The Union Cabinet on Wednesday approved central financial assistance to the state governments of the north eastern regions towards their equity participation for development of 15 gigawatt (GW) of hydro electric projects. The projects will be developed through a joint venture collaboration between state entities and central Public Sector Undertakings.
The scheme has an outlay of Rs 4,136 crore and will be implemented from FY25 to FY32. The scheme would be funded through 10% Gross Budgetary Support for the north eastern region from the total outlay of the Ministry of Power. The scheme provides for formation of a joint venture company for all the projects of a central PSU with the state government, the government said.
The grant towards the equity portion of the state government of the north east region 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.
The Central Financial Assistance would be limited to only viable hydro electric projects and states would be required to waive or stagger free power and reimburse State Goods and Services Tax 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 in a more equitable manner,” the power ministry said in a statement. “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.”
The government expects the scheme to bring huge investment in the north eastern region and provide direct employment to a large number of local people while encouraging many entrepreneurial opportunities. “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 renewable energy sources in the grid thus enhancing flexibility, security and reliability of the national grid,” said the government.
From: financialexpress
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