NHPC Secures 500MW Hydro Power Capacity in J&K Through Long-Term BOOT Agreement

NHPC Limited will develop the 240 MW Uri-I Stage-II and 260 MW Dulhasti Stage-II Hydroelectric Projects. The combined capacity of these two projects is 500 MW.

What just happened

NHPC Limited has signed an Implementation Agreement with Jammu & Kashmir State Power Development Corporation Limited (JKSPDCL).

This pact approves the development of the 240 MW Uri-I Stage-II and 260 MW Dulhasti Stage-II Hydroelectric Projects in the Union Territory of Jammu & Kashmir.

The projects, totaling 500 MW, will be executed on a Build-Own-Operate-Transfer (BOOT) basis, with NHPC operating them for 40 years.

Why this matters

This agreement is a key step in NHPC's strategy to increase its renewable energy portfolio and installed capacity.

Developing these projects on a BOOT basis signifies NHPC's intent for direct operational control and revenue from these new assets.

It also supports India's renewable energy targets and enhances power generation infrastructure in the important northern region of Jammu & Kashmir.

Background

NHPC, India's largest hydropower producer, has significant operations in Jammu & Kashmir, managing six hydropower projects with a total capacity of 2,250 MW.

The Uri-I Stage-II project is an extension of the existing Uri-I HE Project (480 MW), which started operations in 1997.

Similarly, the Dulhasti Stage-II project is a planned expansion of the existing Dulhasti facility.

A Memorandum of Understanding (MoU) for these and other projects was previously signed between NHPC and JKSPDCL on January 3, 2021, outlining the development on a BOOT basis for 40 years.

NHPC's board also gave its approvals for investment in these projects earlier in February 2026.

What changes now

NHPC will gain direct operational control and revenue rights over the Uri-I Stage-II and Dulhasti Stage-II hydroelectric projects for four decades.

This development adds 500 MW of renewable energy capacity to NHPC's operational portfolio.

It strengthens the company's role in developing and managing significant hydropower assets in northern India.

Risks to watch

Hydropower projects face execution challenges and delays due to difficult geology and site conditions.

NHPC's recent Q3 FY26 financial results showed a significant drop in EBITDA and margins, prompting plans to borrow up to ₹8,000 crore for FY27.

High initial investment costs and varying tariffs are common in hydropower development, which can affect project economics.

Peer comparison

NHPC competes with other major power generators like NTPC Limited, India's largest power producer with a broader energy mix, and SJVN Limited, another state-owned entity focused on hydro and thermal power. While NHPC leads in hydropower, NTPC has a wider energy mix and often shows faster growth in sales and profits.

What to track next

Monitor the start of construction activities for both projects.

Track progress against project schedules and budget adherence.

Observe NHPC's overall financial results and margin trends, especially in light of recent Q3 results.

Look for further updates on how these projects integrate into NHPC's operations and revenue.