India plans to spend $1 billion to expedite the construction of 12 hydropower stations in the northeastern Himalayan state of Arunachal Pradesh, two government sources said. This move could raise tensions with China, which lays claims to the region.
The federal finance ministry under Nirmala Sitharaman recently approved up to 7.5 billion rupees ($89.85 million) in financial assistance to each hydropower project in the northeastern region. Under the scheme, about 90 billion rupees will likely be allotted for the 12 hydropower projects in Arunachal Pradesh.
The plans for the hydropower stations are expected to be announced in the 2024/2025 federal budget that Prime Minister Narendra Modi’s government will unveil on July 23. The sources declined to be named as the information remained confidential.
Last August, the government awarded contracts to state-run firms NHPC, SJVNL, and NEEPCO for the construction of the 11.5-gigawatt-capacity plants, entailing an estimated investment of $11 billion. These power plants were earlier enlisted with private sector firms but remained non-starters due to various reasons.
India has built less than 15-gigawatt hydropower plants in the last 20 years, while installations of new coal and other renewable sources of energy were nearly 10 times the new hydropower projects.
The move to accelerate hydropower development in the Himalayan region claimed by China is likely to increase tensions between the two countries, which have a long-standing border dispute in the area. India’s efforts to bolster its infrastructure and energy security in the strategically important region could be seen as a challenge to China’s territorial claims.