With a total outlay of ₹12,461 crore, the scheme will be implemented from FY25 to FY32 and is expected to support the development of hydropower projects with a cumulative generation capacity of around 31,350 MW.
With the latest modifications, the scheme aims to further accelerate hydropower projects by expanding the scope of budgetary support to include more infrastructure components. This includes the construction of transmission lines from powerhouses to pooling points, ropeways, railway sidings, and communication infrastructure. The strengthening of existing roads and bridges leading to the projects will also be eligible for central assistance under the scheme.
The government has been taking numerous steps to overcome the challenges hindering hydropower development, particularly in remote and hilly regions. These areas often face infrastructure bottlenecks such as a lack of access roads, transmission lines, and other essential facilities. In 2019, the government categorised large hydro projects as renewable energy sources and introduced Hydro Power Purchase Obligations (HPOs) to rationalise tariffs and provide budgetary support for flood moderation in storage HEPs.
The revised scheme introduces several critical changes to ensure the faster development of hydropower projects:
- Expanded Scope of Infrastructure Support: In addition to roads and bridges, the budgetary support will now cover transmission lines, ropeways, railway sidings, and communication infrastructure. This broader support will facilitate easier access to remote project sites.
- Financial Outlay and Capacity: The total budgetary allocation for the scheme is ₹12,461 crore, which will support the development of hydropower projects with a cumulative generation capacity of around 31,350 MW. This includes both large hydropower projects and Pumped Storage Projects (PSPs), with 15,000 MW of PSP capacity receiving support under the scheme.
- Eligibility Criteria: The scheme will be applicable to all hydropower projects of more than 25 MW capacity, including private sector projects that have been allotted transparently. Additionally, the projects must issue their first major package by June 30, 2028, to qualify for the scheme.
- Budgetary Support Cap: For projects up to 200 MW, the budgetary support is set at ₹1 crore per MW, while projects exceeding 200 MW will receive ₹200 crore plus ₹0.75 crore per MW for the additional capacity. In exceptional cases, the budgetary support can go up to ₹1.5 crore per MW with proper justification.
The modifications to the budgetary support scheme are expected to encourage fresh investments in the hydropower sector and drive timely project completion. Additionally, the development of infrastructure in remote and hilly regions will create numerous employment opportunities, both direct and indirect. Local communities are set to benefit from jobs related to construction, transportation, tourism, and small-scale businesses.
The government’s push to incentivise hydropower projects not only aligns with India’s renewable energy goals but also addresses the infrastructure gaps that have long impeded progress in the sector. By supporting both large hydropower projects and PSPs, the scheme will contribute to a more sustainable energy future and promote economic development in underserved regions.