The Cabinet on Wednesday approved Power Ministry’s proposal for providing Central financial assistance to States in North East towards their equity participation for hydroelectric projects through joint venture (JV) between State entities and Central public sector undertakings (CPSUs).
“This scheme has an outlay of ₹4,136 crore to be implemented from FY25 to FY32. A cumulative hydro capacity of about 15,000 MW would be supported under the scheme. The scheme would be funded through 10 per cent Gross Budgetary Support (GBS) for North Eastern Region (NER) from the total outlay of the Ministry of Power,” an official statement said.
The scheme formulated by the Power Ministry provides for formation of a JV company for all the projects of a CPSU with the State government, it added.
The grant towards the equity portion of the State government of NER would be capped at 24 per cent 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.
Hydroelectric projects
The Central financial assistance would be limited to only viable hydroelectric projects. States would be required to waive/ stagger free power and/ or reimburse SGST to make the project viable.
With the introduction of this scheme, participation of the State governments in 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.