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August 26, 2011

Guidelines for bidding of 350 MW Solar PV projects under Indian Solar Mission released…

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 The guidelines for bidding of 350 MW of Solar PV projects under National Solar Mission in India has been released.

Some of the key highlights of the guidelines for developers:

Capacity

  • The capacity announced tentatively is up to 350 MW and the capacity available will be disclosed at the time of short-listing.
  • The Project capacity shall be at least 5 MW + 5% in case of Solar PV Projects and the maximum capacity of the Project shall be up to 20 MW± 5%. The plant capacity shall remain in multiples of 5 MW.
  • The total capacity of Solar PV Projects to be allocated to a Company including its Parent, Affiliate or Ultimate Parent-or any Group Company shall be limited to 50 MW.
  • The Company, including its Parent, Affiliate or Ultimate Parent-or any Group Company may submit application for a maximum of three projects at different locations subject to a maximum aggregate capacity of 50 MW.

Net Worth

  • Net Worth of the company should be equal to or greater than the value calculated at the rate of Rs 3 Crore or equivalent US$ per MW of the project capacity upto 20 MW.
  • For every MW additional capacity, beyond 20 MW, additional net worth of Rs. 2 Crore would need to be demonstrated.
  • The computation of Net Worth shall be based on unconsolidated audited annual accounts of the company.

Shareholding Pattern

  • The Company developing the project shall provide the information about the Promoters and their shareholding in the company to NVVN indicating the controlling shareholding before signing of the PPA with NVVN.
  • No change in the shareholding in the Company developing the Project shall be permitted from the date of submitting the RfS till the execution of the PPA.
  • However, this condition will not be applicable if a listed company is developing the Project.
  • After execution of PPA, the controlling shareholding (controlling shareholding shall mean more than 50% of the voting rights) in the Company developing the project shall be maintained for a period of (1) one year after commencement of supply of power. Thereafter, any change can be undertaken under intimation to NVVN.

Financial Closure

  • The Project Developer shall report Financing Arrangements within 210 days from the date of signing Power Purchase Agreement.
  • Developer would furnish within the aforesaid period the necessary documents to establish that the required land for project development is in clear possession of the Project Developer (minimum 2ha per MW) and the requisite technical criterion have been fulfilled.
  • The Project Developer would also need to specify their plan for meeting the requirement for domestic content.
  • In case of delay in achieving above condition as may be applicable, NVVN shall encash performance Bank Guarantees and shall remove the project from the list of the selected projects.

Part Commissioning

  • Part commissioning of the Project shall be accepted by NVVN subject to the condition that the minimum capacity for acceptance of part commissioning shall be 5 MW and in multiples thereof.
  • The PPA will remain in force for a period of 25 years from the date of acceptance of respective part commissioning of the project.

Domestic Content Requirement

  • The US has been making a lot of noise about the domestic content requirement and we have documented that in detail in our numerous essays including most recently last month when a  US trade official who asked not to be named told an Indian news paper that the United States Trade Representative’s office has recently submitted comments to the government of India expressing its concerns about the “trade-restrictive domestic content mandates”.
  • However for the mission, it was mandatory for Projects based on crystalline silicon technology to use the modules manufactured in India in the first batch. For Solar PV Projects to be selected in second batch during FY 2011-12, it will be mandatory for all the Projects to use cells and modules manufactured in India. PV Modules made from thin film technologies or concentrator PV cells may be sourced from any country, provided the technical qualification criterion is fully met.
  • Commenting on the guidelines, Madhavan Nampoothiri, Principal consultant Solar of EAI told Spark, “Bidders are likely to resort to more scientific due – diligence before offering the discounts. Serious players are expected to come in with scientific tools and techniques to determine the right tariff that can win in the bidding process.”
  • “ We now have limited field data also available that needs to be factored into the discounts in bids,” he added.
  • Consulting companies like EAI have developed their niche in renewable energy and are well qualified to provide such sophisticated bid advisory services that goes beyond regular financial or project analysis.
  • Developers can download the complete set of documents for bids using the following links…

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