The Public Investment Board (PIB) has cleared an expenditure of Rs 26,069.50 crore for the proposed 1,720 MW Kamala hydroelectric project in Arunachal Pradesh, marking a major push to India’s renewable energy and flood moderation efforts.
Approved on January 8, the storage-based project is expected to generate 6,869.92 million units of green energy annually, supporting India’s energy transition and its commitment to achieving Net Zero emissions by 2070.
The Kamala hydroelectric project will be developed on the Kamala River, a major tributary of the Subansiri, spanning Kamle, Kra Daadi and Kurung Kumey districts. It involves the construction of a 216-metre-high concrete gravity dam and an underground powerhouse, with an estimated completion period of eight years.
Beyond power generation, the project includes an integrated flood moderation component aimed at reducing downstream flood risks in the Brahmaputra valley during peak monsoon periods.
The project will be implemented under the Build-Own-Operate-Transfer (BOOT) model through a joint venture, with NHPC holding a 74 per cent equity stake and the Government of Arunachal Pradesh the remaining 26 per cent. The total project cost includes Rs 4,815.64 crore towards interest during construction and financing charges.
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Financing has been structured with a debt-equity ratio of 70:30. Central support includes grants worth Rs 1,340 crore for enabling infrastructure and Rs 4,743.98 crore for the flood moderation component, while the state government will provide full reimbursement of state GST.
Based on these factors, the project’s levelised tariff has been estimated at Rs 5.97 per unit.
The project is expected to yield multiple benefits, including 12 per cent free power to Arunachal Pradesh valued at about Rs 486 crore annually and an annual contribution of Rs 40 crore to the Local Area Development Fund. It is also projected to generate around 300 direct jobs and nearly 2,500 contract jobs during peak construction.
Sources added that the state government is expected to earn a first-year return of about Rs 127 crore on the Rs 750 crore Central Financial Assistance included in its equity contribution.
Separately, the Union Ministry of Power has granted in-principle approval for an expenditure of Rs 3,000 crore to establish power testing facilities across the country.
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