India is speeding up hydropower projects in disputed territory claimed by China

NEW DELHI:

India plans to spend $1 billion to speed up the construction of 12 hydropower plants in the northeastern Himalayan state of Arunachal Pradesh, two government sources said, a move that could stoke tensions with China claiming the region.

The federal finance ministry under Nirmala Sitharaman recently approved up to 7.5 billion rupees ($89.85 million) in financial assistance to each hydropower project in the northeastern region, the sources said.

Under the scheme, around 90 billion rupees are likely to be allocated for the 12 hydropower projects in Arunachal Pradesh, the sources with direct knowledge of the matter said.

The program is likely to support North-Eastern states and help them finance equity in the projects they host. The involvement of state governments generally helps expedite regulatory approvals, local remediation and power sharing negotiations with the host state.

Plans for the hydroelectric plants are expected to be announced in the 2024/2025 federal budget to be unveiled by Prime Minister Narendra Modi’s government on July 23, said the sources, who declined to be named as the information remained confidential.

India’s finance and energy ministries and China’s foreign ministry did not immediately respond to Reuters requests for comment.

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Last August, the government awarded contracts to state-owned companies NHPC ( NHPC.NS ), SJVNL ( SJVN.NS ) and NEEPCO to build the 11.5 gigawatt power plants involving an estimated investment of $11 billion, as part of a wider project to the development of infrastructure in the border area.

Neither company responded to a request for comment.

These power plants were earlier roped in to private sector companies but remained non-starters due to various reasons.

India has built less than 15 gigawatts of hydro over the past 20 years, while new coal and other renewable installations have been nearly 10 times higher than new hydro projects.

India and China share a 2,500 km (1553.43 mi) largely undemarcated border, over which they fought a war in 1962.

India says Arunachal Pradesh is an integral part of the country, but China claims it is part of southern Tibet and has objected to other Indian infrastructure projects there.

The Indian government is promoting projects in the eastern region after reports that Beijing could build dams on a section of the Brahmaputra river, known as the Yarlung Tsangbo in China, which flows from Tibet through Arunachal Pradesh.

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India is concerned that Chinese projects in the region could cause flash floods or create water shortages.

Both countries are working to improve infrastructure along their border regions after clashes in the western Himalayas left 20 Indian and at least four Chinese soldiers dead in 2020.

Last week, Indian Foreign Minister Subrahmanyam Jaishankar met his Chinese counterpart Wang Yi in Kazakhstan, where both agreed to step up talks to resolve issues along their border.