Cabinet approves ₹12,461 cr for hydro project infra from FY 2024-32

The Cabinet in  March, 2019, approved measures, namely declaring large hydro power projects as Renewable Energy sources, Hydro Power Purchase Obligations (HPOs), tariff rationalisation measures through escalating tariff, budgetary support for flood moderation in storage HEP and budgetary support for the cost of enabling infrastructure, i.e., construction of roads and bridges.

The Union Cabinet chaired by the Prime Minister Narendra Modi has approved the proposal of the Ministry of Power for modification of the scheme of budgetary support for the cost of Enabling Infrastructure for Hydro Electric Projects (HEP) with a total outlay of ₹12461 crore. The scheme would be implemented from FY 2024-25 to FY 2031-32.

The Government of India has been taking several policy initiatives to address the issues impeding Hydro Power development, viz., remote locations, hilly areas, lack of infrastructure etc. To promote the hydro power sector and to make it more viable, the Cabinet in March, 2019, approved measures, namely declaring large hydro power projects as Renewable Energy sources, Hydro Power Purchase Obligations (HPOs), tariff rationalisation measures through escalating tariff, budgetary support for flood moderation in storage HEP and budgetary support for the cost of enabling infrastructure, i.e., construction of roads and bridges.

For the faster development of Hydro Electric Projects and improvement of infrastructure in the remote project locations, the following modifications have been made in the earlier scheme:

a)   To widen the ambit of the Budgetary Support for cost of Enabling Infrastructure by including four more items apart from construction of roads and bridges i.e., the cost incurred for the construction of: (i) transmission line from power house to the nearest pooling point including upgradation of pooling substation of State /Central Transmission Utility (ii) ropeways (iii) railway siding, and (iv) communication infrastructure. The strengthening of existing roads/bridges leading to the project will also be eligible for central assistance under this scheme.

b)   The scheme has a total outlay of ₹12,461 crore for cumulative generation capacity of about 31350 MW to be implemented from FY 2024-25 to FY 2031-32.

c)    The scheme will be applicable to all Hydro Power Projects of more than 25 MW capacity including the private sector projects which have been allotted on a transparent basis. This scheme will also be applicable to all Pumped Storage Projects (PSPs) including Captive/Merchant PSPs, provided that the project has been allotted on a transparent basis. A cumulative PSP capacity of about 15,000 MW would be supported under the scheme.

d)    The projects whose Letter of Award of first major package is issued upto 30.06.2028 would be considered under this scheme.

e)   The limit of Budgetary Support for the cost of Enabling Infrastructure has been rationalised to ₹1.0 crore/MW for projects up to 200 MW and ₹200 crore plus ₹0.75 crore per MW exceeding 200 MW, for projects above 200 MW. For exceptional cases the limit of budgetary support may go upto ₹1.5 Crore/MW provided sufficient justification exists.

f)     The Budgetary Support for cost of Enabling Infrastructure will be provided after appraisal of the cost of Enabling Infrastructure by the DIB/PIB and approval of the Competent Authority as per extant guidelines.

Benefits:

This revised scheme would help in faster development of hydroelectric projects, improve infrastructure in the remote and hilly project locations and would provide large number of direct employment to the local people along with indirect employment / entrepreneurial opportunities through transportation, tourism, small-scale business. It would encourage fresh investments into hydro power sector and incentivise timely completion of new projects.