Centre greenlights Rs. 4,136 Cr scheme for hydroelectric projects in Northeast

Guwahati, Aug 28: The Union Cabinet approved Central Financial Assistance (CFA) on Wednesday for the development of hydroelectric projects in the Northeastern states through joint venture (JV) collaborations between state entities and Central Public Sector Undertakings (CPSUs).

With an outlay of Rs. 4,136 crore, the scheme will be implemented from FY 2024-25 to FY 2031-32, supporting a cumulative hydro capacity of approximately 15,000 MW.

The Ministry of Power will fund the scheme through 10% Gross Budgetary Support (GBS) allocated for the region from its total outlay.

According to a notification, a JV company will be established for all projects involving a central PSU and the state government.

The grant towards the equity portion for the Northeast’s state governments will be capped at 24% of the total project equity, with a maximum of Rs. 750 crore per project.

This cap may be adjusted on a case-by-case basis if needed. The equity ratio between the CPSU and the state government in the JV will be maintained when the grant is disbursed.

The CFA will be provided for viable hydroelectric projects. To ensure project viability, states may need to waive or stagger free power and/or reimburse SGST.

This scheme aims to encourage state governments to participate in hydro development, promoting a more equitable sharing of risks and responsibilities.

The aid is expected to play a crucial role in harnessing the hydro power potential of the Northeast.