India’s MNRE Issued Circular Regarding Extension in Scheduled Commissioning Date of RE Projects

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Ministry of New & Renewable Energy (MNRE) on 20.03.2020 has issued the circular on time extension in the scheduled commissioning date of RE projects considering disruption of the supply chains due to the spread of coronavirus in China or any other country as a force majeure event.

A Force Majeure (FM) means extraordinary events or circumstances beyond human control such as an event described as an act of God (as a natural calamity) or events such as a war, strike, riots, crimes. An FM clause in the contract frees both parties from contractual liability or obligation when prevented by such events from fulfilling their obligations under the contract. The firm has to give notice of FM as soon as it occurs and it cannot be claimed ex-post facto. If the performance in whole or in part or any obligation under this contract is prevented or delayed by any reason of FM for a period exceeding 90 (Ninety) days, either party may at its option terminate the contract without any financial repercussion on either side.

The circular stated that Ministry of Finance has clarified that the disruption of the supply chains due to spread of coronavirus in China or any other country should be considered as a case of natural calamity and Force Majeure Clause (FMC) may be invoked, wherever considered appropriate, following the due procedure. 

The notice also pointed that the Ministry, by way of various representations as well as a discussion during various meetings with Renewable Energy (RE) Developers and RE associations, has been receiving requests for granting appropriate time-extension in scheduled commissioning considering disruption of the supply chains due to spread of coronavirus in China or any other country as Force Majeure (FM). For the same it has been decided that All Renewable Energy implementing agencies of the Ministry of New & Renewable Energy (MNRE) is hereby directed to treat delay on account of disruption of the supply chains due to spread of coronavirus in China or any other country, as Force Majeure, The Renewable Energy implementing agencies may grant a suitable extension of time for projects, on account of coronavirus, based on evidence/documents produced by developers in support of their respective claims of such disruption of the supply chains due to spread of coronavirus in China or any other country and further, all project developers claiming aforesaid disruption and desirous of time extensions, shall make, a formal application to SECT! NTPC/ other implementing agencies, giving all documentary evidence(s) in support of their claim. SECT! NTPC/ Implementing agencies shall examine the claim objectively and grant appropriate Extension of Time (EoT) based on facts. 

The notice also clarified that while considering the requests for grant of extension of time on account of disruption of the supply chains due to spread of coronavirus in China or any other country, SECl/NTPC/any other implementing agency may fully satisfy itself that the claimants were affected due to disruption of the supply chains due to spread of coronavirus in China or any other country in the period for which extension of time has been claimed and implementing agencies shall also ensure that no double relief is granted due to overlapping periods extension granted for reasons eligible for such relief. 

The State Renewable Energy Departments, including agencies under Power/ Energy Departments of States, are also requested to treat delay on account of disruption of the supply chains due to spread of coronavirus in China or any other country, like Force Majeure and issue their instructions on the subject, the document stated.

The current world epidemic of coronavirus (Covid-19) outbreak has caused a slowdown in every sector and industries including the Renewable energy sector around the world.

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