Rapid Fire
Small Hydro Power Development Scheme
- 20 Mar 2026
- 3 min read
The Union Cabinet has approved the Small Hydro Power (SHP) Development Scheme (FY 2026-27 to FY 2030-31) with an outlay of Rs. 2,584 crore to install approximately 1,500 MW of capacity and revitalize decentralized clean energy.
- Project Scope: The scheme supports small hydro projects with a capacity between 1 MW and 25 MW, focusing on hilly and North Eastern (NE) states as well as districts with international borders.
- Central Financial Assistance (CFA):
- For NE States and Border Districts: Rs. 3.6 crore per MW or 30% of project cost (whichever is lower), with an upper limit of Rs. 30 crore per project.
- Other States: Rs. 2.4 crore per MW or 20% of project cost (whichever is lower), with a cap of Rs. 20 crore per project.
- Proposed Benefits:
- Socio-Economic Impact: It is expected to catalyze Rs. 15,000 crore in private investment and generate 51 lakh person-days of employment during the construction phase.
- It will also stimulate local investment and create sustainable employment in remote areas over project lifespans of 40 to 60 years.
- Atmanirbhar Bharat: The initiative leverages 100% indigenous plant and machinery, strengthening domestic manufacturing in the renewable energy sector.
- Environmental Benefits: SHP projects are environmentally sustainable as they minimize large-scale land acquisition, deforestation, and displacement compared to large dams.
- Technical Advantages: Being decentralized in nature, these projects reduce transmission losses and the need for long-distance transmission infrastructure.
- Socio-Economic Impact: It is expected to catalyze Rs. 15,000 crore in private investment and generate 51 lakh person-days of employment during the construction phase.
- Future Pipeline: An allocation of Rs. 30 crore is set aside to assist agencies in preparing Detailed Project Reports (DPRs) for approximately 200 future projects.
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