The Ministry of Power (MoP) has revised the provision of budgetary support for hydroelectric and Pumped Storage Projects (PSPs), allocating Rs 124.6 billion from FY 2024–25 to 2031–32 to support 31 GW of hydroelectric capacity, including 15 GW from PSPs. The support is capped at Rs 10 million/MW for projects up to 200 MW, and Rs 2 billion plus Rs 7.5 million/MW for projects exceeding 200 MW, with an increase to Rs 15 million/MW for exceptional cases.
The program applies to hydropower projects over 25 MW, including private sector projects, PSPs, and those with letters of award issued by June 2028. The budget will cover enabling infrastructure costs, including transmission lines, substations, ropeways, railway sidings, and communication infrastructure.
In August 2024, the government introduced draft guidelines for tariff-based bidding to procure energy from PSPs, with a minimum bid capacity of 50 MW for interstate and 10 MW for intrastate projects. Additionally, the Central Electricity Authority approved two PSPs with a combined capacity of 2,600 MW—600 MW in Odisha and 2,000 MW in Karnataka.