In a significant move to accelerate economic growth and energy self-sufficiency, the Jammu and Kashmir government is poised to roll out a new Independent Power Producer (IPP) policy aimed at attracting private investment in the region’s vast hydropower sector. This policy, which has undergone extensive consultations and drafting, is designed to unlock the immense hydroelectric potential of Jammu and Kashmir and transform the Union Territory into a hub of clean, affordable, and reliable energy—advancing both local development and the broader national agenda of sustainable energy security.
The draft IPP policy, expected to be announced soon, categorizes hydroelectric projects into two main segments: Small Hydro Power (SHP) projects, encompassing plants up to 25 Megawatts (MW), and Large Hydro Power (LHP) projects, covering capacities above 25 MW and up to 100 MW. This classification is intended to create a clear regulatory and investment framework, making it easier for private players to participate in projects of varying scales. All SHP projects will be funded and governed by the Ministry of Renewable Energy, while LHP projects will fall under the purview of the Ministry of Power, Government of India. The Jammu and Kashmir Energy Development Agency (JAKEDA) has been designated as the nodal agency for projects up to 10 MW, ensuring streamlined implementation and oversight, while the Jammu and Kashmir Power Development Corporation Limited (JKPDCL) will oversee larger projects above 10 MW.
The government’s vision is ambitious yet pragmatic: to harness Jammu and Kashmir’s estimated hydro-power potential of over 20,000 MW—of which only about 3,500 MW has been exploited so far—and to position the region as a net power exporter within India. The Chief Secretary of Jammu and Kashmir, Atal Dulloo, has emphasized that the new policy is not just about generating more power, but about catalyzing economic development, reducing power losses, and promoting entrepreneurship and private sector participation. By revising the existing framework and introducing competitive bidding models such as the Swiss Challenge Method, the policy aims to ensure transparency, efficiency, and optimal resource utilization.
The policy also addresses key operational and regulatory aspects. Government land required for power projects will be allotted as per the established policy for micro/mini hydro projects, and in cases where government land is unavailable, the IPP will purchase land in the name of JAKEDA, which will then be leased to the developer. The responsibility for securing all statutory and non-statutory clearances will rest with the IPP, but the government and JAKEDA will actively facilitate the process to ensure timely approvals. This proactive approach is designed to remove bureaucratic hurdles and foster a business-friendly environment that encourages sustained private sector engagement.
The government’s renewed focus on hydropower comes at a time when the Union Territory is seeking to address both supply-side challenges and the need for clean, renewable energy. By encouraging private investment in SHP and LHP projects, the administration aims to not only meet local electricity demand but also generate surplus power for export to other states, thereby boosting revenue and creating jobs. The policy also aligns with India’s national priorities of expanding renewable energy capacity and reducing carbon emissions, positioning Jammu and Kashmir as a key contributor to the country’s green energy transition.
The economic impact of this policy is expected to be transformative. Hydropower development will drive infrastructure growth, create employment opportunities, and stimulate ancillary industries such as construction, logistics, and services. The government’s commitment is further reflected in the proposed allocation of over ₹2,000 crore for the power sector in the upcoming fiscal year, a substantial increase aimed at strengthening the entire power supply chain—from generation to distribution and billing. This integrated approach is designed to ensure 24/7 reliable and affordable electricity for all households in Jammu and Kashmir by 2027–28, in line with the broader vision of making the region an energy hub.
Jammu and Kashmir’s hydropower policy also places a special emphasis on the development of micro, mini, and small hydro projects, particularly in remote and underserved areas. By leveraging the region’s unique topography and abundant water resources, the administration seeks to electrify villages and hamlets that have historically faced energy deficits, thereby promoting inclusive growth and improving quality of life. The Science & Technology Department has empowered JAKEDA to implement all micro/mini/small hydro projects up to 10 MW, ensuring that even the smallest communities benefit from the hydropower revolution.
In summary, the soon-to-be-announced IPP policy represents a bold and forward-looking step by the Jammu and Kashmir government to harness the region’s hydropower potential for economic growth, energy security, and environmental sustainability. By creating a conducive framework for private investment, streamlining regulatory processes, and ensuring equitable development, the policy is set to transform Jammu and Kashmir into a powerhouse of clean energy—contributing to India’s progress and prosperity on multiple fronts.
