The Hindu Business Line : Breather likely for solar panel projects close to financial closure

New Delhi, Sept. 14 The Department of Information Technology is likely to grant an additional two-three months for financial closure to applicants that have received in-principle nod for solar photo voltaic projects.

The applications were filed under the Special Incentive Package Scheme (SIPS).

While none of the 12 applicants has achieved full financial closure – the earlier deadline for which was August 31 – some have reported back with partial financial closure or tied up commitment for funds higher than the threshold investment limit stipulated under SIPS.

“About six-eight companies have made substantial progress, and these companies may be given an extension,” Mr R. Chandrasekar, Secretary, Department of Information Technology, told Business Line.

The names of companies that have reported “progress” (and hence eligible for a breather) could not be immediately ascertained. A source said that one-two applicants had crossed the Rs 1,000-crore PV threshold but were yet to achieve financial closure for the full project size. As many as four-five applicants have tied up commitment less than the threshold.

“Such an exercise takes time as there are multiple processes involved – various documents have to be furnished, technical tie-up and commercial arrangements need to be finalised,” the source said.

After the applicants report back with financial commitment from their investors, the proposals would be placed before the Appraisal Committee. The committee will recommend whether the Centre can approve financial support to the project.

The release of the funds under SIPS would take place after the companies have incurred the threshold expenditure on the project.

Earlier this year, the Government accorded in-principle clearance to 12 applicants including Titan Energy Systems, Reliance Industries Ltd, Tata BP Solar Power, and PV Technologies India (a subsidiary of Moser Baer).

The nod implies that prima-facie these proposals have met the basic technical criteria under SIPS. As part of the scheme, the Centre will provide incentive of 20 per cent capital expenditure during the first 10 years for the units in SEZs and 25 per cent of the capital expenditure in non-SEZ units.

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