The Ministry of Power and the Ministry of New and Renewable Energy (MNRE) have issued an expression of interest (EoI) from state governments and special purpose vehicles (SPV) in partnership with state governments to set up manufacturing zones for power and renewable energy equipment.

The zones will include manufacturing units to produce power and renewable energy equipment with a total financial outlay of ₹10 billion (~$126.75 million). The project’s duration is five years – FY 2021-22 to FY 2025-26.

The proposed funding of ₹10 billion (~$126.75 million) for the three manufacturing zones has been kept flexible to support a common infrastructure and testing facility with a ceiling of ₹4 billion (~$50.67 million) for one manufacturing zone.

The expression of interest is to invite bidders to set up one brownfield manufacturing zone for power and renewable energy equipment.

The last day to submit the proposals is June 8, 2022.

If the successful bidder is a state government, it must form an SPV within one month after receiving in-principle approval from the project steering committee. Each state can submit only one proposal for setting up a manufacturing zone in their state.

The manufacturing zone will produce solar components like modules, inverters, ingots, backsheets, module mounting structures, and wind components like blades, hubs, shafts, nacelles, etc. The manufacturing zones will also produce components for biomass, small hydro, and green hydrogen projects. The manufacturing zones will also produce components for transmission and distribution infrastructure.

The financial assistance will be released in four installments; 30% of the assistance will be released after the project’s final approval by the steering committee. The next 30% will be released after 60% of the first installment has been used by the bidder, followed by another 30% which will be released after 100% of the first installment and 60% of the second installment have been used by the bidder. The final 10% will be released after submitting the completion certificate.

The SPV must prepare a detailed project report (DPR) covering the technical, financial, institutional, and operational aspects of the common infrastructure and testing facility to be set up in the manufacturing zone within 75 days from the formation of the SPV. After approval of the DPR, the SPV must start execution of works relating to the common infrastructure and testing facility in collaboration with the Central Power Research Institute (CPRI), National Institute of Solar Energy (NISE), and National Institute of Wind Energy (NIWE). Works relating to the common infrastructure facility must be completed within six months and the common testing facility within 48 months from the date of approval of DPR.

The area offered by the bidder for setting up the manufacturing zone must not be less than 150 acres. There has to be a separate area reserved for the common testing facility. The bidder will have to be in full possession of the land free of all encumbrances proposed for establishing the manufacturing zone on the date of submission of the proposal.

The Government of India is focusing on increasing the domestic manufacturing capacity of solar cells and modules to meet the high demand by solar developers and minimize reliance on Chinese modules.

In the recent budget announcement, the finance minister announced an allocation of an additional ₹195 billion (~$2.60 billion) for the production linked incentive (PLI) program, which was previously at ₹45 billion (~$590.65 million) to support vertically integrated gigawatt-scale manufacturing of high-efficiency solar modules.

Previously, the Indian Renewable Energy Development Agency’s bids to set up manufacturing capacities for vertically integrated high-efficiency solar modules under the PLI program received a strong response. The bidders quoted a total capacity of 54.8 GW for polysilicon, ingot-wafer, cell, and module manufacturing. The list of winners under this bid was recently updated with a new addition and an increased approved amount.

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