Renewable energy, and in particular hydropower, has great potential to make a dual contribution towards closing the gap between energy demand and supply in India and towards slowing down the growth in GHG emissions.

Harnessing the country’s hydropower potential is a vital component in transforming India’s power mix away from fossil fuels while increasing energy security as hydropower is a reliable and cost-efficient source of renewable energy and can either be used to cover base load or peak demand.

Commercial banks are hesitant in extending long-term financing for hydropower projects due to various factors like the technical complexity of hydropower plants, sensitive social and environmental issues, lengthy procurement and construction procedures as well as geological surprises witnessed during the implementation of such projects.

The Indian government is committed to harness the great potential of hydropower despite these difficulties. On behalf of the German government, KfW is supporting this endeavour through long term concessional financing and complementary technical assistance (TA). In all its endeavours, KfW ensures that projects are implemented in an environmentally and socially sustainable manner.

On behalf of the German government, KfW has promoted the rehabilitation and modernization of the Hirakund hydropower plant in Odisha. Currently KfW finances the HEPs Shongtong Karcham, Budhil and Himachal Sorang in Himachal Pradesh and the Pare HEP in Arunachal Pradesh.

The Indian and German governments have established a solid cooperation to promote a sustainable energy supply based on hydropower in India. In the framework of Indo-German Financial Cooperation, KfW is committed to play an important role in this cooperation to further develop the hydropower sector. The increased use of hydropower will lead to increased energy security in India and a reduction of greenhouse gas emissions.

Himachal Pradesh Power Corporation Limited (HPPCL): http://hppcl.gov.in/

North Eastern Electric Power Corporation Limited (NEEPCO): http://www.neepco.gov.in/