The Union Cabinet chaired by the Prime Minister Narendra Modi has approved the proposal of the MoP for providing Central Financial Assistance (CFA) to the State Governments of North Eastern Region (NER) towards their equity participation for development of Hydro Electric Projects in the NER through Joint Venture (JV) Collaboration between State entities and CPSUs.
This scheme has an outlay of Rs. 4,136 crores to be implemented from FY 2024-25 to FY 2031-32. A cumulative hydro capacity of about 15,000 MW would be supported under the scheme. The scheme would be funded through 10% Gross Budgetary Support (GBS) for NER from the total outlay of the MoP.
The Scheme formulated by the Ministry of Power provides for formation of a Joint Venture (JV) Company for all the projects of a Central PSU with the State Govt.
The grant towards equity portion of the State Government of NER would be capped at 24% of the total project equity subject to a maximum of Rs.750 crore per project. The cap of Rs.750 crore for each project would be revisited, if required, on a case-to-case basis. The ratio of equity of the CPSU and the State Government in the JV would be maintained at the time of disbursing of the grant.
Central Financial Assistance would be limited to only viable Hydro Electric Projects. States would be required to waive / stagger free power and / or reimburse SGST to make the project viable.
