The Finance Ministry’s Expenditure Finance Committee has approved a Rs 2,500 crore proposal to support small hydro power projects in India.

This initiative aims to help double the country’s hydro power capacity to 10 GW over the next decade. Developers of projects up to 25 MW in capacity will be eligible for Central financial assistance covering 20-30 percent of the benchmark costs. Currently, India has just over five GW of operational small hydro power projects. The Ministry of New and Renewable Energy (MNRE) oversees this segment and will prepare a Cabinet note for approval.

Small hydro projects, often canal-based or run-of-river types, require less land, have a longer lifespan, and are environmentally less disruptive. They can also provide local irrigation, create work opportunities, and reduce transmission losses as they are typically located near consumption centers. “Hydropower projects are capital-intensive and need support during the initial stages,” a source explained.