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Resource crunch could delay second phase of India’s national solar mission

According to reports, the second phase of the national solar mission could get delayed due to lack of government finance for the upcoming projects. “Government investment is not flowing in, so execution of the next phase will get delayed,” said a top official at ministry of new and renewable energy.

For the second phase of the solar mission, ministry has decided to go for ‘viability gap funding (VGF)’ model for the solar power projects. Out of 3,000 mw, for which the reverse bidding will happen in June this year, 2,500 mw will be funded via VGF. Under this option, bidders would bid for VGF requirement in Rs/mw and the bidder with minimum VGF requirement would be selected. Balance 500 mw will be bundled with conventional power like the first phase.

Ministry is looking at the finance ministry and ministry of power to allocate resources but has been disappointed till yet. Finance ministry has not yet released the national clean energy fund (NCEF) though the allocation for disbursement has been approved. Grants of 160.80 crore for FY 2011-12 and 35.88 crore for FY 2012-13 under budgetary head ‘Grid Interactive and Distributive Renewable Power’, and 6.55 crore for FY 2011-12 under budgetary head ‘Research, Design and Development in Renewable Power’ have been allocated to MNRE, but not yet received.

“Tight fiscal deficit situation is preventing the government from releasing any funds including NCEF,” said the official.

One comment

  1. Why donate VGF to few corporate which in turn will be a money for ensuing election as few experts say and that too without any credibility like the exemptions / subsidy in biomass plants which have become defunct…

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