MNRE Amends Guidelines for 12,000 MW CPSU Phase-II Solar Project Scheme

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The Ministry of New and Renewable Energy (MNRE) has issued the guidelines for the implementation of the Central Public Sector Undertaking phase II program for the construction of 12,000 MW grid-connected solar projects with Financing of the Profitability Gap (VGF) changed.

It said that now power produced could be used on payment of mutually agreed usage charges of not more than Rs 2.45 per unit

According to the amended guidelines, power produced by the government producers could be used on payment of mutually agreed usage charges of not more than Rs 2.45 per unit. Earlier, it was mutually agreed usage charges of not more than Rs 2.80 per unit.

It also stated that the maximum allowable VGF was kept at Rs 0.55 crore per MW, which was previously kept at Rs 0.70 crore per MW. VGF is provided under the program with the aim of covering the cost differential between domestically manufactured solar cells and modules and imported solar cells and modules.

VGF will be released in two tranches as follows:

1)50 percent will be given on the grant of a contract to the EPC contractor (including in-house EPC Division)
2) Rest 50 percent will be given on successful commissioning of the full capacity of the project.

The VGF provided under the Scheme can be used by the Government Producers as their equity in solar power projects being set up under this Scheme.

Regarding project commissioning timelines, the modified guidelines state that solar power projects would have to be commissioned within a period of 30 months from the date of letter of award.

However, it added that in the order that MNRE can also set a shorter schedule to expedite the implementation of the system and give impetus to domestic solar PV manufacturing.

Earlier guidelines had set a projects commissioning timeline of within 24 months from the date of letter of award for projects upto 500 MW capacity and for projects more than 500 MW it was 24 months while for the balance capacity it was to be commissioned within next six months.

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