Solar Mission project allotment from Sept

The initial stage of allotment of solar power generation projects under the the Jawaharlal Nehru National Solar Mission will start in September, with over 1,000 firms interested in the scheme that will allow the establishment of about 100 projects of 5Mw capacity each, Union minister for new and renewable energy Farooq Abdullah said.

The National Solar Mission, part of India’s National Action Plan on Climate Change, to be implemented in three stages, aims at establishing an installed capacity of 20,000 Mw of grid power, 2,000 Mw of off-grid solar applications and 20 million sq meters solar thermal collector area and solar lighting for 20 million households by the end of the 13th five-year plan in 2022

The first phase of the Mission, which runs up to March 2013, targets at feeding about 1000 Mw of of solar power, both photo voltaic and solar thermal, to the the grid.

To that end, the ministry of new and renewable energy had invited bids for a total of 500Mw solar photo voltaic power generation capacity, of which it will select about 100 firms through a reverse bidding process.

However, in order to have wider participation from solar power developers, only one application per company — including its parent, affiliate or ultimate parent or any group company — shall be permitted for development of one project.

The government, meanwhile, is mulling the establishment special purpose vehicles (SPVs) for facilitating equity funding for these projects.

"We recognise the need for equity financing to promote solar power projects. If we find there is funding gap, we will recommend a dedicated equity fund to the government," Indian Renewable Energy Development Agency (IREDA) chairman and managing director Debashish Majumdar said.

"Though, solar projects are viable through the current scheme, it will have to be seen how far it is acceptable to banks," he added.

Banks, so far, were not keen in financing solar power projects. "It may become comfortable for banks financing solar projects through a fund, which will reduce the risk perception," Majumdar said.

IREDA has signed a Memorandum of Understanding with Nabard, National Housing Bank and Central Bank of India for refinancing of projects for 200 MW or Rs 20,000 crore in the first phase. In 2010-11, it is targeting disbursement of Rs 1,200 crore.