CCEA nod to amend mega power policy to push 31GW stalled projects

The Cabinet Committee on Economic Affairs (CCEA) on Friday approved amendments in the Mega Power Policy to push 31 GW stranded projects entailing an investment of Rs 1.5 lakh crore. The initiative is mainly aimed at bringing down power tariff for making electricity more affordable and achieving the ambitious goal of 24X7 power for all.

“The Cabinet Committee on Economic Affairs, chaired by PM Modi has approved the time period for the provisional mega projects (25 projects), for furnishing the final mega certificates to the tax authorities be extended to 120 months instead of 60 months from the date of import,” a statement said.

Developers would be required to keep their fixed deposit receipt (FDR) or bank guarantee (in lieu of duty exemption claimed) alive. It further said that the CCEA also approved 25 Provisional Mega certified projects for Mega Policy benefits in proportion to the long-term power purchase agreement (PPA) tied up, as permitted under the Mega Power Policy, once the specified threshold capacity of the project gets commissioned. However, the money realised by the developer, if any, as a result of release of proportionate bank guarantee would first be utilised towards the repayment of the bank dues by the developer, it said. A suitable mechanism will be worked in consultation with Department of Revenue for operationalisation of release of proportionate bank guarantee, it said.

This is expected to enable developers to competitively bid for PPAs in future. Once the developer commissions the specified threshold capacity, proportional mega benefits would facilitate easing out liquidity crunch with the developers/banks and improve the viability of their projects, it said.