SECI Modifies its 7 GW Solar Tender with 2 GW of Manufacturing Component

The bid submission deadline has also been extended to November 13, 2019


The Solar Energy Corporation of India Limited (SECI) has announced an amendment for its tender that calls for setting up 7 GW of solar projects coupled with 2 GW of the manufacturing component.

Recently, Mercom reported that SECI had increased the manufacturing linked solar tender, which it had initially floated in January 2019. The capacity has been increased from 6 GW to 7 GW.

In light of this tender, the Indian Renewable Energy Development Agency Limited (IREDA) has announced that it would provide term loans to solar manufacturing projects.

In a letter to SECI, Praveen Kumar, the chairman of IREDA, has expressed the agency’s interest in examining any such proposal from a qualified SECI bidder, which would be subject to meeting IREDA’s eligibility criteria.

Meanwhile, the SECI has amended various clauses of this tender to make it appealing for the interested developers.

SECI has notified that under the bidding package A, one-fourth of the cumulative allocated capacity will need to be commissioned within 48-60 months from the date when the power purchase agreements (PPAs) have been signed. The earlier notification stated that commissioned allocated capacity should within 48-60 months from the date of the issue of Letter of Award (LoA).

According to SECI, the solar power developers (SPDs) will now be required to set up a cumulative annual solar manufacturing capacity of 2 GW, which would be set up over two years from the date of execution of the contract agreement. However, earlier, it was stated that the selected developers would set up the cumulative annual solar manufacturing capacity of 2 GW for two years from the date of the LoA.

Further, the notification states that the solar PV cells should be domestically manufactured, using undiffused silicon wafer (generally called black wafer) classifiable under Customs Tariff Head 3818. Also, if the developer imports diffused silicon wafer (commonly called blue wafer) and is used as raw material for the manufacture of solar PV cells in India, then such solar cells will not be qualified as a domestically manufactured product.

Just last week, the Ministry of New and Renewable Energy (MNRE) issued a clarification that stated that some manufacturers have been importing semi-processed solar PV cells (blue wafer) and making final solar PV cells with little value addition in India.

According to the order issued by the MNRE, a solar PV cell will be considered domestically manufactured only if it has been processed and manufactured in India using undiffused silicon wafer or black wafer, classifiable under Customs Tariff Head 3818.

As per the amended clause, the bidder should be allowed to change its delivery point (within the same state) until the deadline for financial closure.

In the previous version, it was mentioned that the scheduled commissioning would be extended for projects up to 15 days, which has now been amended to 60 days (two months) after the readiness of the delivery point and power evacuation infrastructure and operationalization of long-term agreement.

Earlier, the tender stated that the initial validity of the second performance bank guarantee (PBG) amounting ₹800,000 (~$11,329)/ MW should be submitted within ten days before the execution of the PPAs. Meanwhile, the new clause states that the second PBG will amount to ₹500,000 (~$7,080)/MW should be submitted within 180 days of issuance of Letter of Award (LoA) or 10 days prior to the execution of PPAs whichever is earlier.

Moreover, the amended clause states that in case the manufacturing plant’s commercial operation date (MCOD) is delayed beyond 36 months from the effective date of the package-1 power purchase agreement (instead of the manufacturing contract agreement), then the balance amount available on the first performance bank guarantee (PBG) will stand forfeited.

Also, the tariff-related to setting up of solar PV power projects will be reduced to the minimum tariff of ISTS-connected solar tenders floated by SECI within the last one year.

SECI has emphasized that the solar power developer and the buying entity should follow the forecasting and scheduling process as per the regulations passed by state commissions. In the earlier amendment, it was between the solar power developer and SECI.

Lastly, in case of any of the bidding package (either bidding package A or B), the undersubscribed portion may be transferred to another bidding package which has been fully subscribed.   Earlier, SECI had not mentioned this point about under subscription.

This tender has seen many twists, turns, and modifications in the recent past. With the tender not attracting the anticipated interest from developers, SECI has also extended the bid submission deadline yet again. The new date of bids submission is November 13, 2019.

Previously, in September 2019, SECI had extended the last date for bid submission to October 11, 2019. The initial deadline was September 11, 2019, as reported by Mercom earlier.