IREDA Amends 5 GW CPSU Solar Tender, Raises Tariff Cap to ₹2.45/kWh

The bid submission date pushed to May 31, 2021; the maximum permissible limit for VGF reduced to ₹5.5 million


The Indian Renewable Energy Development Agency (IREDA) has extended the deadline for the 5 GW grid-connected solar projects (Tranche-III) under the central public sector undertaking (CPSU) program (Phase-II).

The implementing agency has extended the bid submission date to May 31, 2021, and bids will be opened on June 9. Earlier, the last date to submit the bids was May 15.

The tender was floated in January this year, and IREDA had capped the tariff for the project at ₹2.20 (~$0.030)/kWh. Following the announcement, Telecommunications Consultants India Limited floated an expression of interest to select partners for setting up solar projects under this program.

In March 2019, the President of India had accorded approval to implement Phase-II of the CPSU program to set up 12 GW of grid-connected projects for self-use or use by government entities.

IREDA has also issued amendments to the request for selection issued for the projects, and the ceiling tariff for the projects has been increased to ₹2.45 (~$0.033)/kWh from the earlier ₹2.20 (~$0.030)/kWh.

Another amendment to the request for selection says that the maximum permissible limit for the viability gap funding (VGF) will be kept at ₹5.5 million (~$74,932)/MW for the projects. Earlier, the sum was ₹7 million (~$95,368)/MW.

Irrespective of the capacity awarded to the developer, the scheduled commissioning date for the full capacity of the project, per the amendment will be on or before 30 months from the date of issuance of the letter of award (LoA) or the letter of intent (LoI). Earlier, if the capacity awarded to a developer was equal to or less than 500 MW, then the time for the scheduled commissioning of the project’s full capacity was 24 months from the date of the issuance of the LoA or the LoI. For a capacity of more than 500 MW, the developer had an additional six months to commission the balance capacity above 500 MW.

The maximum time allowed for the commissioning of the full project is now limited to 36 months from the date of the issuance of the LoA or LoI. Earlier, it was limited to 30 months if the allocated capacity was up to 500 MW and 36 months if the allocated capacity was more than 500 MW.

IREDA further stated that 50% of the VGF would be released once the contract is awarded to the engineering, procurement, and construction (EPC) contractor by the developer. The developer must sign the EPC agreement within 12 months from the date of the issuance of the LoA. Earlier, the developer was scheduled to sign the contract with the EPC contractor within six months.

Also, the selected bidder has to submit the duly signed copy of the award of contract to the EPC contractor within 365 days from the date of the issuance of the LoA. Earlier, the bidder had to submit the documents within 180 days.

According to another amended clause, if the bidder is not able to submit the bank guarantee or sign the EPC contract within 365 days, IREDA will have the right to encash the earnest money deposit submitted by the developer. The time limit earlier was 180 days.

The implementing agency has also added a new clause, which says that the setting up of solar projects for supplying auxiliary power for a power generation project will be governed as per the existing regulations. The government producers who want to use renewable power as auxiliary power for power generation projects may specifically inform the Central Electricity Regulatory Commission or State Electricity Regulatory Commissions, or Joint Electricity Regulatory Commission.

Recently, the Ministry of New and Renewable Energy issued amendments for setting up 12 GW of solar projects with VGF by CPSUs for self-use or use by the government entities.

According to Mercom’s India Solar Tender Tracker, a total of 3.5 GW of solar tenders have been issued under the CPSU program.