Kerala is endowed with vast small hydro power potential to the tune of about 700 MW. Government of Kerala has issued several guidelines from time to time for the development of small hydro power project since 1992. The measures have encouraged private investment to harness green energy from natural resources. Till the end of December 2011, 19 Small Hydro Power projects with an installed capacity of 145.65 MW have been commissioned in the State. The State needs to evaluate the experience with them and to fine‐tune policy so as to speed up investments in the area. This Policy will be known as Kerala Small Hydro Power Policy, 2012 and will be applicable to projects with installed capacity upto 25 MW. The Policy will come into operation with effect from the date of its publication in the Official Gazette of the State. This Policy is directed towards a greater thrust on overall development and promotion of Small Hydro Power Projects.