New Delhi, April 8, 2026
The Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, has approved an investment proposal worth ₹14,105.83 crore for the construction of the 1,200 MW Kalai-II Hydroelectric Project on the Lohit River in Anjaw district of Arunachal Pradesh.
The project is expected to be completed within 78 months and marks a major step in unlocking the hydropower potential of the Lohit basin, where it will become the first hydropower project.
With an installed capacity of 1,200 MW, comprising 6 units of 190 MW each and 1 unit of 60 MW, the Kalai-II project is projected to generate 4,852.95 million units (MU) of electricity annually.
The government said the project will help improve power supply in the state, support peak demand management, and contribute to balancing the national grid, strengthening both regional and national energy security.
The project will be implemented through a joint venture company between THDC India Limited and the Government of Arunachal Pradesh.
As part of the support package, the Centre will provide:
- ₹750 crore as central financial assistance for the state’s equity participation
- ₹599.88 crore as budgetary support for enabling infrastructure, including roads, bridges and transmission lines
In addition to the direct energy benefits, Arunachal Pradesh will receive 12% free power, while an additional 1% power will be earmarked for the Local Area Development Fund (LADF), creating a steady stream of long-term regional benefits.
The project is also expected to drive critical infrastructure development and socio-economic gains in the region, especially in a strategically important border district where road and transmission connectivity remains crucial.
