Once plagued by years of delays, financial constraints and technical setbacks, the Uhl Stage-III Hydroelectric Project has emerged as the driving force behind Himachal Pradesh’s energy revival, generating clean electricity and securing an estimated annual revenue of nearly Rs 200 crore for the state.
Located in Mandi district’s Jogindernagar subdivision, the long-delayed project has been transformed into one of Himachal Pradesh’s most-significant hydropower assets. The turnaround follows sustained efforts by the state government to resolve administrative and financial hurdles, enabling the project to operate at full capacity and strengthen the state’s renewable energy portfolio.
The project has generated nearly 465 million units (MU) of electricity since becoming operational. It produced around 25 MU during the last two months of the 2024-25 financial year, followed by 345 MU in 2025-26. In the current financial year, generation has already crossed 95 MU, with officials confident of achieving the annual target of 390 MU.
The revival gained momentum after the state government undertook a comprehensive review of the project in March 2023, expediting long-pending restoration works. A major breakthrough came with the arrangement of a Rs 185-crore low-interest loan through Kangra Central Cooperative Bank, which financed the completion of rehabilitation and repair works necessary for full-scale operations.
The government also negotiated a reduction in the interest rate on the project’s loan from the Power Finance Corporation, a move expected to save nearly Rs 30 crore annually. With regular revenue now flowing in, the project has begun repaying both principal and interest, significantly improving its financial sustainability.
At the prevailing average tariff of around Rs 5 per unit, Uhl Stage-III is expected to generate approximately Rs 200 crore in annual revenue, with earnings likely to rise as electricity tariffs increase in the coming years.
The project will also provide a direct fiscal boost to the state government with 13 per cent of its revenue accruing to Himachal Pradesh. This is expected to translate into an additional Rs 25-30 crore annually, supporting welfare programmes and infrastructure development.
According to Devender Kumar, Managing Director of Uhl Stage-III project, generation in the previous financial year remained below target because the neighbouring Shanan Hydroelectric Project remained shut for nearly a month, interrupting the supply of 23 cusecs of water required for optimal operations. Despite the setback, output has steadily improved.
With operations stabilised and production rising, Uhl Stage-III now stands as a model of infrastructure revival, demonstrating how strategic financial planning and timely execution can transform stalled public projects into engines of clean energy, sustainable revenue and long-term economic growth for Himachal Pradesh.
