Government to set up Rs 1.5k crore payment security fund for solar projects
“State-run Solar Energy Corporation of India (SECI) will set up a Rs 1,500 crore payment security mechanism (PSM) to ensure timely payment of VGF to the developers of solar power capacities under the JNNSM,” a senior official said. The official further said, “This fund will have a corpus to cover three months payment for the various VGF schemes approved by Ministry of New & Renewable Energy (MNRE) from time to time.” The fund is significant as the government has set the target of adding 100GW of solar power by 2022. The fund will also cover delays/defaults in payments to SECI by entities (discoms/state utilities/bulk consumers), so that timely payment to developers could be ensured. It will provide support to SECI to meet financial implications on account of regulatory/policy/legal/evacuation/ open access requirements, not foreseen at the time of approval of the schemes as well as difficulties arising during implementation of power purchase agreement or power service agreement or VGF securitization. SECI will open a separate flexi bank account to create and operate the fund. It will also be responsible to make the payments within scheduled timeframe as per the power purchase agreement. Government introduced VGF mechanism while implementing JNNSM Phase II, wherein solar projects developers are selected through transparent competitive process to supply power at a pre-determined tariff. First scheme under VGF mode for 750 MW capacity has already been implemented. The ministry implemented second scheme for setting up of 2000 MW of grid connected solar PV projects in August last year. Another scheme for 5000 MW through VGF support was sanctioned in February this year. Besides these schemes, the ministry has also sanctioned several other schemes under VGF mode like solarisation of Indo-Pak Border and special scheme for high visibility areas. The fund will also cover other solar energy schemes approved by the Ministry in coming days.