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The Ministry of New and Renewable Energy has issued a revised set of guidelines for Small Hydro Power (SHP) schemes to address challenges faced by stakeholders and to simplify processes. These changes apply to all projects previously sanctioned under the 2009 and 2014 SHP scheme guidelines. A major change relates to how financial support, known as Central Financial Assistance (CFA), is released. Earlier, developers had to report monthly power generation until they reached 80% of projected output for three consecutive months. Now, projects that achieve 80% of the projected output for any single corresponding month can qualify for the full balance CFA. If this condition is not met, the second installment of CFA will be reduced proportionately based on actual generation. Another change is about delays in project commissioning. While a 12-month grace period is allowed for delays due to unforeseen reasons, any additional delay will now reduce financial support by 5% for every quarter, up to a maximum of 50%. This deduction only affects the second installment, and not the first. Project completion timelines have also been revised. Projects must be completed within five years from the date of awarding the contract. If delayed, the Secretary of MNRE may allow extensions based on justifiable reasons, provided 50% of physical progress has been made. No extensions will be given beyond seven years. Further clarity has been provided on the conditions for receiving CFA. To receive the first installment, developers must place orders for electro-mechanical equipment, disburse 50% of their loan, spend at least 50% of the project cost (as shown in audited statements), and achieve 50% project progress, certified by the State Nodal Agency. For the second and final installment, the developer must submit a commissioning certificate, utilization certificate (if the first installment was received), audited expenditure statement, and three months of generation data. Projects with a capacity of 1 MW or less will be physically inspected to check installation and generation. Projects above 1 MW will undergo full testing and performance certification. Performance testing must now be verified by institutions such as IIT Roorkee or other organizations nominated by the Ministry. These steps ensure the technical and quality standards of the equipment used in SHP projects are maintained. Powers to relax any provision of the revised guidelines will rest solely with the Hon’ble Minister of New and Renewable Energy. All other aspects of the previous guidelines remain unchanged. These changes aim to streamline project execution, ensure better monitoring of energy generation, and promote faster rollout of small hydro projects. The updated guidelines were released following consultation with the Department of Expenditure and approved by the Hon’ble Minister of New and Renewable Energy. |
