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Power Minister R K Singh today said the hydro power policy is in the final leg and will soon be sent for the Cabinet approval.
"The hydro policy is in final stages. It will soon go for Cabinet for approval," Singh said while addressing roundtable on hydro power organised by Assocham. Asked how soon the policy will be sent for the Cabinet approval, the minister said, "it may take ten days".
The minister also assured the industry representatives that he would look into their demands for restructuring debt over stranded hydro projects as well as their refinancing by Power Finanace Corp and Ireda.
As per the draft hydro-power policy, it will aim to provide Rs 16,709 crore support for 40 stalled hydel projects with 11,639 MW capacity, and to classify all such ventures as renewable energy. Once it is approved, the distinction between large and small hydro plants will go, which would help India to achieve clean power capacity of 225 GW by 2022.
At present, a hydro power project of up to 25 MW is classified under renewable energy and is entitled to various incentives provided by the government. Projects beyond this capacity are not in this category and hence not entitled to the benefits.
India has set an ambitious target of adding 175 GW of renewable energy capacity by 2022, which includes 100 GW of solar, 60 GW from wind, 10 GW from bio-power and 5 GW from small hydro-power (up to 25 MW capacity each).
Under the policy, the government will provide interest subvention of 4 per cent during construction for up to 7 years and for 3 years after the start of commercial operation to all hydro power projects above 25 MW.
It is proposed that the funding for this policy will come from coal cess or national clean energy fund or non-lapsable central pool of resources for Northeastern states for eight years till 2024-25.
A Hydro Power Fund would be created under the power ministry for providing funds to the projects under the policy. The policy also provides for Hydro Purchase Obligation (HPO) for hydro projects of over 25 MW capacity. Under this, the discoms would be mandated to buy a proportion of power from these plants.
However, this benefit will be available to those hydro power plants, which would be able to begin commercial operations after five years of notification of this policy.
The policy will also mandate power ministry to engage with bankers and financial institutions for modifying lending terms and conditions for hydro power projects.
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