India’s Himachel Pradesh state government is keen to harness its small hydro power potential in five of the state’s river basins, estimated to have a total capacity of 750MW.

At present 85 projects totalling 104MW, involving investment of about Rs6000M (US$143M), are under various stages of development by private investors. The government has now identified 319 more sites, a total potential of 475MW. In order to exploit this potential proposals are being invited from private investors.

Interested private investors will have to take the projects from the concept to the commissioning phase, including pre-feasibility studies. Investors are also welcome to apply for setting up hydro projects on sites not included in the list of identified sites.

The Indian government is using many incentives to attract private investment. The Ministry of Non Conventional Energy Sources is providing capitalised interest subsidies up to Rs1120M/MW (US$26M). Incentives of Rs100,000 (US$2500) for detailed surveys are also being offered for projects up to 500MW.

The HP state government is guaranteeing that the HP State Electricity Board will buy back power at Rs2.25 (5c)per unit.