Page 45 - Policy Economic Report - September 2024

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

The Government of India has been taking several policy initiatives to address the issues impeding Hydro
Power development, viz., remote locations, hilly areas, lack of infrastructure etc. To promote the hydro
power sector and to make it more viable, the Cabinet in March, 2019, approved measures, namely
declaring large hydro power projects as Renewable Energy sources, Hydro Power Purchase Obligations
(HPOs), tariff rationalization measures through escalating tariff, budgetary support for flood moderation
in storage HEP and budgetary support for the cost of enabling infrastructure, i.e., construction of roads
and bridges.

For the faster development of Hydro Electric Projects and improvement of infrastructure in the remote
project locations, the following modifications have been made in the earlier scheme:

a) To widen the ambit of the Budgetary Support for cost of Enabling Infrastructure by including four more
items apart from construction of roads and bridges i.e., the cost incurred for the construction of: (i)
transmission line from power house to the nearest pooling point including upgradation of pooling
substation of State /Central Transmission Utility (ii) ropeways (iii) railway siding, and (iv) communication
infrastructure. The strengthening of existing roads/bridges leading to the project will also be eligible for
central assistance under this scheme.

b) The scheme has a total outlay of Rs.12,461 crore for cumulative generation capacity of about 31350
MW to be implemented from FY 2024-25 to FY 2031-32.

c) The scheme will be applicable to all Hydro Power Projects of more than 25 MW capacity including the
private sector projects which have been allotted on a transparent basis. This scheme will also be applicable
to all Pumped Storage Projects (PSPs) including Captive/Merchant PSPs, provided that the project has
been allotted on a transparent basis. A cumulative PSP capacity of about 15,000 MW would be supported
under the scheme.

d) The projects whose Letter of Award of first major package is issued upto 30.06.2028 would be
considered under this scheme.

e) The limit of Budgetary Support for the cost of Enabling Infrastructure has been rationalized to Rs.1.0
crore/MW for projects up to 200 MW and Rs.200 crore plus Rs.0.75 crore per MW exceeding 200 MW,
for projects above 200 MW. For exceptional cases the limit of budgetary support may go upto Rs.1.5
Crore/MW provided sufficient justification exists.

f) The Budgetary Support for cost of Enabling Infrastructure will be provided after appraisal of the cost of
Enabling Infrastructure by the DIB/PIB and approval of the Competent Authority as per extant guidelines.

Benefits

This revised scheme would help in faster development of hydroelectric projects, improve infrastructure
in the remote and hilly project locations and would provide large number of direct employment to the
local people along with indirect employment / entrepreneurial opportunities through transportation,

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