With an investment of Rs 2,584.60 crore, the Small Hydro Power Development Scheme (2026-31) aims to increase capacity by 1,500 MW, focusing on reliable power generation in challenging terrains. This initiative is a significant move by the government to leverage the strengths of small hydropower in India’s clean energy transition.
India holds a substantial small hydro power potential of 21,133.61 MW across 7,133 identified sites. Currently, about 24.5% of this capacity, equivalent to 5,171 MW, has been utilized, indicating steady progress in the sector.
The remaining untapped potential of over 15,960 MW presents a significant opportunity for accelerated development through targeted policy backing and collaboration between the public and private sectors. The Union Cabinet has approved this scheme to facilitate the establishment of small hydro projects ranging from 1-25 MW capacity across various states.
The scheme is particularly beneficial for states with hilly terrains and the northeastern regions, which hold immense potential for small hydro projects. By unlocking 1,500 MW of new capacity, the focus is on regions with untapped small hydro potential, aiming to address energy access challenges and reduce reliance on traditional fuels.
This initiative is expected to attract investments of approximately Rs 15,000 crore in the small hydro sector. It will also encourage the use of local equipment, aligning with the vision of Atmanirbhar Bharat and bolstering domestic manufacturing and supply chains.
To ensure sustained growth in the sector, the scheme includes provisions for the preparation of Detailed Project Reports (DPRs) for a minimum of 200 projects. Additionally, Rs 30 crore has been allocated to support central and state agencies in developing a robust pipeline of future projects.
Recognized as a crucial component of India’s transition to clean energy, small hydro power is well-suited for remote and challenging terrains, offering sustainable power solutions, improving energy access, and supporting local economies.
