India to invest $1b in Arunachal hydropower

India plans to invest $1 billion to expedite the construction of 12 hydropower stations in Arunachal Pradesh, a move that may heighten tensions with China, which claims the region as part of southern Tibet.

The federal finance ministry, led by Nirmala Sitharaman, recently approved up to 7.5 billion rupees ($89.85 million) in financial assistance for each project. Overall, about 90 billion rupees will be allocated for the 12 projects.

The scheme is designed to support northeastern states, helping them finance equity holdings and expedite regulatory clearances, local rehabilitation, and electricity sharing negotiations.

The hydropower plans are expected to be announced in the 2024–2025 federal budget on July 23.

Last August, the government awarded contracts to state-run firms NHPC, SJVNL, and NEEPCO for constructing 11.5-gigawatt-capacity plants, involving an estimated investment of $11 billion. These projects were previously assigned to private firms but faced delays.

India has built less than 15 gigawatts of hydropower plants in the last 20 years, compared to significantly higher installations of coal and other renewable energy sources.

The move comes amid concerns over potential Chinese dam construction on the Brahmaputra River, which could impact water flow and trigger flash floods.

Both India and China are enhancing border infrastructure following a deadly clash in the western Himalayas in 2020. Recently, Indian Foreign Minister Subrahmanyam Jaishankar met his Chinese counterpart Wang Yi in Kazakhstan to discuss resolving border issues.

Attribution: Reuters.