CHENNAI: The 1,100 MW Velimalai Pumped Storage Hydro Electric Project in Kanniyakumari district has been granted Terms of Reference (ToR) clearance by the Union Ministry of Environment, Forest and Climate Change, paving the way for the preparation of a detailed Environmental Impact Assessment (EIA) and public hearing process on the proposal.
The project, proposed by the Tamil Nadu Green Energy Corporation Limited (TNGECL), will come up on 159.25 hectares of land spread across Alur and Velimalai villages in Kalkulam taluk of Kanniyakumari at an estimate of Rs 5,624 crore.
It has been envisioned as an off-stream pumped storage project with an underground powerhouse comprising four units of 275 MW each. The scheme proposes six hours of peak power generation daily and nearly seven hours of pumping operation to recycle water between upper and lower reservoirs.
The project requires 64.07 hectares of forest land and 95.18 hectares of non-forest land.
The proposal was examined during the 48th meeting of the Expert Appraisal Committee (EAC) for River Valley and Hydroelectric Projects held on February 12, 2026, following which the ministry formally issued the ToR recently.
The EAC, however, raised ecological concerns and observed that the project should be treated as an “open-loop” pumped storage project instead of a closed-loop system because the lower reservoir is located on a non-perennial natural stream.
The committee noted that such streams play an important ecological role and hence directed the project proponent to prepare a detailed action plan to maintain downstream flows and protect ecosystem services. It also sought an assessment on catchment yield, downstream water availability and impacts on aquatic ecology.
The EAC also observed that the project site lies about 1.63 km from the eco-sensitive zone boundary of the Kanniyakumari Wildlife Sanctuary, necessitating detailed wildlife and biodiversity assessments.
Further, the ministry directed TNGECL to submit 10 years of certified water availability data for the stream feeding the lower reservoir, prepare plans for conservation of streams and rivulets, and explore possibilities for reducing forest land diversion.
The ToR conditions also require studies on fish diversity, riverine ecology, greenhouse gas emissions, muck disposal management and cumulative ecological impacts.
According to official documents, the TN government had earlier approved water allocation from the Paralayar river for initial filling and annual recoupment of the reservoirs, subject to operational safeguards.
Meanwhile, the ministry clarified that the ToR does not amount to final environmental clearance and there were more before construction can begin.