This study investigates the successful implementation of water-based electrification in Meghalaya, India, focusing on the state’s hydro power development strategies, alignment with the Sustainable Development Goals (SDG 30), and the associated economic and environmental impacts. Using a qualitative case study approach, it draws on policy papers, project reports, and financial frameworks, supplemented by secondary interviews with key stakeholders such as government officials, project managers, and community members. Our findings reveal that despite utilizing only 13% of its hydro potential, Meghalaya’s integrated approach—combining efforts from central, state, private, and joint sectors, including Pumped Storage Hydro Projects—has significantly boosted socio-economic development, attracted private investment, created employment, and protected local water rights. The study highlights how effective financial incentives transformed the power sector into a revenue-generating model for sustainable energy. It offers a replicable strategy for regions with similar resources and underlines the importance of aligning local development with global sustainability goals. While the study is region-specific and may not reflect variations in hydro potential elsewhere, its insights are valuable for policymakers aiming to implement inclusive, sustainable water electrification initiatives.