Project Developers Seek Power Minister’s Help to Save Solar Assets in Karnataka

The National Solar Energy Federation of India (NSEFI) has requested the Minister of Power, R. K. Singh to intervene and save the commissioned solar photovoltaic (PV) assets in the state of Karnataka.

These solar PV projects were developed under National Solar Mission Phase-II Batch-III Tranche-V.  The solar project developers have entered power purchase agreements (PPAs) for these projects with Solar Energy Corporation of India (SECI).

NSEFI is a non-profit umbrella organization representing solar energy companies active along the whole PV value chain. These include project developers, manufacturers, engineering companies, financial institutions and other stakeholders.

Why approach the Minister for Power?

According to the letter written by NSEFI to Mr. Singh, the scheduled commissioning date of these projects was September 2017, but there was a delay in the grant of connectivity by Karnataka Power Transmission Corporation Limited (KPTCL) and approval under Section 109 Karnataka Land Reforms Rules and Act.

In face of the delay, the developers approached SECI seeking extension of financial closure timeline and project commissioning timeframe. After that, a meeting was chaired on September 18, 2017, which devised a methodology to calculate the liquidated damages (LD), and time extension for the financial closure and project commissioning.

Even after being invited to the project sites for inspection and signing the Minutes of Meeting (MoM), SECI has been unable to provide the developers with a commissioning date. The projects have been commissioned and are feeding power to the grid.

But the developers cannot receive any payment against the supply of power from these projects due to the delay in assigning scheduled commissioning date for these projects.

Possible Loan Defaults?

If the solar project developers do not receive the due payments, they will be unable to service their debt obligations leading to default of loan agreement with the lenders. If clarity on extension of scheduled commissioning dates is not provided, then under the regulations of the latest Reserve Bank of India (RBI), these assets will be termed as non-performing assets (NPAs).

NSEFI has asked the Minister of Power to meet with the affected solar project developers and help deflate the situation by resolving the issue.

Lately, various clusters of solar energy companies have been approaching the government for resolution of a plethora of issues faced by them.

Recently, the Solar Power Developers Association (SPDA) wrote to the Ministry of New and Renewable Energy (MNRE), seeking postponement of scheduled auctions for projects, considering the ongoing transmission issues.

Soon after, the Distributed Solar Power Association (DiSPA) wrote to R. K. Singh to extend the project completion timelines for rooftop solar projects by six months. These projects were awarded by the Solar Energy Corporation of India (SECI).

Mercom’s source at NSEFI commented on the development saying, “A total of 970 MW of commissioned solar projects are being affected due to delay in arriving at a scheduled commissioning timeframe”.

“These projects include both open category and DCR projects,” the source added.