Archive · 10 Dec 2025
NHPC's Collateral Plan for Hydel Project Rejected
The NHPC wanted to use some of its land and buildings on forest land as a guarantee to get money for a big dam project called Subansiri Lower.
The government said no because the rules don't allow using forest land for such purposes.
The project is very expensive and has faced many delays.
Right now, only one part of the dam is working, and the rest will be ready by 2026-27.
The government is strict about not using forest land for anything other than what was originally allowed.
NHPC proposed using assets on forest land as collateral to fund the Subansiri Lower hydel project.
The Environment Ministry rejected the proposal, citing the Forest Conservation Act, 1980.
The project has faced over 300% cost escalation, with the current cost at Rs 26,000 crore.
NHPC has a revised borrowing plan to raise up to Rs 10,000 crore.
One of the eight units of the project is operational, with the rest expected to be completed by 2026-27.
- Who
- NHPC, Environment Ministry, Arunachal Pradesh government
- What
- Rejection of NHPC's proposal to use forest land assets as collateral for funding the Subansiri Lower hydel project
- When
- October 10, 2023 (Ministry's decision), March 2024 (NHPC's borrowing plan approval), August 29, 2024 (Revised borrowing plan approval)
- Where
- Arunachal Pradesh-Assam border
- Why
- The Environment Ministry ruled that using forest land assets for collateral is not tenable under the Forest Conservation Act, as it constitutes a collateral purpose beyond the approved non-forestry use
- Project
- Subansiri Lower Hydroelectric Project
- Location
- Arunachal Pradesh-Assam border
- Cost Escalation
- Over 300%
- Current Project Cost
- Rs 26,000 crore
- Borrowing Plan
- Up to Rs 10,000 crore
- Units Operational
- 1 out of 8 units
- Expected Completion
- 2026-27
- Act Involved
- Forest Conservation Act, 1980
