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, would 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”, the MNRE said.
A senior MNRE official told FE that “apart from ensuring we make accurate provisions in our budget for such subsidy disbursal, the government wants to caution the developer community that compliance norms cannot be taken lightly”. Earlier in May, 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% of actual cost—restricted within an upper ceiling of Rs. 5 crore—as financial support to small hydro developers. Hydro projects up to 25 MW station capacities are categorised under SHP.
Usually, 50% of the financial assistance is provided to the developer against bank guarantee after the completion of 50% civil work and placement of order for electro-mechanical equipment. The remaining is release after the completion, provided they generate at least 80% of projected electricity for three months straight.
Most of its potential is in the Himalayan states as river-based projects and in other states on irrigation canals. 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.