The Centre is planning to create a hydro-development fund to give a push to stalled hydro projects facing cost overruns owing to delays. While the Cabinet Committee on Economic Affairs (CCEA) was deliberating over the fund size, sources in the Central Electricity Authority (CEA) said the fund size could be Rs 16,000 crore, with Rs 10,000 crore drawn from the National Clean Energy Fund (NCEF). The rest is likely to be sourced from the Power System Development Fund (PSDF).
The fund is likely to be created in another two-three months following which all central, state and private-sector hydro projects will be brought under the renewable category.
“Bringing hydro-generation units under the renewable category would mean extending all incentives to the hydro-power projects, which the renewable projects are entitled to,” K K Arya, member hydro, CEA, said on the sidelines of a CII energy conclave.
The incentives would include benefits of interest subvention and mandatory hydro-power purchase by state discoms, which in a way would provide financial support and create a market for hydro-power generators, Arya said.
Though the benefits of the incentive will be extended to all existing and stalled hydro-power projects, the hydro fund will be utilised for stalled hydro power projects only. Currently, hydro projects aggregating more than 13,000 MW are stalled.