The Gujarat Urja Vikas Nigam (GUVNL) has amended its Phase IV Standalone Battery Energy Storage Systems (BESS) tender by providing Viability Gap Funding (VGF) support and augmenting the capacity to 500 MW/1000 MWh.

The initial tender was issued for 400 MW/800 MWh with a greenshoe option of 400 MW/800 MWh.

In the updated tender, the VGF for each developer is capped at ₹2.7 million (~$32,114 )/MWh or 30% of the project’s capital cost, whichever is lower. Developers must submit a certificate verifying the capital cost for the awarded project capacity, certified by statutory auditors, within six months of the Commercial Operation Date (COD).

The project will receive the VGF under the state component.

VGF will be provided separately for each project based on the capacity defined in the Battery Energy Storage Project Agreement (BESPA).

The VGF disbursement of VGF will occur in five tranches, tied to milestones:

• 10% at financial closure (subject to submission of a bank guarantee)
• 45% upon achieving COD
• 15% after the first year post-COD
• 15% after the second year
• 15% after the third year

The Central Electricity Authority must certify that the project has met each milestone before the VGF disbursement. GUVNL will only release funds after receiving them from the Government of India and after the developer submits the bank guarantee of ₹1.25 million (~$14,867)/MW/project.

If the developer fails to commission the project within the timeline specified in the BESPA, GUVNL can recover the VGF disbursed, plus interest at SBI-MCLR (1 Year) plus 5%, from the disbursement date. If the capacity is reduced, the VGF recovery will be pro-rata.

If the BESPA is terminated within the first three years after COD due to reasons attributable to the developer, GUVNL can recover the VGF disbursed before COD, plus interest. In case of project transfer or sale, the new entity must reissue the bank guarantee, subject to prior approval under Grants-in-Aid Rule 230(9).

In March, the Ministry of Power issued the operational guidelines for the ₹94 billion (~$1.1 billion) program to provide up to 40% VGF to develop 4,000 MWh of BESS capacity across the country.