Uttar Pradesh allocates Rs 65,926 crore for energy in FY27
Author: PPD Team Date: February 17, 2026
The Uttar Pradesh government has proposed an outlay of Rs 65,926 crore for the energy sector in FY 2026-27, an increase of 8% over the previous year. The allocation forms part of the state’s Rs 9,12,696 crore annual budget and covers generation, transmission, distribution and renewable energy development.
Thermal generation capacity has increased from 5,878 MW in 2016-17 to 9,120 MW as of December 2025, reflecting growth of 55.16%. Capital expenditure for power projects is pegged at Rs 19,498.59 crore, including equity support to Uttar Pradesh Rajya Vidyut Utpadan Nigam Limited (UPRVUNL). Key projects include the 2×800 MW Obra ‘C’ plant, 2×660 MW Jawaharpur project and Flue Gas Desulfurization (FGD) systems at multiple stations. Funding is also allocated for the 2,000 MW Ghatampur thermal project being developed in a joint venture with NLC India Limited.
Transmission capacity has expanded from 17,890 MW in 2016-17 to 32,500 MW, an increase of 82%. The budget earmarks Rs 18,309.63 crore for transmission and distribution investments. Under the Revamped Distribution Sector Scheme (RDSS), Rs 2,920.99 crore has been allocated for loss reduction works, Rs 4,155.17 crore for smart metering and Rs 1,65,000 crore for distribution network modernisation. A further Rs 4,000 crore is provided for distribution strengthening and Rs 1,443.50 crore for bond interest payments related to Uttar Pradesh Power Transmission Corporation.
The state has installed 2,815 MW of solar capacity to date. Under the Uttar Pradesh Solar Energy Policy-2022, Bio-energy Policy-2022 and Green Hydrogen Policy-2024, the government has set a target of 22,000 MW of renewable capacity over five years. Allocations include Rs 1,500 crore as equity for a 500 MW solar project in Jalaun district to be developed by Coal India Limited and UPRVUNL, and Rs 1,500 crore for a 200 MW solar project through NTPC Green Energy Limited. The PM-KUSUM scheme has been allocated Rs 1,500 crore for solar pumps.
The budget provides Rs 100 crore for Battery Energy Storage Systems (BESS) and Rs 5,000 crore for solar plants and BESS installations. Seventeen municipal corporations, including Ayodhya and Mathura, are being developed as solar cities. Around 5.20 lakh solar street lights have been installed in rural areas. Under the bio-energy policy, 36 Compressed Biogas (CBG) plants have been set up. The Uttar Pradesh Green Hydrogen Policy-2024 has been notified, and approval has been granted for two Centres of Excellence.
In the agriculture segment, 4,048 agricultural feeders have been constructed against a target of 4,680, providing 10 hours of supply. Between April 1, 2022 and December 2025, 2,41,088 private tube well connections were released. Since 2017-18, 1,66,135 connections have been provided under the general scheme. Free electricity for irrigation through tube wells has been available since April 1, 2023, with Rs 2,400 crore allocated for uninterrupted supply.
Between April 1, 2022 and 2025-26, 2,410 new 33/11 kV substations were constructed or augmented. In addition, 20,924 new distribution transformers were installed and 85,684 transformers underwent capacity enhancement.
During April-December 2025, average supply was 19 hours in rural areas, 21 hours 49 minutes at tehsil headquarters and 24 hours at district headquarters. Provisions have been included for summer supply schemes to manage peak demand.
For debt servicing, Rs 4,396.93 crore has been allocated towards interest on internal debt, including loans from REC Limited under the Rajiv Gandhi Rural Electrification Scheme and government securities issued under the UDAY scheme. An additional Rs 605.30 crore has been provided as loans to Uttar Pradesh Power Transmission Corporation for green energy corridor projects, to be sourced from KfW development bank.
