India Allows Force Majeure For COVID-19 Delaying RE Projects

Renewable Energy Project Commissioning Delay In India Due To Coronavirus Impacting Supply Chain Eligible To Invoke Force Majeure Clause, Says MNRE
08:28 AM (Beijing Time) - 25. March 2020
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India's MNRE has decided to treat delay in project commissioning for renewable energy projects due to coronavirus causing disruption in the supply chain from China or any other country as a force majeure event. (Photo Credit: TaiyangNews)

Key Takeaways

  • MNRE has allowed project commissioning delay due to COVID-19 in India to be eligible to treat it like a FMC
  • Aggrieved developers need to submit documentary evidence to stake claim to the extension of time
  • Implementing agencies to ensure impacted parties do not get double relief due to overlapping periods of time extension granted for relief under this

Renewable energy projects in India getting delayed due to disruption in the supply chain owing to the spread of coronavirus in China or any other country will be treated as a force majeure event, the Ministry of New and Renewable Energy (MNRE) in India has ascertained officially.

In an office memorandum to the Solar Energy Corporation of India (SECI), the National Thermal Power Corporation (NTPC) and other state governments and union territories (UT), the ministry said the force majeure clause (FMC) ‘should be considered as a case of natural calamity and FMC may be invoked, wherever considered appropriate, following the due procedure’.

The ministry order directs renewable energy implementing agencies to grant suitable extensions for projects impacted by the virus. In order to get this extension granted developers need to submit evidence/documents that support their respective claims. SECI/NTPC and other implementing agencies will check the requests and grant extensions of time (EoT). They would also ensure the aggrieved parties don’t get double relief due to overlapping periods of time extension granted for the same reason.

In February 2020 commentary of CRISIL on the impact of COVID-19 on Indian solar power projects estimated 3 GW capacity to face completion delay as the virus would impact delivery schedules. It said back then that companies may invoke force majeure clause in their contracts to get away with paying penalties, but CRISIL warned the clause may or may not work due to legal and regulatory hurdles (see Coronavirus Could Derail 3 GW Solar PV Capacity In India).

Anu Bhambhani

Anu Bhambhani is the Senior News Editor of TaiyangNews

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Anu Bhambhani