Shimla, March 17 (IANS) As many as 294 mini and micro hydropower projects in the public and private sectors are coming up in Himachal Pradesh to generate 586 MW of electricity, according to Chief Minister Prem Kumar Dhumal.

'From Jan 1, 2008, to Dec 31, 2009, 294 mini and micro hydroelectric power projects were allotted to private and joint venture companies and Himurja (state energy development agency),' Dhumal told the assembly Tuesday in a written reply.

'The tentative cost of all these projects is Rs.4,104.31 crore and these projects would generate 586 MW,' Dhumal, who holds the power portfolio, said.

Most of the projects are located in Kullu, Shimla, Lahaul and Spiti, Mandi, Sirmaur and Kangra districts. Kullu alone has 83 projects.

Himachal Pradesh has abundant water resources, with five major rivers flowing from the western Himalayas. It has a power potential of about 23,000 MW. About 6,480 MW has been harnessed till now by public sector units and private and joint venture companies.

Under the amended power policy, the government will get free power and upfront premium from all the allotted projects.

The quota of free power fixed for projects up to 5 MW is 6 percent for the first 12 years, 15 percent for up to 30 years and 24 percent for up to 40 years. After 40 years, the projects will be handed over to the government.

To encourage small entrepreneurs, the government is not charging any upfront premium for projects up to 2 MW. These projects would only be allotted to residents of the state.

However, for the projects above 5 MW, the fixed upfront premium is Rs.20 lakh per MW, which is in addition to the free power provision.

'The government has collected Rs.696,29,68,724 as upfront premium from 159 projects till Feb 15, 2010,' Dhumal said.

In the coming fiscal, the state government proposes to add more than 600 MW with the commissioning of Allain Duhangan, Malana II, Budhil, Chamera III and some other small projects.