The Ministry of New and Renewable Energy (MNRE) has issued revised guidelines for small hydro power (SHP) schemes. The revised guidelines apply to all SHP projects sanctioned under the previous schemes and aim to address ongoing sectoral challenges faced by the stakeholders. For release of the balance central financial assistance (CFA), projects now need to achieve at least 80 per cent of the projected generation for any one corresponding month as per the detailed project report (DPR). If not, the second installment of CFA will be proportionally reduced. For example, if a project achieves 73 per cent of the projected generation for the cumulative of three consecutive months or cumulative annual generation for one year as envisaged in the DPR, the second installment of CFA will be calculated on a pro-rata basis, with the methodology being provided in the policy document. This methodology will only apply to the calculation of the second installment; there will be no deduction from the eligible first installment of CFA. Additionally, projects must now submit proof of energy generation, including certificates from the state electricity board, power transmission company or other authorised utilities. In cases of delay in commissioning beyond the original scheduled date due to unforeseen circumstances, a grace period of 12 months will be granted. Any further delay will attract a 5 per cent reduction in financial support per quarter, capped at 50 per cent of the second CFA installment, after deducting the eligible first installment of 50 per cent CFA.
For the release of CFA, developers must now meet specific milestones. These include placement of orders for electro-mechanical equipment, disbursement of 50 per cent of the term loan, incurring 50 per cent of the project cost supported by audited expenditure statements, and achieving 50 per cent project progress certified by the respective state nodal agency. After commissioning, developers must undergo physical verification and submit certificates confirming that major equipment complies with Indian or international standards. For the second or final CFA installment, documents such as the commissioning certificate, utilisation certificate, audited financials, and three-month generation data are mandatory.
Furthermore, projects must be completed within five years from the date of contract award. In case of delays, extensions may be granted by the MNRE Secretary on a case-by-case basis if 50 per cent physical progress has been achieved. However, no extension will be allowed beyond seven years. If project completion is delayed beyond the approved period, the financial support may be restricted to funds already released or recalled with interest, depending on the case. Certification and performance testing must be carried out by institutions such as IIT Roorkee or Jadavpur University or other bodies designated by the MNRE. All other provisions of the previous SHP guidelines remain unchanged, and any further relaxations will be at the discretion of the MNRE.
