Bharat Heavy Electricals (BHEL) has invited bids to select partners to set up a gigawatt-scale advanced chemistry cell battery storage facility through a special purpose vehicle (SPV) under the Government of India’s performance-linked incentive (PLI) program.
The last date to submit bids is November 2, 2021.
The Department of Heavy Industry (DHI), Government of India, had issued a notification for the ‘National program on Advanced Chemical Cell (ACC) battery storage’ to implement ACC manufacturing facilities for electric vehicles (EV).
The program’s total five-year incentive payout is ₹181 billion (~$2.47 billion). In November 2020, the central government approved the PLI program in ten critical sectors to enhance India’s manufacturing capabilities and exports under the Atmanirbhar Bharat initiative.
BHEL intends to bid for a minimum 5 GWh capacity. However, the actual manufacturing capacity for bidding will be decided in consultation with selected consortium partners. The proposed SPV company may have a maximum of three parties (including BHEL).
If the consortium wins the bids and is awarded the project, an SPV will be formed under the Indian Companies Act, 2013. The SPV will also enter a tripartite agreement with the central and state governments to avail additional incentives within 60 days of the letter of award.
The proposed SPV company must have the capability to design, engineer, manufacture, test, supply, and provide services after sales of ACC. The terms and conditions of the joint bidding agreement will be mutually discussed and finalized before bidding.
The manufacturing facility and the ACC should meet the requisite national or international quality and testing standards. Cells or battery packs produced by the SPV company must be cost-competitive as per market standards.
SPV’s facility will cater to the Indian or global market in various sectors like e-mobility, grid energy storage, telecom, and consumer electronics. The SPV company will also undertake marketing and business development activities in all the above segments and explore new potential segments.
The interested parties can apply against any or both categories below:
Category I: Technology Partner – companies with technology to design or engineer, manufacture, test, assemble and service ACC.
Category II: Off-take partner- consumer of ACC or batteries, which are EV manufacturers, battery energy storage system (BESS) developers, telecom operators, consumer electronics manufacturers, and power sector companies, among others.
The respondent may be a private entity, public sector undertaking, or a consortium of Category-I and Category-II entities.
Category-I (Technology and investment partner)
BHEL is seeking companies owning technology for research and development (R&D), design or engineer, manufacture, test, disposal of ACC, and willing to invest and form SPV with BHEL to enter into the business of ACC manufacturing under the PLI program.
Prospective partners will have a minimum 25% equity stake in the SPV company. The prospective SPV partner must know how to set up and operate the GWh scale ACC manufacturing facility.
The bidder must ensure committed equity participation and submit documents supporting at least 50% funding either on its own or through a soft commitment from their investor or lender at the time of EoI bid submission.
The prospective partner must have manufactured and supplied a minimum of 1 MWh of ACC as of October 12, 2021, meeting energy density and cycle requirements specified in the PLI program.
Category II (Off-take cum investment partner)
BHEL is seeking responses from companies who are off-takers of ACC or batteries, like EV manufacturers, BESS, battery swapping station aggregators, and developers of battery grid storage projects, among others.
The minimum equity investment required from off-take cum investment partners is 25%. A prospective partner agreeable for higher equity participation in the SPV company will be preferred.
The prospective partner must have a minimum turnover of ₹2 billion or a net worth of ₹2 billion in financial year (FY) 2020-21.
Rahul is a staff reporter at Mercom India. Before entering the world of renewables, Rahul was head of the Gujarat bureau for The Quint. He has also worked for DNA Ahmedabad and Ahmedabad Mirror. Hailing from a banking and finance background, Rahul has also worked for JP Morgan Chase and State Bank of India. More articles from Rahul Nair.