India Approves VGF For 1 GW Solar In Northeast

Having secured approval from the President of India, the government is now going ahead using 1 GW subset from the 5 GW VGF gird connected solar power capacity for its north eastern states. Pictured is the Presidential House (in the middle) and the North and South Blocks (on each side) in New Delhi, illuminated to celebrate the country’s 70th Republic Day. (Photo Credit: Press Information Bureau, Govt of India)
India Approves VGF For 1 GW Solar In Northeast
  • Indian President has approved setting up 1 GW grid connected solar PV capacity in north eastern states of the country, including Sikkim
  • This capacity will be a subset of the current 5 GW viability gap funding scheme for grid connected PV projects under JNNSM's Batch-IV of Phase-II
  • SECI will conduct competitive bidding rounds to select developers to set up projects on BOO basis
  • Ceiling tariff will be INR 3.00 ($0.042) per kWh and projects will be eligible for a maximum VGF of INR 10 million ($0.14 million) per MW

The President of India, Ram Nath Kovind, has granted his approval to the Government of India's plans to use viability gap funding (VGF) for 1 GW of grid connected PV power projects in the north eastern states, including Sikkim. This VGF will be a subset of the current 5 GW VGF scheme for grid connected PV projects of Batch-IV of Phase-II, Jawaharlal Nehru National Solar Mission (JNNSM).

As the implementing agency, the Solar Energy Corporation of India (SECI) will be responsible for conducting competitive rounds to set up 1 GW of solar projects on a build-own-operate (BOO) basis by solar power project developers in the north eastern states during financial year 2018-19. Tariffs have been capped at INR 3.00 ($0.042) per kWh with a maximum VGF of INR 10 million ($0.14 million) per MW.

Owing to land constraints in the hilly regions of the north east, minimum size of the project will be 5 MW. Project commissioning timeline is within 21 months from the date of signing power purchase agreements (PPAs).

VGF is a financing mechanism through which the Government of India auctions solar power projects using a competitive bidding process for developers to set up and sell power for a pre-determined tariff. The government offers financial support to the winners in the form of VGF.

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