1,500 crore fund for solar projects?

The Government of India is planning to set up a Rs 1,500 crore fund to avoid delays in releasing viability gap funding (VGF) for solar power developers. VGF is a scheme set up under the Jawaharlal Nehru National Solar Mission (JNNSM).

In order to ensure the timely payment of VGF to the developers of solar power capacities, State-run Solar Energy Corporation of India (SECI) is setting up a fund of Rs 1,500 crore as security mechanism. This fund will be under the JNNSM.

According to an official, this fund will be enough to cover three months payment for various VGF schemes approved by Ministry of New & Renewable Energy (MNRE). The fund is set up to help the government reach the target of adding 100GW of solar power by 2022.

Using this fund, the government can also cover any delays or defaults in the payments to SECI by entities like discoms/state utilities/bulk consumers. This ensures that there is a timely payment to the developers so they can work with less pressure.

The fund will also provide support to SECI to help get financial implications for those regulatory/policy/legal/evacuation/ open access requirements that cannot be predicted when the scheme is approved.

In order to run this fund, SECI will open a separate flexi bank account. SECI will also monitor and make the payments as per the power purchase agreement.

The VGF mechanism was implemented in the Phase II of JNNSM Phase II. The scheme was launched to encourage solar projects developers in a transparent and competitive process. The first scheme under VGF was for 750 MW capacity. It has been successfully implemented.

The second scheme of VGF has been implemented by the ministry for setting up 2000 MW of grid connected solar PV projects in August last year. Furthermore, additional 5000 MW through VGF support was also approved this year.

Image Reference: https://pixabay.com/photos/solar-system-roof-power-generation-2939560/