Cabinet Approves ₹14,106-Crore Kalai-II Hydroelectric Project in Arunachal Pradesh

The Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, has approved an investment of ₹14,105.83 crore for the construction of the Kalai-II Hydro Electric Project in Arunachal Pradesh. The 1,200-megawatt undertaking represents a major expansion of India's clean energy infrastructure in the northeastern frontier.

The project will be built on the Lohit River in the remote Anjaw district of eastern Arunachal Pradesh. It stands as the first major hydropower development planned for the Lohit River basin, opening up significant untapped hydrological potential in the sensitive border region.

Under the approved engineering blueprint, the power station will feature an installed capacity of 1,200 MW distributed across seven generating units. The setup comprises six main turbines rated at 190 MW each alongside a smaller 60 MW unit, calculated to generate roughly 4,852.95 million units of electricity annually once fully operational.

The hydroelectric facility will be executed through a dedicated joint venture between central public sector enterprise THDC India Limited and the Government of Arunachal Pradesh. This partnership framework is designed to align central execution expertise with local administrative support and land management.

To facilitate execution in the rugged Himalayan terrain, the Central Government has sanctioned substantial targeted assistance alongside the core capital outlay. New Delhi will provide ₹599.88 crore as budgetary support specifically for enabling infrastructure, including access roads, bridges, and associated transmission connections, alongside ₹750 crore in Central Financial Assistance toward the state government's equity share.

Under the agreement, Arunachal Pradesh is slated to receive 12 percent of the power produced free of cost, delivering a substantial recurring revenue stream and power supply to the state exchequer. An additional one percent of the project's output will be channeled directly into a dedicated Local Area Development Fund to finance community development across host neighborhoods.

Beyond power generation, the project mandates critical logistics enhancements that will dramatically improve connectivity in the frontier state. The plan encompasses the development and improvement of approximately 29 kilometers of roads and multiple permanent bridges spanning the Anjaw and Namsai districts.

The addition of flexible hydroelectric capacity is increasingly critical as India integrates large volumes of intermittent solar and wind capacity into the national grid. Hydropower plants like Kalai-II can ramp up generation rapidly to meet peak evening loads and provide vital grid balancing services during fluctuations in power demand.

The initiative also carries broader economic implications for border communities in Arunachal Pradesh, where industrial activity and formal employment remain scarce. Construction activities are anticipated to stimulate local supply chains, create technical and support jobs, and establish year-round transit routes into previously isolated border corridors.

The project has been scheduled for completion within a 78-month implementation window following the final investment sanction. Project authorities and state agencies will now transition from financial approval to ground-level procurement, environmental clearances, and engineering mobilization across the Lohit valley site.