India races to build power plants in region claimed by China, which could add to tensions

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

Under the scheme, about 90 billion rupees is likely to be allotted for the 12 hydropower projects in Arunachal Pradesh, said the sources, who have direct knowledge of the matter.

The scheme is likely to support northeastern states and help them finance equity holdings in the projects they host. Having state governments on board generally helps in expediting regulatory clearances, locals rehabilitation and negotiations on sharing electricity with the host state.

The Indian finance and power ministries and China’s foreign ministry did not immediately respond to requests for comment.

Last August, the government awarded contracts to state-run firms NHPC, SJVNL and NEEPCO for the construction of the 11.5-gigawatt-capacity plants entailing an estimated investment of US$11 billion, as part of a broader project to develop infrastructure in the border region.

None of the companies responded to a request for comments.

These power plants were earlier enlisted with private sector firms, but remained non-starters due to various reasons.

India has built less than 15-gigawatt hydropower plants in the last 20 years, while installations of new coal and other renewable sources of energy were nearly 10 times of the new hydropower projects.

India says Arunachal Pradesh is an integral part of the country, but China claims it is a part of southern Tibet, and has objected to other Indian infrastructure projects there. The Indian government is pushing projects in the eastern region following reports that Beijing could construct dams on a section of