17/12/2025
NHPC Advance of 2007 Leaves Arunachal With ₹1,000-Crore Debt, State’s Free Power from Subansiri to Be Sold Off
ITANAGAR, Dec 16:
An advance of ₹225 crore taken by the Dorjee Khandu-led government from the National Hydroelectric Power Corporation Limited (NHPC) in 2007 has snowballed into a debt burden of over ₹1,000 crore for Arunachal Pradesh, owing to compounded interest at 9% per annum over nearly 18 years.
The state government had then stated that the advance was taken to revive the Arunachal Pradesh Cooperative Apex Bank Limited. Since its establishment in 1978, the bank has repeatedly been marred by allegations of frauds and irregularities involving officials and political figures, with little accountability.
The ₹225 crore advance was secured against the Dibang Multipurpose Project (3,000 MW) and Tawang Stage-I and II projects (600 MW and 800 MW respectively), with the expectation that the liability would be offset through the state’s share of free power from the 2,000 MW Subansiri Lower Hydroelectric Project.
However, both the Tawang and Dibang projects have faced prolonged delays. The Tawang projects remain stalled due to local opposition, while the Dibang project has been held up for years by similar issues.
In November, the proposal to recover the advance through the sale of free power from the Subansiri Lower project was discussed at a meeting of the Operational Sub-Committee (OCC) of the North Eastern Regional Power Committee (NERPC), Ministry of Power, held in Guwahati. Arunachal Pradesh proposed that NHPC recover the advance by selling the entire free power share due to the state from Subansiri Lower, leaving no power available for local consumption.
According to official documents, Uttar Pradesh Power Corporation Limited (UPPCL) and Tripura State Electricity Corporation Limited (TSECL) have agreed to purchase Arunachal’s 12% share of free power at tariffs determined by the Central Electricity Regulatory Commission (CERC). Power purchase agreements (PPAs) have already been executed, with UPPCL set to procure 215 MW and TSECL 25 MW.
“As per the original allocation order, 12% of the free power, including 1% for the Local Area Development Fund (LADF), was earmarked for the Government of Arunachal Pradesh. Further, under the Memorandum of Agreement (MoA) signed on June 24, 2007, for the ex*****on of Tawang-I, Tawang-II and the Dibang Multipurpose Project, NHPC advanced ₹225 crore to the state government,” the document states.
The MoA authorises NHPC to sell the state’s free power to recover the advance along with compounded interest at 9% per annum from the first project commissioned in the state, including the Subansiri Lower HEP, at CERC-determined tariffs. Subsequently, through a letter dated March 4, 2025, the state government formally requested NHPC to sell both the 11% free power and the 1% LADF power.
Tripura has, however, raised concerns over the steep rise in tariffs since the signing of the PPAs, attributing it to prolonged delays in the project’s ex*****on. The issue has been referred to a committee for further examination.
The Subansiri Lower Hydroelectric Project, launched in January 2005 at Gerukamukh on the Arunachal-Assam border, was stalled for eight years (2011–2019) due to protests by Assam-based organisations and legal challenges. As a result, the project cost has escalated sharply—from ₹6,285 crore estimated in 2002 to nearly ₹26,000 crore in 2025.
Despite lingering safety concerns and allegations of environmental violations, the project is now back on track. The mechanical run of the first 250 MW unit has been completed successfully, while synchronisation of another 250 MW unit with the national grid is underway.
NHPC plans to commission three more 250 MW units within the year, adding 1,000 MW to the grid. Once fully operational, the eight-unit (8×250 MW) Subansiri Lower project will generate 2,000 MW, making it the largest hydroelectric facility in India. Full commissioning is expected by 2026–27, according to official records.