India To Re-Issue 5 GW Manufacturing Linked Tender

• Indian government has rejected the only bid it received for its 5 GW manufacturing linked 10 GW solar project tender whose capacity was later reduced to 3 GW of manufacturing
• MNRE boss RK Singh said Azure Power's initial bid was unreasonable after evaluation as per the prevalent circumstances
• Government plans to re-launch the 5 GW of manufacturing-linked solar tender out of the initial 10 GW that received the single bid from Azure, according to The Economic Times

The Government of India has rejected the sole bid it received for its 5 GW manufacturing linked 10 GW solar project tender. Azure Power's bid was found to be 'unreasonable', according to RK Singh, heading the Ministry of New and Renewable Energy (MNRE).

"We found that the rate which was initially quoted was unreasonable. We evaluated the bid when it was received as per the prevailing circumstances," Indian business newspaper The Economic Times (ET) quoted Singh, when explaining the reason behind the government's decision to re-tender the capacity which had no real competition.

India's government now plans to re-launch the 5 GW of manufacturing-linked solar tender out of the initial 10 GW that received the single bid, said ET. The timeline of the re-launch is not known as yet.

The Solar Energy Corporation of India (SECI) had launched a 5 GW solar manufacturing tender linked with interstate transmission system (ISTS) PV projects of 10 GW capacity in May 2018 (see SECI Issues 5 GW PV Manufacturing Plant Tender). With no enthusiastic response coming in, in September 2018 it introduced several amendments to the tender with the most prominent being the reduction in the capacity offered to 3 GW of manufacturing linked with 10 GW solar project capacity (see SECI Lowers Manufacturing Share In 5 GW Tender). At least 6 times, this tender was postponed.

Yet, except for Azure Power there was no other interested company. The Indian developer had reportedly bid for 2 GW of projects with 600 MW of solar equipment manufacturing capacity. It qualified for the technical round, and entered into negotiations with the government regarding the tariff it quoted in this round. Finally, the bid has been rejected.

Another local daily Business Standard said MNRE wanted to offer up to 25% capital subsidy to solar panel makers, but the proposal was not accepted by the Ministry of Finance. The lack of this funding push and the developers resisting attempts from the government to push them into a non-core area of manufacturing are some of the reasons for the tender not being successful so far.