India postpones 750 MW PV auction for a second time

The Solar Energy Corporation of India (SECI), the government agency overseeing India’s Jawaharlal Nehru National Solar Mission (JNNSM), has delayed an auction for 750 MW of solar power capacity for a second time after developers expressed concern that state utilities may have trouble paying for the power generated by projects developed under the auction. Tenders for the auction are now due on Jan. 20, 2014 instead of Dec. 28, 2013. The agency is working to reassure developers and expects to publish amendments to its policy soon.
When it first announced the request for selections to set up 750 MW of grid-connected PV projects under Phase II, Batch I of the JNNSM in October 2013, SECI said that bids would be due on Nov. 29, 2013. In late October, this was changed to Dec. 28. SECI was originally scheduled to publish a short list of preferred projects in mid-January.
Projects awarded licenses through the auction will be developed under a Viability Gap Fund (VGF) mechanism that covers up to 30% of the project cost or 2.5 crore INR ($402,000) per MW, whichever is lower. Developers will submit bids specifying the amount of funding they seek – the lowest bids will win a government grant and a development license. Remaining funding will have to come from the developer itself or from financing agreements. The grants will be released gradually, with the first 50% paid out upon commissioning and the remaining funds paid out in 10% increments over the following 5 years. Projects selected in the auction are expected to be online by the end of April 2015 and must be between 10 and 50 MW (AC) in size
According to the auction guidelines, projects developed under Phase II, Batch I will receive 5.45 INR per kWh for 25 years.

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