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Confusion in Solar Industry as deadline for submitting financing documents by developers nears

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.

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 on July11.

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.”

Since, on July 12, the PV magazine carried a story that said, the projects which didn’t achieve financial closure will be cancelled.

Furthermore the report added, a spokesperson at NTPC Vidyut Vyapar Nigam Ltd. (NVVN) told Mercom Capital Group that the capacity for the next batch of projects will be increased based on the size of the cancelled projects.

The funding deadline for the first batch of solar projects under the Indian solar mission has now passed. While the final project numbers have not been released, it appears that roughly half failed to secure funds, the report adds.

According to the MNRE, approximately half the projects failed to achieve financial closure by the given deadline. One senior MNRE official said that just 17 photovoltaic projects and two concentrated solar power (CSP) projects provided financial closure details. This is out of 30 photovoltaic projects, worth 150 megawatts, and seven CSP projects, worth 470 megawatts that were approved in the batch.

A few days later, on July 15, the Hindu BusinessLine said, most of the companies that have won bids to put up solar power projects under the Jawaharlal Nehru National Solar Mission have achieved financial closure. The total capacity of all the projects that have confirmed financial closure exceeds 500 MW, Mr Anil Agarwal, Chief Executive Officer, NTPC Vidyut Vyapar Nigam (NVVN) – the nodal agency for conducting the selection process for the first stage of JNNSM – told Business Line.

The ‘500-plus MW’ includes all the seven solar thermal projects, whose total capacity is 470 MW. The project awardees have informed NVVN of their financial closure, but they have time till July 24 to submit the papers.

Obviously there seems to be a big disconnect between the number of projects that MNRE has said has achieved financial closure and what  NVVN seems to be talking about.

We will have to wait until July 24 to see how many developers actually submit their financing documents. What we understand when talking to industry sources is that the interpretation used for financial closure by NVVN  and MNRE are actually different which is the only reason that could explain such a big difference in the number of projects each of them are saying has achieved financial closure.

 This leads us to the pertinent question of  which of those definitions is actually  that mentioned in the original National Solar Mission policy and conditions.

As readers of Panchabuta are aware, in December last year, a few days  after the reverse bidding of the National Solar Mission, the CEO of NTPC Vidyut Vyapar Nigam Ltd (NVVN) A.K. Goyal had resigned and the current CEO,Mr Anil Agarwal took over, though no official reason was given for the resignation.

With the above discussed widespread confusion prevailing, the nascent solar industry in India is eagerly waiting and watching for the July24 deadline and the subsequent announcements from the MNRE and NVVN. Panchabuta expects about 15-17 PV projects and 4-5 solar thermal projects to provide documentation for financial closure by the July 24 deadline.


  1. I think you are painting a very pessimistic picture , out of 30 PV SPDs at least 25 will submit all the documents.

    And in Solar Thermal section out of total of 8 at least 7 will complete these formalities and in all probability all 8 will clear this hurdle.

    To me the future of solar looks bright in India

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