- Amendments regarding the setting up of 12 GW of solar projects with VGF support have also been announced
- The total cost of this new projected is estimated to be Rs 480 billion
Indian Renewable Energy Development Agency (IREDA) has replaced Solar Energy Corporation of India Limited (SECI) as the implementing agency for viability gap funding (VGF) supported 12 GW of solar projects. VGF translates to a grant for the projects that are economically justified but are not viable financially.
The Ministry of New and Renewable Energy (MNRE) has also issued new amendments in lieu setting up of solar projects worth 12 GW with the support of VGF. These are to be set up by Central Public Sector Undertakings (CPSU) for self-use or use by government agencies.
Total project cost approximately Rs 480 billion
The total project cost, as per the new announcements, is estimated to be worth Rs 480 billion. These new amendments also point out that the power generated by government entities can be used by other government agencies directly, or through distribution companies (DISCOMS).
A rate of Rs 2.80 per kWH has also been agreed upon. Earlier this rate was fixed at Rs 3.5 per kWH.
The VGF, in case of solar power, is provided to cover the difference between the domestically produced solar cells and the ones imported. This also covers the difference between the costs of solar modules produced in the country and the ones imported.
IREDA to handle the project
MNRE has stated that IREDA will be handling the project for the ministry. IREDA, apart from the whole project, will also be conducting bidding through the VGF route. SECI used to handle such projects for MNRE in the past.
Solar power projects with less than or equal to 500 MW power generation capabilities will have to be commissioned within 24 months from the date of letter of award (LoA). Earlier, the time frame for such projects used to be 18 months. The last tender announced by SECI under this program was in August 2019.