Himachal Pradesh, Telangana Sign INR 6200 Cr MoU for 520 MW Hydropower Projects in Lahaul-Spiti
Himachal Pradesh has signed an MoU with the Telangana government for the development of 400 MW Seli and 120 MW Miar hydroelectric projects in Lahaul-Spiti, with an estimated cost of INR 6,200 crore. Himachal will receive 12 percent, 18 percent and 30 percent free power for the first 12 years, the next 18 years and the remaining 10 years, respectively.
March 29, 2025. By Mrinmoy Dey
The MoUs were signed by Secretary Power Rakesh Kanwar on behalf of the Himachal Pradesh Government and Principal Secretary of Power Sandeep Kumar Sultania on behalf of the Telangana Government in the presence of Chief Minister Thakur Sukhvinder Singh Sukhu and Deputy Chief Minister of Telangana Bhatti Vikramarka Mallu at Shimla.
Both the projects are expected to be set up with an estimated cost of INR 6200 crore on the bank of Chenab river and are set to generate about 5000 direct and indirect employment to the youth of the State. The projects will be developed under a build-own-operate-transfer (BOT) model.
As per the agreement, Telangana Government has paid INR 26 crore as an upfront premium and after the commissioning of both these projects, Himachal Pradesh will receive 12 percent, 18 percent and 30 percent free power for the first 12 years, next 18 years and remaining 10 years, respectively under the new Energy Policy of the State Government. After 40 years, the Government of Telangana would transfer both the projects to Himachal Pradesh.
Additionally, the Telangana Government would contribute 1.5 percent of the cost of projects towards the Local Area Development Fund (LADF) and provide additional one percent free power for LADF after commissioning. The affected families of these projects will also receive monetary benefits equivalent to 100 units per month for a period of 10 years.
On the occasion, Chief Minister Thakur Sukhvinder Singh Sukhu said that this collaboration marks a new era of inter-state cooperation in the renewable energy sector. “Our Government is committed to protecting the State's resources while ensuring that hydropower projects benefit the people of the State. We will extend full cooperation to the government of Telangana to establish both the projects and look forward to the commencement of construction earliest. These agreements are a win-win situation for both the States,” he said.
In recent years, royalty premiums have become a contentious issue between the Himachal Pradesh state government and PSUs like SJVN and NHPC operating hydropower projects in the state. Both the PSUs refused to accept the revised royalty structure. Subsequently, the state government wrote to the central government seeking a response on the royalty issue from SJVN and NHPC and reclaim the hydropower projects if these are not aligned with the new Himachal policies.
The Chief Minister said that the present State Government would not allow the looting of resources of the State. He said that the state government is recognising water resources of the State as wealth and it is undertaking radical reforms in the power sector to make Himachal Pradesh a self-reliant State.
Sukhu said that while the State has harnessed 11,500 MW of renewable energy so far, much of it has benefitted the Central Public Sector Undertakings. He said that the present Government is determined to change this and ensure the State's water resources are utilised for the economic growth of the people of the State.
Deputy Chief Minister of Telangana Bhatti Vikramarka Mallu stated that the Telangana Government is committed towards ensuring energy security for both the States keeping in view its fast-growing demand. “In line with Telangana Clean and Green Energy Policy, 2025, this MoU reflects our commitment to diversifying our energy portfolio while ensuring environmental sustainability. By partnering with Himachal Pradesh, we are taking a significant step towards securing cleaner, greener and more reliable power for our future," he said.
The MoU underscores a growing trend of state-level collaboration in renewable energy, leveraging Himachal’s hydropower potential to support Telangana’s industrial energy needs. As the partnership moves forward, it is expected to drive investments, create jobs, and contribute to India's energy transition.
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