Union Cabinet Authorised Budget of ₹4,136 Crore for Development of Hydropower Projects

On August 28, 2024, the Union Cabinet approved a significant equity support of ₹4,136 crore to the North Eastern states to develop hydropower projects. This initiative aims to boost the region’s renewable energy capacity by adding a total of 15,000 MW over the next 8 years.

The cabinet gave its green light to a power ministry proposal for central financial assistance to the northeastern states. This scheme would provide up to a 24% equity stake in hydropower projects developed through joint ventures with the Centre. It is set to be implemented from FY25 to FY32.

The scheme will be funded through 10% of the gross budgetary support allocated to the North Eastern Region from the total outlay of the power ministry. The grant towards the equity portion of the state government will be capped at 24% of the total project equity, subject to a maximum of ₹750 crore per project.

The equity ratio between the central public sector unit and the state government in the joint venture will be maintained at the time of grant disbursement. The grant will be limited to viable hydropower projects, and states will be required to waive off or stagger free power and reimburse state Goods and Services Tax to ensure project viability.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.