Representative photo
New Delhi: The Centre will financially assist the development of hydroelectric projects in the Northeastern Region (NER) and the Union Cabinet today approved the proposal of the Ministry of Power in this regard.
The Ministry of Power had proposed providing Central Financial Assistance (CFA) to the State Governments of the Northeastern Region towards their equity participation in the development of hydroelectric projects in the NER through joint venture (JV) collaboration between State entities and Central Public Sector Undertakings.
This scheme has an outlay of Rs. 4136 crore to be implemented from FY 2024-25 to FY 2031-32. A cumulative hydro capacity of about 15000 MW would be supported under the scheme. The scheme would be funded through 10% Gross Budgetary Support (GBS) for the Northeastern Region from the total outlay of the Ministry of Power.
The Scheme formulated by the Ministry of Power provides for the formation of a Joint Venture Company for all the projects of Central Public Sector Undertakings (CPSU) with the State Government.
The grant towards the equity portion of the State Government of NER would be capped at 24% of the total project equity subject to a maximum of Rs.750 crore per project. The cap of Rs.750 crore for each project would be revisited, if required, on a case-to-case basis. The ratio of equity of the CPSU and the State Government in the JV would be maintained at the time of disbursing of the grant.
Central Financial Assistance would be limited to only viable Hydro Electric Projects. States would be required to waive/stagger free power and/or reimburse State Goods and Services Tax (SGST) to make the project viable.
With the introduction of this scheme, participation of the State Governments in the hydro development shall be encouraged and risk and responsibilities shall be shared more equitably, a cabinet note said. The issues such as land acquisition, rehabilitation and resettlement and local law and order issues would be reduced with State Governments becoming stakeholders. This would avoid time and cost overruns of the projects, it added.
This scheme shall play a significant role in harnessing the hydropower potential of the Northeast. It would bring huge investment in the Northeastern Region and would provide a large number of direct employment to the local people along with indirect employment/entrepreneurial opportunities through transportation, tourism, and small-scale business.
Development of hydroelectric projects shall also contribute towards the realization of India’s Nationally Determined Contribution (INDC) of establishing 500 GW renewable energy capacity by 2030 and would help the integration of Renewable Energy sources in the grid thus enhancing flexibility, security and reliability of the national grid.
It may be mentioned that to promote the hydropower sector and to make it more viable, the Cabinet, on March 7, 2019, approved measures, such as declaring large hydropower projects as Renewable Energy sources, Hydro Power Purchase Obligations (HPOs), tariff rationalization measures through escalating tariff, budgetary support for flood moderation in storage Hydro Electric Power (HEP) and budgetary support for the cost of enabling infrastructure, such as construction of roads and bridges.
– global bihari bureau
Image by Yevhen Paramonov from Pixabay
