New Delhi: The Ministry of Renewable Energy has reintroduced the conditions that would require renewable energy companies to furnish performance bank guarantee and earnest money while bidding for projects.
The ministry told public intermediaries on Thursday: Dry, NTPC And NHPC Auctioning renewable projects to introduce terms in their upcoming tenders.
Under the new conditions, bidders for projects will have to deposit 4% of the project cost as bank guarantee if the site is specified by them and 5% of the project value if the site is selected by the generator.
Bidders will also have to deposit 2% of the project cost as Earnest Money Money to be eligible to bid for the projects.
The ministry had suspended bank guarantee and earnest money requirements to ease the burden on developers during the Covid-induced slowdown.
Letter of Comfort (LoC) from central sector green lender IREDA was allowed to deposit earnest money from intermediaries as an alternative to bank guarantees and corporate guarantees. The move was estimated to free up around Rs 7,000 crore for developers.
Industry analysts said the re-implementation of these conditions will increase the funding needs of developers at a time when many of them are grappling with rising input costs, especially cost of modules, and the imposition of basic customs duty next year. After that ready for further growth. To promote domestic manufacturing.
Access to funding remains a barrier for domestic renewable energy companies and a large segment of solar and wind projects are supported by foreign investment.
But others said the terms would keep non-serious players out of the bidding process, allowing fair competition among serious companies.
Non-serious players have been known to enter the field and bid unrealistically low tariffs to get projects up for evaluation but ultimately fail to deliver. This delays projects as they have to be re-submitted in most cases.
The ministry told public intermediaries on Thursday: Dry, NTPC And NHPC Auctioning renewable projects to introduce terms in their upcoming tenders.
Under the new conditions, bidders for projects will have to deposit 4% of the project cost as bank guarantee if the site is specified by them and 5% of the project value if the site is selected by the generator.
Bidders will also have to deposit 2% of the project cost as Earnest Money Money to be eligible to bid for the projects.
The ministry had suspended bank guarantee and earnest money requirements to ease the burden on developers during the Covid-induced slowdown.
Letter of Comfort (LoC) from central sector green lender IREDA was allowed to deposit earnest money from intermediaries as an alternative to bank guarantees and corporate guarantees. The move was estimated to free up around Rs 7,000 crore for developers.
Industry analysts said the re-implementation of these conditions will increase the funding needs of developers at a time when many of them are grappling with rising input costs, especially cost of modules, and the imposition of basic customs duty next year. After that ready for further growth. To promote domestic manufacturing.
Access to funding remains a barrier for domestic renewable energy companies and a large segment of solar and wind projects are supported by foreign investment.
But others said the terms would keep non-serious players out of the bidding process, allowing fair competition among serious companies.
Non-serious players have been known to enter the field and bid unrealistically low tariffs to get projects up for evaluation but ultimately fail to deliver. This delays projects as they have to be re-submitted in most cases.
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