The Ministry of New and Renewable Energy will help developers of stranded small hydropower projects by providing concessional loans through the Indian Renewable Energy Development Agency.

“The government will help the developers of the stranded small hydropower projects through concessional loans extended at an interest rate of up to 2 per cent by IREDA,” a government official told BusinessLine .

IREDA is expected to extend loans for up to 70 per cent of the outstanding amount that project developers owe to the primary lender, another government official said.

Delays in small hydro power projects in the country are largely due to regulatory changes by the Ministry of Environment and Forests, including the introduction of Basin study, which mandates that the entire river be studied as a whole before proceeding with a project.

The delay in projects has hit developers who are facing increasing interest outgo to banks and a delayed return period over the investment.

According to the annual report of the Ministry of New and Renewable Energy, there are 1,075 small hydropower projects aggregating to 4324.86 MW that have been set up in various parts of the country. In addition, 232 projects of about 793.73 MW are in various stages of implementation.

In the 2016 year-end review, the government said that the country added 0.53 GW of power generation capacity from small hydropower projects.

Project potential

Small hydropower projects are those with a capacity between 2 MW to 25 MW. The government estimates a potential of about 20,000 MW of small hydro power projects in India. MNRE has created a database of potential sites of small hydro and 6,474 potential sites with an aggregate capacity of 19,749.44 MW for projects up to 25 MW.

Currently, small hydropower projects less than 25 MW are eligible for benefits for renewable energy that include cheap financing and assured off-take of generated power.

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