Power News We love to talk!

MAY 31 2018

Solar developers seek Centres help over payment issues in Karnataka

  • Economic Times, ET Bureau / Hyderabad
  • Created: Thu 31st MAY 2018

 

The National Solar Energy Federation of India (NSEFI) has appealed to Minister of Power and New & Renewable Energy RK Singh to intervene to get private solar developers that have commissioned projects in Karnataka their payments.

The projects, under National Solar Mission Phase-II Batch-III Tranche-V and with power purchase agreements (PPAs) signed with Solar Energy Corporation of India (SECI), have been commissioned and are feeding power to the grid. But the power producers have not been receiving payments due to the delay in assigning scheduled commissioning date for these projects.

According to industry sources, the projects of major players such as Hero Future, Adani Group, ACME, and Actis, with a cumulative capacity of 970 MW, are stuck. This means around 6,000-crore loans could become non-performing if the matter is not resolved.

In the letter dated May 23 (BusinessLine has the copy of the letter), NSEFI notes that commissioning of the projects scheduled for September 2017, was delayed due to various approvals not coming in. The developers then approached SECI seeking extension of the financial closure timeline and the project commissioning time frame.

The meeting convened by the Empowered Committee on September 18, 2017, resulted in SECI adopting a methodology to calculate the liquidated damage and time extension for the financial closure and project commissioning. However, even after that the Commercial Operational Date (COD) for these projects is pending and the developers are unable to receive payments despite feeding energy to the grid.

At the same time, SECI is unable to give provisional COD of plants even after visiting the projects and signing the commissioning minutes of meetings, developers say.

“Realisation of payments against the sale of energy has become extremely critical as they (solar power developers) are unable to service the debt obligations which may lead to default of provisions of loan agreement executed with project lenders,” the NSEFI letter said.

“The lenders are also asking us to provide clarity on the extension of scheduled commissioning dates of the project. In the absence of extension of timelines from SECI/MNRE and given the new RBI regulations, banks don't have any room to not recognise NPA,” it adds.

NSEFI has asked not to link payments with submission of land compliance documents as the plants are already commissioned, as allowed by the Committee in September, 2017. It has also requested granting of “provisional COD” to the affected projects so that developers can receive payment against the energy sold.

The Association requested the Minister to intervene in the matter so as to avoid developers' loans turning into NPAs. However, according to sources close to the association, no communication has been received from the ministry, yet.

Tags

Adani Enterprise Limited Karnataka Grid Renewable Energy Solar Energy Ministry of New and Renewable Energy Energy United States National Solar Mission RBI Power Adani Group India solar power Solar Solar Energy Corporation Of India

Related News

  • Shell plans to double Hazira LNG plant capacity - India head  Read more
  • Coal blocks: Eco nods before auction may delay bidding further  Read more
  • Centre plans 25 per cent greenhouse gas emission cut by 2020: Minister  Read more
  • Govt should call for 5,000-6,000 MW tenders for wind power sector: IWTMA  Read more
  • Adani gives final approval for $4 billion Australia coal mine  Read more
  • Northeast region adopts renewable energy to overcome power crisis  Read more
  • CIL strike: Govt open to discussions, says Goya  Read more
  • Coal India forced to change sales tactic  Read more
  • Singareni Collieries to take up 10 new mines next fiscal  Read more
  • Coal Trumps Solar in India  Read more