Union Cabinet Approves Central Aid for State Equity in North East Hydro Projects
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SHIMLA: 28.08.2024
The Union Cabinet chaired by the Hon’ble Prime Minister Sh. Narendra Modi has approved the proposal of the Ministry of Power for providing Central Financial Assistance (CFA) to State Governments of North Eastern Region (NER) towards their equity participation for development of Hydro Electric Projects in NER through Joint Venture collaboration between State entities and CPSEs.
SJVN Limited, has signed Memorandum of Agreement (MoA) with Government of Arunachal Pradesh for executing five run-of-the-river scheme hydro projects of 5097 MW in the state through Joint Venture mode. These projects are 3097 MW Etalin, 680 MW Attunli, 500 MW Emini, 420 MW Amulin and 400 MW Mihumdon Hydo Electric Projects. Out of these five projects, Etalin and Attunli HEPs are in advanced stages of clearances. Construction of these two projects shall involve total investment of around Rs 44,000 crores and would add about 15,787 million units of electricity generation annually.
The scheme approved by the Union Cabinet has an outlay of ₹ 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 North Eastern Region from the total outlay of the Ministry of Power. The scheme provides for formation of a Joint Venture (JV) Company for all the projects of a Central PSU with the State Govt.
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 ₹ 750 Crore per project. The cap of ₹ 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.
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 in a more equitable manner. The issues such as land acquisition, rehabilitation & resettlement and local law & order issues would be reduced with State Governments becoming stakeholders. This would avoid time and cost over-run of the projects.
This scheme shall play a significant role in harnessing the hydro power potential of North East. It would bring huge investment in the North Eastern Region and would provide large number of direct employment to the local people along with indirect employment / entrepreneurial opportunities through transportation, tourism, small-scale business. Development of hydroelectric projects shall also contribute towards realization of India’s Nationally Determined Contribution (INDC) of establishing 500 GW renewable energy capacity by 2030 and would help integration of RE sources in the grid thus enhancing flexibility, security and reliability of the national grid.
The hydro projects being developed by SJVN in Arunachal Pradesh on completion would usher in an era of overall socio-economic development by strengthening infrastructure such as roads & bridges, community assets, health care services, women empowerment, skill development & education, generating multiple avenues of employment, sustainable development etc along with added benefits to Project Associated Families.
In August and December-2023, Government of Arunachal Pradesh have signed MoAs with various CPSUs namely NHPC, NEEPCO, SJVN and THDCIL for development of 13 Hydroelectric Projects in the State aggregating to total 12.7 GW. In line with above, this step of providing Central Financial Assistance to north eastern states in the form of their equity in JV formation for development of Hydro Projects in NER will be another step in our journey towards Viksit Bharat.
