MNRE Cancels Funding of 22 Small Hydro Power Projects

The Ministry of New and Renewable Energy (MNRE) has cancelled the financial assistance proposals of 22 small hydro power (SHP) projects across the country.

These projects, with a cumulative capacity of around 175 MW, will not receive any financial support from the government as the project developers did not submit the desired documents pertaining to their projects despite repeated requests from this ministry.

Earlier in May 2019, the MNRE had cancelled the 53 SHP proposals because they had not submitted any progress report after applying for central financial assistance (CFA) before 2014. As many as 134 small hydro developers had applied for CFA before 2014, of which grant approvals for around 100 plants have been cancelled.

The government provides 30 percent of actual cost restricted within an upper ceiling of Rs five crore as financial support to small hydro developers. Usually, 50 percent of the financial assistance is provided to the developer against bank guarantee after the completion of 50 percent civil work and placement of order for electro-mechanical equipment.

The remaining is released after the completion, provided they generate at least 80 percent of projected electricity for three months straight. The programme is essentially driven by private investment. The current installed hydro capacity is 4,648 MW. The identified potential for power generation from small hydro projects across the country is around 21,135 MW.