The Cabinet Committee on Economic Affairs (CCEA), extended the time period for thermal power producers to receive 'mega power' certificate to 10 years, from existing five years.
Power developers such as GMR Energy, Lanco Power, IL&FS, Essar Power, Torrent Energy etc stand to benefit from the scheme.
The Mega Power Policy in 2014 identified 25 power plants totaling 32,300 MW to earn additional benefits under the policy. The incentives provided under the scheme are tax benefits such as lower customs duty and excise duty exemption for equipment procurement. The policy is for over 1000 MW of projects and was to expire on March 31, 2017.
"Cabinet approves extension of time period for furnishing final Mega Certificates to the tax authorities for the provisional mega projects to 120 months instead of 60 months from the date if import," said the Government in a statement.
It is expected that consumers will benefit by way of lower tariffs. Banks that have financed these projects would also be able to get some relief on their stressed assets. Power plants under construction will benefit by way of savings to the tune of Rs 30-35 lakh per MW, said a person close to the development.
To avail the benefit, the power producers need to sign power purchase agreement for at least 70 per cent of power generated through competitive bidding and balanced through regulated market.
Due to financially belaguared power distribution sector, no state except two have come forward to sign any power purchase agreement for past four years. This has impacted power producers who could not avail the benefits due to lack of power purchase.
"This is expected to enable developers to competitively bid for PPAs in future. Increased power availability will boost overall growth of the country and ensure that cost of power to the consumers does not increase," said the government's statement.
