Maharashtra State Electricity Distribution Company Limited (MSEDCL) has invited bids to procure 431 MW of solar power from decentralized solar projects of 500 kW to 2 MW capacity under Component-A of the Pradhan Mantri Kisan Urja Suraksha evam Utthan Mahabhiyan (PM KUSUM) program.

The last date to submit the bids is June 3, 2022.

MSEDCL has set a ceiling tariff of ₹3.10 (~$0.041)/kWh for the tender.

Under Component A of the PM-KUSUM program, the government aims to set up 10,000 MW of grid-connected solar power projects of individual project size of up to 2 MW.

Bidders will have to submit ₹100,000 (~$1,299)/MW as an earnest money deposit.

The successful bidder will have to furnish an amount equivalent to ₹500,000 (~$6,495)/MW as a performance bank guarantee within 30 days from the letter of award.

MSEDCL will enter into power purchase agreements (PPAs) with the successful bidders for 25 years from the commercial operation date.

The solar power projects will preferably be installed within a five km radius of the substations to avoid the high cost of sub-transmission lines and reduce transmission losses.

Only commercially established and operational technologies can be used to minimize the technology risk and achieve the timely commissioning of the projects.

The projects under construction, projects which are not yet commissioned, and projects already commissioned but do not have any long-term PPA with any agency and selling power on a short-term or merchant plant basis will be eligible.

Bidders can participate as an individual or group of farmers, cooperatives, panchayats, farmer producer organizations, or water user organizations setting up the project on their lands. If bidders cannot arrange the capital, they may set up the projects through a developer signing a land lease agreement.

The lease rent to be paid to the landowner will be ₹30,000 (`$390) per acre per year with a yearly increment of 3%. The tenure for the lease agreement will be between 26 and 30 years, as agreed by both parties.

Individual farmers, farmer groups, cooperatives, panchayats, farmer producer organizations, water user associations, and farmers setting up the project on their lands are not required to meet the financial eligibility requirement.

If a developer sets up the project on leased land, the net worth of the bidder should not be less than ₹10 million (~$129,900)/MW of the quoted capacity.

The bidder’s minimum annual turnover should be ₹2.5 million (~$32,475)/MW of the quoted capacity during the last financial year.

The developer should have an internal resource generation capability in the form of profit before depreciation, interest, and taxes for a minimum of ₹1 million (~$12,990)/MW of the quoted capacity as of the last date of the previous financial year.

The developer should have an in-principle sanction from a lending institution committing a Line of Credit for a minimum of ₹1.25 million (~$16,237)/MW of the quoted capacity to meet the working capital requirement.

The project should be designed to deliver energy at the 11/22 kV level of the substation of MSEDCL. The responsibility of getting the grid connectivity with MSEDCL will be of the successful bidder.

MSEDCL has stated that the declared capacity utilization factor should not be less than 15% over a year.

In February this year, MSEDCL invited bids to procure 445 MW (AC) of power from decentralized solar projects of 500 kW to 2 MW capacity under Component A of the KUSUM program.

Earlier, MSEDCL invited bids for 444 MW of decentralized solar projects of 500 kW to 2 MW capacity under component A of the KUSUM program in Maharashtra.

According to Mercom’s India Solar Tender Tracker, MSEDCL has so far floated tenders for 15 GW of solar projects.