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					</table><p>The Ministry of New and Renewable Energy (<a href="https://mnre.gov.in/" target="_blank" rel="noopener">MNRE</a>) has directed the Public Sector Undertakings (PSUs) to blacklist renewable energy developers that fail to complete the project within the prescribed deadline. The ministry said that the blacklisting could span 3-5 years.</p>
<p>The ministry’s communication was directed to <a href="https://www.seci.co.in/" target="_blank" rel="noopener">Solar Energy Corporation of India</a>, <a href="https://www.ntpc.co.in/" target="_blank" rel="noopener">NTPC</a>, and <a href="http://www.nhpcindia.com/" target="_blank" rel="noopener">NHPC</a>. These companies are engaged in issuing tenders for private sector companies to develop renewable energy projects.</p>
<p>The ministry also asked these PSUs to encash the bank guarantees of the developers in case of delay in commissioning projects.</p>
<p>Industry sources said that while encashing bank guarantees for delayed commissioning is a <a href="https://mercomindia.com/regulator-restrains-seci-from-encashing-bank-guarantee/" target="_blank" rel="noopener">norm</a>, blacklisting companies is alarming.</p>
<p>Additionally, sources said that tender or bid documents come with specific clauses about conditions that would trigger the encashment of bank guarantees, but they don’t usually contain any blacklisting clause.</p>
<p>However, in its communication, the ministry has said that encashing bank guarantees and blacklisting are in accordance with the Government&#8217;s General Financial Rules (GFR) and apply to all tenders and bids.</p>
<p>The <a href="https://doe.gov.in/" target="_blank" rel="noopener">Finance Ministry</a> recently amended the GFR, 2017, to include provisions for blacklisting organizations that do not meet the government-prescribed deadlines.</p>
<p>&#8220;Even if the blacklisting provision is not part of the tender or bid documents, it can be enforced as it&#8217;s part of government rules under GFR. However, the ministry&#8217;s order is likely to inflict damage to the sector as it could deter investors,&#8221; said Aditya K Singh, Associate Partner at Link Legal.</p>
<p>A developer said that the ministry’s direction is a result of failure on the part of many developers to commission projects despite extensions provided. He added that the ministry’s harsh approach stems from its belief that despite extending all help to developers (extension of timelines, proposed <a href="https://mercomindia.com/power-minister-confirms-almm-exemption-two-years/" target="_blank" rel="noopener">suspension</a> of ALMM), they haven’t responded in kind.</p>
<p>MNRE had provided a blanket <a href="https://mercomindia.com/covid-19-lockdown-mnre-deadline-renewable-under-construction/" target="_blank" rel="noopener">extension</a> on timelines for all under-construction projects in 2020 due to Covid-19. In December last year, the ministry granted a timeline <a href="https://mercomindia.com/daily-news-wrap-up-mnre-extends-timeline-solar-cpsu/" target="_blank" rel="noopener">extension</a> until September 30, 2024, for solar projects under the Central PSU program being implemented by SECI and the Indian Renewable Energy Development Agency (IREDA) on account of supply chain disruptions.</p>
<p>Earlier this year, in January, the ministry <a href="https://mercomindia.com/mnre-timeline-extension-solar-projects-bcd-announcement/" target="_blank" rel="noopener">extended</a> the timeline for the solar and hybrid power projects until March 2024. The bids for these projects were finalized before the Basic Customs Duty came into effect on April 1, 2022.</p>
<p>However, another developer said that the project commissioning delays are due to several factors, including the demand-supply mismatch in domestic modules due to the Approved List of Models and Modules (ALMM) mandate. He added that the proposal to blacklist developers might be counterproductive for the industry.</p>
<p>The government is under pressure to meet its non-fossil energy targets. But the developers are struggling with the financial viability of projects considering the multiple challenges of module price rise, growing interest rates, rupee depreciation, land acquisition, and power evacuation infrastructure availability.</p>
<div class="saboxplugin-wrap" itemtype="http://schema.org/Person" itemscope itemprop="author"><div class="saboxplugin-tab"><div class="saboxplugin-gravatar"></div><div class="saboxplugin-authorname"><a href="https://cms.mercomindia.com/author/sumit-jha/" class="vcard author" rel="author"><span class="fn">Sumit Jha</span></a></div><div class="saboxplugin-desc"><div itemprop="description"><div class="designboxt"><img class="alignleft" style="border-radius: 50%;height: 50px;margin-top: -4px;border: 1px solid #00b451" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2022/10/Picture2.jpg" width="50" /><strong style="text-decoration: underline">Sumit Jha,</strong> Assistant Managing Editor at Mercom India</div>
<div class="designboxt"><a href="https://mercomindia.com/author/sumit-jha/" target="_blank" rel="noopener">More articles from Sumit Jha.</a></div>
<div class="authorboxn"><img class="alignleft" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2022/10/Picture2.jpg" width="102" height="102" /><a href="https://mercomindia.com/author/sumit-jha/" target="_blank" rel="noopener"><strong style="color: #00b451">Sumit Jha </strong></a>is the Assistant Managing Editor at Mercom India. Prior to Mercom, Sumit worked as a journalist for over a decade, covering the energy sector for Reuters, CNBC-TV18, Bloomberg TV India, and Financial Express, among others. Sumit holds a diploma in print journalism from the Indian Institute of Mass Communication, Delhi, and a Bachelor of Engineering (B.E) from Manipal Institute of Technology.<a href="https://mercomindia.com/author/sumit-jha/" rel="noopener noreferrer">More articles from Sumit Jha</a></div>
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Renewable Energy Developers to be Blacklisted for Project Delays: MNRE

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