India plans $1 billion investment for hydropower projects in Arunachal Pradesh
New Delhi: India is likely to allocate $1 billion to accelerate the construction of 12 hydropower stations in Arunachal Pradesh, a move likely to heighten tensions with China, which claims the region, Reuters reported.
Finance Minister Nirmala Sitharaman has recently approved up to 7.5 billion rupees ($89.85 million) in financial assistance for each hydropower project in the northeastern region, the report said.
Nearly 90 billion rupees are expected to be allocated for the 12 projects in Arunachal Pradesh, Reuters reported citing sources with direct knowledge of the matter revealed.
This scheme aims to support northeastern states by financing equity holdings in the hosted projects.
Gaining the cooperation of state governments typically aids in expediting regulatory clearances, local rehabilitation, and negotiations on electricity sharing with the host state.
The hydropower project plans are expected to be announced in the 2024/2025 federal budget, which Prime Minister Narendra Modi's government will present on July 23.
The sources requested anonymity due to the confidential nature of the information.
Last August, the government awarded contracts to state-run firms NHPC, SJVNL, and NEEPCO to construct 11.5 gigawatts of hydropower capacity, involving an estimated investment of $11 billion.
These companies did not respond to requests for comments.
These projects were previously assigned to private sector firms but remained inactive due to various issues.
Over the past 20 years, India has built less than 15 gigawatts of hydropower plants, while the installation of new coal and other renewable energy sources has been nearly ten times that of new hydropower projects.
India and China share a 2,500 km (1,553 mile) largely un-demarcated border, over which they fought a war in 1962.
India asserts that Arunachal Pradesh is an integral part of the country, while China claims it as part of southern Tibet and has opposed other Indian infrastructure projects there.
The Indian government is advancing projects in the eastern region amid reports that Beijing could construct dams on the Brahmaputra River, known as the Yarlung Tsangbo in China, which flows from Tibet through Arunachal Pradesh. India fears that Chinese projects in the region could trigger flash floods or cause water scarcity.
Both countries have been enhancing infrastructure along their border regions following clashes in the western Himalayas in 2020, which resulted in the deaths of 20 Indian and at least four Chinese troops.
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