The Ministry of Power (MoP) has modified the provision of budgetary support for hydroelectric and Pumped Storage Projects (PSP), with a total outlay of ₹124.6 billion (~$1.48 billion).

The ministry will support projects of a cumulative hydroelectric capacity of 31 GW, including 15 GW of PSP capacity from the financial year 2024-25 to 2031-32.

The budgetary support is capped at ₹10 million (~$119,126)/MW for projects up to 200 MW and ₹2 billion (~$23.81 million) plus ₹7.5 million (~$89,345)/MW for projects exceeding 200 MW, with a potential increase to ₹15 million (~$178,676)/MW for exceptional cases.

The program applies to all hydropower projects of more than 25 MW capacity, including private sector projects allotted on a transparent bidding basis, all PSPs, including captive/merchant PSPs, and projects with letters of award for the first major package issued up to June 2028.

The budgetary support is towards the cost of enabling infrastructure, which will now include the following apart from the construction of roads and bridges:

• The transmission line from the powerhouse to the nearest pooling point, including upgrading pooling substations of the state or central transmission utility.
• Ropeways
• Railway sidings
• Communication infrastructure

Individual projects will receive support for the cost of enabling infrastructure after they are appraised by the Delegated Investment Board or Public Investment Board.

In August, the government issued draft tariff-based bidding guidelines to procure stored energy from existing or under-construction PSPs. The minimum bid capacity for interstate transmission projects is 50 MW, and for intrastate transmission projects, it is 10 MW.

In the same month, the Central Electricity Authority approved two PSPs with a cumulative capacity of 2,600 MW. The approved PSPs were the 600 MW Upper Indravati project in Odisha, which is being developed by the Odisha Hydro Power Corporation, and the 2,000 MW Sharavathy project in Karnataka, which Karnataka Power Corporation is developing.