Himachal Pradesh Chief Minister Sukhvinder Singh Sukhu on Thursday, 2 July 2026, chaired a high-level meeting of the state Energy Department in Shimla and directed officials to initiate the process of reclaiming three hydroelectric projects — totalling 658 megawatts — previously allotted to central public-sector undertaking SJVN Limited. The Chief Minister also ordered renegotiation of terms with NHPC Limited over the 500 MW Duggar Hydroelectric Project, where a proposal to raise the dam height has altered the project's scope.

Context

Posting on X, CM Sukhu stated — 'जलविद्युत हिमाचल की अर्थव्यवस्था की रीढ़ है' ('Hydropower is the backbone of Himachal's economy') — and said the state government's objective is to ensure maximum benefit from the state's rich hydroelectric resources for its people. He directed officials to begin the process of retrieving the 382 MW Sunni, 210 MW Luhri Stage-1, and 66 MW Dhaulasidh hydroelectric projects from SJVN. All three projects are located on river systems within Himachal Pradesh and were earlier allotted to SJVN Limited, a joint venture promoted by the Government of India and the Government of Himachal Pradesh.

Policy Backdrop

SJVN Limited was constituted in 1988 as a joint venture to develop projects in the Satluj basin, with equity participation from Himachal Pradesh. Over successive administrations, the state has periodically reviewed allotments to central PSUs, seeking higher royalties, greater free-power shares, and stronger local employment provisions. The move to reclaim the three projects follows a broader pattern seen across Himalayan states, where host governments have pushed to renegotiate or cancel allotments to central hydropower developers in order to retain a larger share of revenues from their natural resources.

On the Duggar project, NHPC Limited — India's largest hydropower developer under the Union Ministry of Power — has proposed increasing the dam height, effectively expanding the project's footprint and generation capacity. CM Sukhu directed officials to renegotiate the project's terms and conditions in light of this revision, with the state seeking proportionate benefits commensurate with the enhanced project parameters.

Stakeholders and Impact

The retrieval of the 382 MW Sunni, 210 MW Luhri Stage-1, and 66 MW Dhaulasidh projects would significantly alter the development trajectory of these assets. If the state proceeds, the projects could be re-allotted to a state entity or offered through fresh competitive bidding, potentially improving revenue flows and free-power entitlements for Himachal Pradesh. The state exchequer, local communities in project-affected areas, and the broader electricity grid of the northern region all have a stake in the outcome.

SJVN Limited and NHPC Limited, as central PSUs, would face significant project-pipeline disruption if the cancellations and renegotiations proceed. Both organisations have substantial capital already committed to planning and early-stage work on these projects.

What's Next

Officials have been instructed to formally initiate the retrieval process for the three SJVN projects, which will likely involve legal and contractual review of the original allotment agreements. Simultaneously, a renegotiation team is expected to engage NHPC on revised benefit-sharing terms for the 500 MW Duggar project. The outcomes will be closely watched as a signal of how aggressively the Sukhu government intends to assert state control over Himachal Pradesh's hydropower sector in the coming months.