Guwahati: The Public Investment Board on January 8 cleared an outlay of Rs 26,069.50 crore for the proposed 1,720 MW Kamala hydroelectric project in Arunachal Pradesh, official sources said.
The storage-based hydropower project, planned on the Kamala River—a major tributary of the Subansiri—will span Kamle, Kra Daadi and Kurung Kumey districts of the state. The scheme includes a 216-metre-high concrete gravity dam, an underground powerhouse and an integrated flood moderation component, with a construction timeline of eight years.
Once commissioned, the project will generate an estimated 6,869.92 million units of renewable energy annually and support India’s energy transition and the Centre’s Net Zero target by 2070, sources said.
Apart from power generation, the project will provide flood moderation benefits to the Brahmaputra valley by offering downstream flood control during peak monsoon periods.
The project will operate under the Build-Own-Operate-Transfer (BOOT) model through a joint venture, with NHPC holding a 74 per cent stake and the Arunachal Pradesh government holding the remaining 26 per cent.
The total project cost of Rs 26,069.50 crore includes interest during construction and financing charges amounting to Rs 4,815.64 crore.
Funding has been structured with a debt-equity ratio of 70:30. The Centre will extend grants of Rs 1,340 crore for enabling infrastructure and Rs 4,743.98 crore for the flood moderation component. The state government will also provide full reimbursement of state GST, sources said.
Based on the financial arrangements, authorities have assessed the project’s levelised tariff at Rs 5.97 per unit.
The Kamala project will deliver multiple benefits, including 12 per cent free power to the Arunachal Pradesh government valued at about Rs 486 crore annually, an annual contribution of Rs 40 crore to the Local Area Development Fund, and significant infrastructure development in the region.
During peak construction, the project will generate around 300 direct jobs and nearly 2,500 contract jobs. Sources said the state will earn an estimated first-year return of about Rs 127 crore on the Rs 750 crore Central Financial Assistance included in its equity contribution.
Separately, sources said the Union Ministry of Power has accorded in-principle approval for an expenditure of Rs 3,000 crore to set up power testing facilities across the country.
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