The Cabinet on Wednesday cleared a Rs 2,584.6-crore small hydro power scheme to add 1,500 MW capacity, making a renewed push to scale up decentralised renewable energy in remote & underserved regions.
The Small Hydro Power Development Scheme for FY26-31 is expected to unlock Rs 15,000 crore in investments, with a focus on tapping hydro potential in hilly, Northeastern and border areas, where grid connectivity remains limited.
Border District Incentives
The scheme covers projects in the 1-25 MW range and provides higher financial support for projects in the Northeast and border districts — up to Rs 3.6 crore per MW (30% of project cost), capped at Rs 30 crore per project. Other states will receive up to Rs 2.4 crore per MW (20%), capped at Rs 20 crore. Of the total outlay, Rs 2,532 crore has been earmarked for project support.
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The government said the initiative will help develop projects in “remote and difficult-to-reach locations,” while ensuring 100% domestic sourcing of plant and machinery, aligning with Atmanirbhar Bharat goals.
Economic Multiplier
The scheme is expected to generate 5.1 million person-days of employment during construction, along with long-term jobs in operations and maintenance. Industry termed the move timely amid global energy uncertainties. “The approval…marks a targeted push towards decentralised renewable energy in the wake of geopolitical uncertainty concerning oil and gas supply chain,” said Ranjeet Mehta, CEO & secretary general, PHDCCI.
The Cabinet has also approved Rs 30 crore to support preparation of detailed project reports for around 200 projects, creating a pipeline for future development.
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Officials said the scheme will help revive the small hydro sector, boost local investment in rural areas, and expand clean energy capacity with project lifespans of 40-60 years.
TOPICSHydropowerThis article was first uploaded on March nineteen, twenty twenty-six, at fifty-seven minutes past one in the night.