Ministry to Expedite Setting up of Renewable Energy Equipment Manufacturing Zones

The last date to submit the bids has been extended to June 26


The Ministry of Power has amended the expression of interest issued in April to set up manufacturing zones for power and renewable energy equipment.

As per the amendments, after approval of the detailed project report (DPR), the special purpose vehicle (SPV) will start executing works relating to the common infrastructure facility or common testing facility in collaboration with the Central Power Research Institute, National Institute of Solar Energy, and National Institute of Wind Energy.

Works relating to common infrastructure facility will have to be completed within 18 months and common testing facility within 36 months from the approval of DPR. Earlier, the time was set at 48 months from the approval of DPR.

The last date to submit the bids, which was June 8, 2022, has been extended to June 26.

The tender was floated by the Ministry of Power last month.

A new clause states that the SPV should allot land to the manufacturers on an outright sale basis or on a long-term lease basis for a minimum of 35 years or for a lesser time if requested by manufacturers. The SPV will allocate the land as per the agreed lease rental rates and terms and conditions in the proposal submitted.

The manufacturing zone will produce solar components like modules, inverters, ingots, backsheets, module mounting structures, and wind components like blades, hubs, shafts, and nacelles.

On the topic of private players being allowed to participate as an SPV with the state governments, the ministry clarified that a private entity or a central public sector undertaking (CPSU) in partnership with the state government could submit a proposal to set up manufacturing zones in their states.

The private entity, CPSU, and the state government should form a joint venture company wherein the state should hold a minimum of 26% equity. The formation of an SPV is not mandatory for states. The state government, state government entity, or the state PSU can submit a proposal to set up a manufacturing zone in partnership with the state government.

The ministry clarified that private entities could exit the project after manufacturing units are set up in at least 50% of the area earmarked or ten years after the award, whichever is earlier.

Replying to a query from a stakeholder as to whether anybody can set up manufacturing activities within the zone (including private) in plug-and-play mode, the ministry said that the manufacturing zone would be available to any investor.

To another query about the minimum extent of land required to be demarcated for common testing facility, the ministry stated that 150 acres would be made available for individual manufacturing units. For the development of common testing facility, the provision of land should be sufficient for testing facilities that may be required for the renewable and power equipment to be manufactured in the manufacturing zone.

In the budget announcement for the financial year (FY) 2022-23, the finance minister announced an additional ₹195 billion (~$2.60 billion) for the production linked incentive (PLI) program, which was previously at ₹45 billion (~$590.65 million) to support vertically integrated gigawatt-scale manufacturing of high-efficiency solar modules.

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