The Ministry of New and Renewable Energy (MNRE) has announced a comprehensive Small Hydro Power Development Scheme with significant financial allocation and capacity targets. Minister of State Shri Shripad Yesso Naik revealed the scheme during the Curtain Raiser Programme for the dedicated Small Hydro Power session at the Bharat Renewable Energy Summit & Expo 2026.
Scheme Details and Targets
The new Small Hydro Power Development Scheme is proposed for the period 2026-27 to 2030-31 with a total outlay of ₹2,584.60 crore. The scheme targets approximately 1,500 MW of new Small Hydro Power capacity addition. Additionally, it will incentivize States to prepare Detailed Project Reports for about 200 projects, creating a pipeline for future development.
Current Status and Potential
India's assessed Small Hydro Power potential stands at around 21 GW across more than 7,100 identified sites nationwide. However, only about 5.2 GW has been harnessed to date, representing significant untapped potential. The Minister emphasized that Small Hydro Power has a distinctive role in India's clean energy transition, contributing to energy security, decentralized generation, employment, and socio-economic development in remote areas.
Strategic Importance
Small Hydro Power projects, particularly run-of-river designs where technically and environmentally feasible, offer renewable energy options requiring relatively less land and avoiding large-scale submergence and displacement associated with major reservoir-based projects. They can provide dependable renewable electricity closer to consumption points, strengthen decentralized generation, and enhance power system resilience, especially in geographically challenging regions.
Challenges and Partnerships
Secretary Shri Santosh Kumar Sarangi identified long lead times due to delays in obtaining forest, environment, and right-of-way clearances as key challenges impacting timely project execution. While MNRE has received assurances from the Ministry of Environment, Forest and Climate Change regarding timely clearances for small hydropower projects, he suggested developing a mechanism to generate and escalate alerts for undue delays.
Financing Requirements
The Secretary emphasized the need to improve bankability of small hydropower projects, noting their unique cash-flow profile necessitates access to long-term patient capital. He urged the Indian Renewable Energy Development Agency (IREDA) to lead efforts with banks and multilateral development institutions including the Asian Development Bank and World Bank to facilitate greater availability of such capital for project developers.
Upcoming Event
The dedicated Small Hydro Power session will be held at the Bharat Renewable Energy Summit & Expo 2026 from 2nd to 5th November 2026 at Bharat Mandapam, New Delhi. This platform will deliberate on policy reforms, investment, financing, technology, and partnerships to harness India's river systems, geographical diversity, and indigenous technological capabilities.