Hydro Power Policy 2018-28: Government Funding Declines 34 Pct

Hydro Power Policy 2018-28: Government Funding Declines 34 Pct

The government has revised downwards the proposed size of the Centre’s funding of hydro power projects by way of 4% interest subvention by 34% to Rs 11,049 crore for the 2018-2028 period.

A modified hydro power policy draft being sent to the Cabinet by the power ministry also proposes to limit the benefit of interest subvention to government-owned projects, while private investors will be helped by transfer of funds equivalent to the interest subvention to their buyers, namely, then distribution companies (discoms).

Another change in the draft policy — the initial draft prepared by the ministry in early 2017 — is that infrastructure costs such as construction of roads, bridges, and flood moderation infrastructure that are not directly related to power generation should not be included to calculate electricity tariffs. This will make hydro power more affordable and competitive.

The government will set up a hydro power development fund (HPDF) to provide capital support in the form of interest subvention, sources said. Resources will be pooled from the existing power system development fund, national clean energy fund and non-lapsable central pool of resources (NLCPR) of department of north eastern region (DoNER), they said. Read More…

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