In a significant move to bolster the energy infrastructure in the North Eastern Region (NER), the Union Cabinet, chaired by Prime Minister Shri Narendra Modi, has approved a proposal by the Ministry of Power to provide Central Financial Assistance (CFA) to state governments in the region for their equity participation in the development of hydroelectric projects. This initiative is set to transform the hydroelectric landscape of the North East, fostering regional development and contributing to India’s renewable energy goals.
The approved scheme, with an outlay of Rs. 4,136 crore, will be implemented over a span of eight years, from FY 2024-25 to FY 2031-32. It aims to support the development of approximately 15,000 MW of hydroelectric capacity in the North East. The funding for this ambitious project will come from the Ministry of Power’s budget, with 10% of the Gross Budgetary Support (GBS) earmarked specifically for the North Eastern Region.
Joint Venture Collaboration for Efficient Project Execution
The scheme envisions the formation of Joint Venture (JV) companies between Central Public Sector Undertakings (CPSUs) and state governments for executing hydroelectric projects. The Central Financial Assistance will cover up to 24% of the state government’s equity in these projects, with a maximum cap of Rs. 750 crore per project. This cap may be revisited on a case-by-case basis if necessary, ensuring that the financial support is tailored to the needs of each project.
Shri R.K. Singh, Minister of Power, emphasized the significance of this collaboration, stating, “By bringing state governments on board as equity partners, we are not only distributing the financial burden but also ensuring that the local challenges—such as land acquisition and resettlement—are managed more effectively. This collaboration will help mitigate risks and prevent time and cost overruns.”
Boosting Regional Development and Employment
The strategic participation of state governments in these projects is expected to minimize issues related to land acquisition, rehabilitation, and local law and order, thereby reducing delays and cost escalations. This approach will also promote a more equitable sharing of risks and responsibilities between the central and state entities.
Moreover, the development of these hydroelectric projects is poised to bring substantial economic benefits to the North Eastern Region. The influx of investment will create numerous direct and indirect employment opportunities for local communities, particularly in sectors such as transportation, tourism, and small-scale businesses. “This initiative will not only harness the untapped hydro potential of the North East but also drive economic growth and provide jobs for local people,” noted an official from the Ministry of Power.
Contributing to India’s Renewable Energy Goals
The scheme is a key component of India’s broader strategy to enhance its renewable energy capacity, contributing to the country’s Nationally Determined Contribution (INDC) of establishing 500 GW of renewable energy capacity by 2030. Hydroelectric power, with its ability to provide grid stability and reliability, plays a crucial role in integrating renewable energy sources like solar and wind into the national grid.
The government’s commitment to promoting the hydroelectric sector is not new. In 2019, the Cabinet approved several measures to support the sector, including the classification of large hydro projects as renewable energy sources, the introduction of Hydro Power Purchase Obligations (HPOs), and budgetary support for infrastructure such as roads and bridges. These initiatives laid the groundwork for the current scheme, which is expected to further accelerate the development of hydro power in the North East.
A Bright Future for Hydro Power in the North East
With this new scheme, the government is taking a decisive step towards unlocking the hydroelectric potential of the North Eastern Region. By fostering collaboration between central and state entities, the initiative aims to overcome longstanding challenges and ensure the timely and cost-effective execution of hydro projects. As India continues its journey towards becoming a global leader in renewable energy, the North East is set to play a pivotal role in achieving the nation’s ambitious energy targets.
This comprehensive approach not only strengthens the region’s energy infrastructure but also paves the way for sustainable development, ensuring that the benefits of these projects reach every corner of the North East. As the scheme rolls out in the coming years, the North Eastern Region can look forward to a future of enhanced connectivity, economic growth, and energy security.
Source : PIB
