The state cabinet has decided to renovate and modernise state-owned aging hydropower plants under a new policy that will allow private players and public sector companies entry in some places. The state generation company will continue to handle some old plants, though.

The policy came up for approval at Tuesday’s cabinet meeting. Accordingly, private players will be allowed through competitive tendering to lease, renovate, operate and transfer (LROT) hydropower plants. The state government will not invest in LROT projects, but will earn annual revenue of R507 crore through threshold premium, upfront premium, 13 per cent free electricity supply, lease rent and intake maintenance fees.