Cabinet Clears Rs 2,584-Crore Small Hydro Power Scheme to Add 1,500 MW Capacity | Kashmir Life

SRINAGAR: The Union Cabinet, chaired by Narendra Modi, has approved the Small Hydro Power (SHP) Development Scheme for the period 2026–27 to 2030–31, with a total outlay of Rs 2,584.60 crore aimed at adding around 1,500 MW of capacity across the country.

The scheme targets small hydro projects ranging between 1 MW and 25 MW, with a special focus on hilly and northeastern states, as well as districts along international borders. In these regions, central financial assistance of up to Rs 3.6 crore per MW or 30 per cent of the project cost—capped at Rs 30 crore per project—will be provided. For other states, support will be limited to Rs 2.4 crore per MW or 20 per cent of the project cost, with a ceiling of Rs 20 crore per project.

Out of the total allocation, Rs 2,532 crore has been earmarked for project development, with the scheme expected to attract investments worth Rs 15,000 crore in the small hydro sector. The initiative is also aligned with the government’s self-reliance push, as it aims to utilise domestically manufactured plant and machinery.

Additionally, Rs 30 crore has been allocated to support the preparation of detailed project reports (DPRs) for nearly 200 prospective projects, creating a future pipeline for the sector.

The government estimates that the scheme will generate around 51 lakh person-days of employment during construction, along with long-term jobs in operations and maintenance. Officials said the decentralised nature of small hydro projects will reduce transmission losses while promoting clean energy generation and socio-economic development in remote regions.