Cabinet Approves ₹67 Billion Plan for Power Infrastructure of North Eastern States

The plan covers the states of Assam, Manipur, Meghalaya, Mizoram, Nagaland, and Tripura

December 16, 2020


The cabinet committee on economic affairs has approved the Revised Cost Estimate (RCE) for the North Eastern Region Power System Improvement Project (NERPSIP) with an estimated cost of ₹67 billion (~$910 million).

The RCE approval is a significant step towards the economic development of India’s North Eastern Region by strengthening the intra-state transmission and distribution systems.

The program is currently being implemented through Power Grid Corporation (PGCIL), a public sector undertaking under the Ministry of Power (MoP) in association with six North Eastern States – Assam, Manipur, Meghalaya, Mizoram, Nagaland, and Tripura.

The project would be commissioned by December 2021 and owned and maintained by the respective North Eastern state utilities. The implementation will create a reliable power grid and improve the states’ connectivity to the upcoming load centers and extend the benefits of grid-connected power to all consumers and beneficiaries in the North Eastern Region. The program would also increase the per capita power consumption of these states.

Implementing agencies are hiring the local workforce to construct the project on-site, generating employment for NER’s skilled and unskilled manpower.

After completion, an additional workforce will be required for operation and maintenance (O&M) of these newly created assets, generating other employment opportunities for the states.

The program was initially approved in December 2014 as a central ‘sector plan scheme’ of the MoP and is funded by the World Bank and the Government of India through budgetary support of the MoP on a 50:50 basis. However, the capacity building component of ₹890 million (~$12.09 million) will be entirely funded by the Indian Government.

According to data from the Central Electricity Authority (CEA), the northeastern region experienced the worst power and peak supply deficits at 3.1% and 5.1% during April and September 2020.

Northeastern region is also set to see a surge in solar power installations as the Ministry of New and Renewable Energy (MNRE) plans to develop 1,000 MW of solar projects in the northeastern states under Jawaharlal Nehru National Solar Mission (JNNSM). The transmission infrastructure in the state is also being ramped up with an inter-state transmission system project connecting the northeast with western India being developed by Sterlite Power. Power Finance Corporation Limited has provided debt funding of ₹20.7 billion (~$281 million) for this project. The project is expected to supply power from solar, nuclear, and hydropower projects to western and northeastern regions.