Public Investment Board clears Rs 26,069 crore Kamala hydropower project in Arunachal

The Public Investment Board (PIB) on January 8 approved an expenditure of Rs 26,069.50 crore for the proposed 1,720 MW Kamala hydroelectric project in Arunachal Pradesh, sources said.

Once completed, the project is expected to generate 6,869.92 million units of green energy annually, contributing significantly to India’s energy transition goals and the Government of India’s commitment to achieving Net Zero emissions by 2070.

The Kamala hydroelectric project is a storage-based scheme with an integrated flood moderation component. It is proposed on the Kamala River, a major tributary of the Subansiri River, and will be located across Kamle, Kra Daadi and Kurung Kumey districts of Arunachal Pradesh. The project involves the construction of a 216-metre-high concrete gravity dam along with an underground powerhouse, with a scheduled completion period of eight years.

Apart from power generation, the project is expected to play a crucial role in flood moderation in the Brahmaputra valley, providing downstream flood relief 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 owning the remaining 26 per cent. The total completion cost, estimated at Rs 26,069.50 crore, includes interest during construction (IDC) and financing charges amounting to Rs 4,815.64 crore.

Financing for the project has been structured with a debt-equity ratio of 70:30. It will be supported by Government of India grants for enabling infrastructure worth Rs 1,340 crore and Rs 4,743.98 crore earmarked for the flood moderation component. In addition, the Arunachal Pradesh government will provide 100 per cent reimbursement of state GST.

Taking these factors into account, the levelised tariff of the project has been estimated at Rs 5.97 per unit.

The project is expected to deliver multiple benefits to the state and the region, including flood moderation in the Brahmaputra basin, 12 per cent free power to the Government of Arunachal Pradesh valued at around Rs 486 crore annually, and a contribution of Rs 40 crore per year to the Local Area Development Fund (LADF). It is also projected to spur regional infrastructure development and generate substantial employment, with around 300 direct jobs and nearly 2,500 contract jobs during the peak construction phase.

Sources added that the state government will earn a first-year return of approximately Rs 127 crore on the Rs 750 crore Central Financial Assistance included in its 26 per cent equity contribution.

Meanwhile, the sources also said that the Union Ministry of Power has given in-principle approval for an expenditure of Rs 3,000 crore towards setting up testing facilities across the country.