The Cabinet Committee on Economic Affairs, chaired by the Prime Minister, approved an investment of Rs141,058.3 million (mn) for construction of the Kalai-II hydro electric project on the Lohit river in Anjaw District, Arunachal Pradesh. The project has an installed capacity of 1,200 megawatt (MW) comprising six units of 190 MW and one unit of 60 MW and is expected to be completed in 78 months. It is projected to generate 4,852.95 million units annually, strengthening state power supply and aiding peak demand management. As the first hydro project in the Lohit Basin it will contribute to balancing the national grid.

The project will be implemented through a joint venture company between THDC India Limited and the government of Arunachal Pradesh. The Government of India will extend Rs5,998.8 million as budgetary support for construction of roads, bridges and associated transmission line under enabling infrastructure and will provide Rs7,500 million as central financial assistance for the state equity. The structure is intended to mobilise resources and reduce the upfront burden on the state. The estimated completion period remains 78 months.

The state will receive 12 per cent free power and an additional one per cent earmarked for the Local Area Development Fund, alongside infrastructure development and socio-economic benefits for the region. The scheme anticipates significant improvement in local infrastructure including development of around 29 kilometres of roads and bridges which will be available for local use. Local communities are expected to benefit from compensation, employment and corporate social responsibility activities linked to the project. These measures are planned to support regional development and livelihoods.

Implementation of the Kalai-II hydro electric project is expected to support national energy objectives by adding substantial regulated capacity and improving grid stability. The joint venture approach is designed to combine central and state resources to deliver complex infrastructure in a challenging terrain. Monitoring and phased execution are expected to align construction with environmental and social safeguards and local needs. The project timeline and financial support aim to ensure timely delivery and long-term benefits for Arunachal Pradesh.