Small Hydro Capacity Project investment in India is facing a number of challenges, not least of which are prohibitively high interest rates. However, there are opportunities to develop successful small hydropower projects based on cash fow, a detailed due diligence and realistic expectations from both developers and their backers. DAVID APPLEYARD, Chief Editor
India’s scope for hydropower development is vast.
Close to 150 GW of theoretical potential exists in
the country today, with an estimated 84 GW of economically exploitable capacity, according to fgures
from the Central Electricity Authority (CEA). Simultaneously, there is a large population of rural poor
with no access to grid electricity, an existing peak
load defcit estimate at around 10 percent and a rapidly growing economy — and with it an associated
increase in power demand.
Indeed, India’s economy reportedly grew at its slow-
However, there are a number of structural issues
est pace in a decade during the 2012-2013 fnancial
year, but still clocked up a 5 percent growth rate over
the year. Prime Minister Manmohan Singh report-
edly expressed confdence that the country’s economy
would bounce back to an “ 8 percent growth rate.”
CEA projects electricity demand to increase by
around 40 percent by 2016-2017 and just about dou-
ble by 2021-2022.
that impact on the country’s ability to develop large
capital-intensive projects like large-scale hydropower