The two organisations signed a memorandum of understanding (MoU) for technical and financial assistance. The projects for which the rehabilitation, modernisation and upgradation exercise will be undertaken would be identified by PFC along with the state power utilities. Speaking to reporters, the newly appointed chairman and managing director, PFC, AA Khan said only those projects whose equipment was supplied by Japanese manufacturers and had been in operation for over 20 years would be covered under the MoU.

The study group and PFC would also ensure the flow of adequate amounts of financial assistance from Japan for the hydro power projects. It is also proposed that the two would work together in developing a master plan for new hydro electric projects aggregating up to 5000 mw. Power Secretary AK Basu said the government had asked the Central Electricity Authority (CEA) to undertake a study of the hydel power potential in the country.

The report of CEA would enable the government to offer large scale hydel power projects for private sector participation. The report would also prioritise the projects based on various factors to enable speedy implementation. Power secretary said it would be a great achievement if the country could achieve a thermal-hydel mix of thirty per cent over the next few years. India had a total hydel power capacity potential of 150,000 mw which could be tapped to yield 84,000 mw at a plant load factor (PLF) of nearly 60 per cent.

The PFC chairman has opined that there is a need to correct the imbalance between the thermal and hydel mix in the country which currently stands at 77:23 per cent.PFC has lent Rs 660 crore for various hydel projects in the country. The loans have been sanctioned for a total of 53 renovation and upgradation schemes. The corporation has identified R&U as a thrust area thus lending up to 70 per cent of the project cost at a lower rate of interest as compared to other modes of generation.

Many of the hydel power projects which have been in existence for more than three decades have outlived their utility and are susceptible to frequent failures and shutdowns.