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India Solar Power Projects to Submit Funding Proof by July 24

As one of the eight National Missions outlined in National Action Plan on Climate Change, the Jawaharlal Nehru National Solar Mission (JNNSM) specifically focuses on solar energy and its role in minimizing future emissions.

 The Government has launched JNNSM in January, 2010 with a target of 20,000 MW grid solar power (based on solar thermal power generating systems and solar photovoltaic (SPV) technologies), 2000 MW of off-grid capacity including 20 million solar lighting systems and 20 million sq.m. solar thermal collector area by 2022

Government has also approved the implementation of the first phase of the Mission (upto March, 2013) and the target to set up 1,100 MW grid connected solar plants including 100 MW of roof-top and small solar plants and 200 MW capacity equivalent off-grid solar applications and 7 million sq.m. solar thermal collector area in the first phase of the Mission, till 2012-13.

In May this year, an official from the Ministry of New and Renewable Energy had said that, India will cancel licenses for solar projects awarded to companies under its first auction if they don’t obtain loans to build their plants by July 9.

“That’s it. They’ll be over,” Deepak Gupta, secretary at the Ministry of New and Renewable Energy, said in an interview in New Delhi to Bloomberg when asked what would happen to projects that don’t meet the deadline. Rather than fining companies for delays, their project licenses will be revoked, he said.

According to reports today, companies awarded permits in India’s first national auction of rights to build solar power plants have until July 24 to submit documentation to prove they’ve arranged funding, an official said.

The companies must show they secured funding on or before July 9, said Anil Kumar Agrawal, chief executive officer of NTPC Vidyut Vyapar Nigam Ltd., or NVVN, the state-run power trader that’s overseeing the solar program.

“Those deadlines are sacrosanct,” Agrawal said by telephone from New Delhi. “There will not be any extension.”

It seems like  the developers have been given a final chance to obtain funding. Consultants and investment bankers working in the solar space have indicated that a number of project developers are now trying to divest equity in their project at reasonable valuations so that the permits are not cancelled. However, they point out that, as most of these projects have their PPAs signed at very unattractive tariffs there  has been very little response from potential buyers. Developers we spoke to have indicated that they hope these permits are cancelled and added to the quota that is going to be bid out next month.

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