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

Delhi plans to build projects in Arunachal Pradesh, which it says is an integral part of India, but China claims it is a part of Southern Tibet

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A road construction site in the Tawang district of India’s Arunachal Pradesh state, almost all of which China insists falls under its sovereignty as “South Tibet”. Photo: AFP

Published: 10:00pm, 9 Jul 2024Updated: 11:31pm, 9 Jul 2024

India plans to spend US$1 billion to expedite the construction of 12 hydropower stations in the northeastern Himalayan state of Arunachal Pradesh, two government sources said, a move that could raise tensions with China, which lays claim to the region.

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.

An Indian border post near the frontier with China in Khinzemane, in India’s Arunachal Pradesh state, areas of which China renamed to press its claim to the region. Photo: AFP

The plans for the hydropower stations are expected to be announced in the 2024/2025 federal budget that Prime Minister Narendra Modi’s government will unveil on July 23, the sources said, declining to be named as the information remained confidential.

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