Cabinet approves revised budgetary support for Hydro Electric projects infrastructure
The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved modifications to the budgetary support scheme aimed at enhancing infrastructure for Hydro Electric Projects (HEPs). The revised scheme, with a total outlay of ₹12,461 crore, will be implemented from FY 2024-25 to FY 2031-32.
The Government of India has been taking proactive steps to address the challenges of hydroelectric power development, particularly in remote and hilly regions where lack of infrastructure has been a significant hurdle. To further boost the sector, the Cabinet had previously introduced measures such as recognizing large hydro projects as renewable energy sources, implementing Hydro Power Purchase Obligations (HPOs), and providing budgetary support for both flood moderation and enabling infrastructure.
Key Modifications: The newly approved modifications include an expanded scope of budgetary support, which now covers infrastructure such as:
– Transmission lines from powerhouses to the nearest pooling points and upgradation of substations.
– Construction of ropeways, railway sidings, and communication infrastructure.
– Strengthening of existing roads and bridges leading to project sites.
The scheme will support a cumulative generation capacity of approximately 31,350 MW and will apply to all hydro projects exceeding 25 MW capacity, including private sector projects awarded through transparent processes. It will also extend to Pumped Storage Projects (PSPs) with a cumulative capacity of around 15,000 MW.
Funding and Eligibility: Projects that are awarded by June 30, 2028, will be eligible under this revised scheme. The budgetary support limit has been rationalized, with a ceiling of ₹1 crore per MW for projects up to 200 MW. For larger projects, the limit has been set at ₹200 crore plus ₹0.75 crore per MW for capacities above 200 MW. Exceptional cases may see support extended to ₹1.5 crore per MW, subject to sufficient justification.
The budgetary support will only be provided after a thorough appraisal of the project’s infrastructure costs by the Department of Investment and Public Asset Management (DIPAM) or Public Investment Board (PIB), and subsequent approval from the Competent Authority.
Impact: The revised scheme is expected to expedite the development of hydroelectric projects across India, improve infrastructure in remote areas, and generate significant employment opportunities for local communities. It will also attract new investments into the hydro power sector and incentivize timely completion of projects, further supporting India’s renewable energy goals.
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