2031-32, aims to support the development of a cumulative hydro capacity of approximately 15,000 MW. It will be funded through a 10 percent Gross Budgetary Support (GBS) allocated for the North Eastern Region, derived from the Ministry of Power's total outlay.
Under the scheme, a Joint Venture Company will be formed for each project involving a CPSU and the respective state government. The CFA will cover up to 24 percent of the state government's equity in the project, with a cap of ₹750 crore per project. The equity ratio between the CPSU and the state government will be maintained at the time of grant disbursement.
This initiative is expected to foster greater state government participation in hydroelectric development, equitably share risks and responsibilities, and mitigate challenges such as land acquisition, rehabilitation, resettlement, and local law and order issues. By addressing these concerns, the scheme aims to prevent time and cost overruns in hydro projects. Additionally, it is poised to play a crucial role in harnessing the hydro power potential of the North East, creating direct employment opportunities, and contributing to India's goal of establishing 500 GW of renewable energy capacity by 2030 as part of its Nationally Determined Contributions (INDC).
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