The Small Hydro Power (SHP) Development Scheme for the period FY 2026-27 to FY 2030-31 was approved by the Union Cabinet, with a total financial outlay of ₹2,584.60 crore. This initiative aims to add approximately 1,500 MW of clean energy capacity and is expected to attract roughly ₹15,000 crore in private and public investment
What are key features of Small Hydro Power (SHP) Development Scheme?
| Scheme Component | Features |
|---|---|
| Objective | To tap small hydro potential in remote and difficult areas, especially hilly, North Eastern and border states |
| Duration | FY 2026–27 to FY 2030–31 |
| Outlay | ₹2,584.60 crore |
| Targeted Projects | • Support SHPs of 1–25 MW capacity across states |
| Regional Focus | • Prioritises development of SHP in North Eastern States, hilly regions, and districts with international borders due to their high untapped potential. |
| Target Capacity Addition | Approximately 1500 MW |
| Central Financial Assistance (CFA) | • North Eastern & border districts: ₹3.6 crore per MW or 30% of project cost (whichever is lower), capped at ₹30 crore per project |
| • Other states: ₹2.4 crore per MW or 20% of project cost (whichever is lower), capped at ₹20 crore per project | |
| DPR Support | Incentives for preparing Detailed Project Reports for around 200 projects |
| Outlay Allocation | • ₹2,532 crore for projects |
| • ₹30 crore for DPR preparation support | |
| Investment & Economic Impact | |
| Investment Impact | Expected to mobilise ₹15,000 crore investment |
| Economic Benefits | • Promotes investment in remote areas |
| • Supports indigenous manufacturing (Atmanirbhar Bharat) | |
| Employment Generation | • 51 lakh person-days during construction |
| • Additional employment in operation and maintenance | |
| Environmental Benefits | • Minimal land acquisition |
| • Avoids deforestation and displacement | |
| Overall Significance | |
| • SHP projects are being decentralized in nature, the requirement of long transmission line is minimal, which also reduces the transmission losses. | |
| • Help to rejuvenate the SHP sector and in exploiting the available potential at a much faster pace. | |
| • Most small hydro plants have an operational lifespan of 40 to over 60 years, ensuring long-term energy security. | |
| • SHP projects are environmentally sustainable, as they avoid large-scale land acquisition, deforestation, and displacement of communities. | |
| • Promote socio-economic development of remote areas by boosting local investment, apart from creating long-term employment with project lifespans typically ranging from 40 to over 60 years. |