The Union Cabinet on Wednesday approved a revised scheme for budgetary support to hydro electric projects (HEPs) with an allocation of Rs. 12,461 crore. This scheme, set to run from FY 2024-25 to FY 2031-32, aims to enhance infrastructure and support the development of hydro power in India.

The scheme addresses major challenges such as remote locations and inadequate infrastructure by broadening its scope to cover additional costs. This includes funding for the construction of transmission lines, upgrading pooling substations, and developing ropeways, railway sidings, and communication infrastructure. It also supports the strengthening of existing roads and bridges leading to project sites.

Over the next eight years, the scheme is set to support hydro power projects with a cumulative generation capacity of approximately 31,350 MW. It applies to all hydro projects over 25 MW, including those in the private sector, awarded with a total capacity of around 15,000 MW.

Budgetary support limits have been revised to Rs. 1 crore per MW for projects up to 200 MW, and Rs. 200 crore plus Rs. 0.75 crore per MW for projects above 200 MW, with potential increases up to Rs. 1.5 crore per MW in exceptional cases.

The scheme also incorporates a rigorous approval process, where budgetary support will be granted following cost appraisals by the Department of Investment and Public Asset Management (DIB) and Public Investment Board (PIB), and subsequent approval by the Competent Authority.