Govt may not fine green project exits

Until now, such surrender of projects wasn't allowed. In case developers sought to abandon projects, the government forfeited their bank guarantees

- Rituraj Baruah

In a rare move, the government is likely to allow renewable energy developers to relinquish stalled projects without invoking bank guarantees, provided power purchase agreements (PPAs) have not been signed, two people aware of the matter said.

Until now, such surrender of projects was not allowed. Further, in case developers sought to abandon such projects, the government forfeited their bank guarantees. If the move is implemented, there might be a cutoff date for such projects which will be given the exemption.

"Ways are being considered to resolve the issue of unsigned power purchase agreements. Government may bring in some relaxation for these projects and allow them to surrender the projects bagged earlier and the bank guarantees (BGs) would be refunded," said the first of the two persons cited earlier, both of whom spoke on the condition of anonymity.

Typically, a successful bidder for a renewable energy project needs to submit performance bank guarantees to the tendering agency, in this case renewable energy implementing agencies (REIAs) like Solar Energy Corp. of India (Seci), NTPC, NHPC and SJVN, and the bidder gets a letter of award (LoA). In some recent Seci tenders, bank guarantees was between ₹22 lakh per megawatt (MW) and ₹39 lakh per MW.