The North Eastern Electric Power Corporation Limited  (NEEPCO), a government enterprise, has issued a tender for undertaking an industrial all risk (IAR) insurance policy for 5 MW of solar photovoltaic (PV) power project at Monarchak in the state of Tripura.

The IAR insurance policy will be for a year and will come into effect from June 26, 2020. The deadline for receiving the bids is June 3, 2020, while the opening date for techno-commercial bids has been scheduled for June 4, 2020.

The list of assets of the 5 MW solar project includes the solar project building, including an inverter room and the main control room, PV modules including mounting structure, inverters including battery bank, 33 kV switchboard, and transformer with a rating of at least 100 kVA.

According to the tender document, an interested bidder should have a license from the Insurance Regulatory and Development Authority (IRDAI) for undertaking the general insurance business. Also, the bidder should be in the business for at least three financial years.

Further, the insurance policy will cover risks under the Industrial All Risk (IAR) Insurance Policy. Some of them include lightning, fire, earthquake, machinery, riots, burglary, impact damage, and missile testing operations. The scope of the IAR policy will include all projects, equipment, buildings, township, roads, and other civil and electrical works, including transmission lines.

The sum insured for the IAR Insurance Policy is ₹420.5 million (~$5.60 million), and the sum insured for the machinery breakdown is ₹396.5 million (~$5.28 million).

As per the tender document, for the IAR cover, the deductible amount for burglary, inland transit, or riots is 5% of the claimed amount, which is subject to a minimum of ₹100,000 (~$1,330).

In an insurance policy, the deductible is the amount paid out of pocket by the policyholder before an insurance provider pays the expenses.

Under the terrorism cover, an amount of up to ₹5 million (~$66,502.1) can be claimed for material damage and business interruption. The terrorism cover would provide safeguard against loss resulting from interruption of business by an act of terrorism.

In January 2020, Mercom reported that the Ministry of New and Renewable Energy (MNRE) issued a circular which stated that it held talks with the Department of Financial Services, Ministry of Finance, and the Insurance Regulatory and Development Authority of India, regarding the availability of insurance products for domestic solar modules. The insurance of solar products is a crucial component for developers in the solar ecosystem, and currently, there are not many players in this business.

Previously, it was reported that the lack of insurance products for solar PV modules in the country is a problem. In India, though project insurance is available, module insurance is not.

 

Image credit: Σ64 / CC BY