In June 2025, the Cabinet of Arunachal Pradesh, led by Chief Minister(CM) Pema Khandu, declared the 2025-2035 as the ‘Decade of Hydropower’, to harness its significant hydropower potential to generate 58,000 Megawatts (MW) of electricity.
- The cabinet termed the thrust on hydropower as a “strategic management of revenues generated through free power from the Hydroelectric Projects (HEPs).
Key Points:
i.The government also aims to create a stable and supportive policy and regulatory framework for the overall development of the industrial ecosystem in AR, as a source of economic growth and as a means of generating employment and self-employment opportunities for youths of AR.
ii.As per the agreement with power developers, AR will receive 12% free power from each HEP, and an additional 1% for a local development fund.
- With around 19 Gigawatt (GW) of Hydropower projects under development with cumulative investments of over Rs.2 lakh crore in the period of 2025-35, AR is estimated to receive annual revenues of Rs.4,525 crores from the sale of free power from HEPs from 2035.
About Escrow Account:
i.The cabinet has also approved the creation of an escrow account for strategic management and effective utilization of the revenue generated from the proceeds of free power from HEPs.
- By effective management of these benefits, AR can make strategic and financial decisions about investing in overall developments of AR.
ii.An escrow account is an account where funds are held in trust while two or more parties complete a transaction. The trusted third party will secure the funds in a trust account. The funds are released only after all the conditions between the parties have been settled.
iii.The initiative will streamline the financial processes and ensure the benefits of Free Power are maximized for the long-term sustainable growth and prosperity in AR, ultimately contributing to the realization of its strategic energy goals and the well-being of the citizens of AR.
Note: The cabinet was briefed about the Strategic and National security significance of the proposed Siang Upper Multipurpose Project (SUMP) in Upper Siang district of AR, declared as ‘National Project’ by the Government of India (GOI) in 2008.
About Arunachal Pradesh (AR):
Chief Minister (CM) – Pema Kandu
Governor – Kaiwalya Trivikram Parnaik
Capital – Itanagar
National Park (NP) – Namdapha NP, Mouling NP
