The Union Power Ministry is no longer looking at formulating a new scheme for reviving hydropower projects in the country.

Minister of State (Independent Charge) for Power and New and Renewable Energy RK Singh told the Lok Sabha, “At present, the government has no proposal to launch any new scheme for hydropower projects in the country.”

Singh was responding to a query on whether the government proposed to launch any new scheme for hydropower projects in the country.

Does this mean that the proposal for Expenditure Finance Committee consideration for revival of hydropower sector uploaded on the Power Ministry’s website in June last year is no longer on the table? It would mean so, according to sources.

The policy had involved a financial implication of ₹16,709 crore for 40 projects with a capacity of 11,639 MW.

This response is starkly opposite to the earlier position that the government has had on a scheme for aiding stressed hydropower projects. According to the proposal, all hydropower (irrespective of size) will be categorised as Renewable Energy. Further, the scheme for revival of hydro power sector had provided for a 4 per cent interest subvention during the construction period (maximum 7 years) and 3 years post the date of commercial operations (COD) to all hydropower projects above 25 MW. This benefit will be extended for all projects attaining COD for up to 5 years after the notification of this policy.

While the scheme for aiding Hydropower projects is out of the picture, a policy for the same is very much still in the offing. A government official told BusinessLine , “The scheme and policy for Hydropower projects are two different things. The scheme has financial implications while a policy does not. The hydropower policy is very much near the final stages of completion and awaiting the approval of the Union Cabinet. The policy will mandate a Hydropower purchase obligation on power distribution companies.”

In November last year, speaking at an Assocham event, Singh had said “The (hydropower) policy is in the final stages and we will be taking it for Cabinet approval in a few days…There is a suggestion with the Ministry of Power to increase the loan period and this itself will make hydropower much cheaper.”

“It may take 10 days for the approval,” Singh had added.

Late in December last year, an official statement said that soon the new hydro power policy will be formulated.

During March this year, in its report tabled in the Parliament, the Standing Committee on Energy had also asked the Ministry of Power to formulate a new hydro power policy.