The Indian Ministry of Power has issued new »Guidelines for Tariff Based Competitive Bidding Process for Procurement of Power from Grid Connected Solar PV Power Projects«. The guidelines shall be applicable to all projects equal to or greater than 5 MW for supplying power to distribution companies (DISCOM) subject to approval from the respective central or state regulator. The government also proposes to issue standard bid documents including request for selection, PPA and other ancillary documents. »The proposed changes are a major improvement on the current framework,« comments consultancy Bridge to India, but they are »still not going far enough.« Introduction of standard documentation, in particular, will be of major help to developers and investors. The changes »have come after extensive consultations and aim to protect developer and investor-lender interests,« says the consultancy.

Amongst others, the guidelines specify strict timelines for completion of land acquisition, transmission connectivity and other approvals in a time-bound manner to avoid project delays. All statutory clearances and transmission connectivity feasibility should be available prior to PPA signing. Furthermore, the guidelines specify that the developer can terminate the PPA in case of a power purchaser default and seek compensation equivalent to total debt outstanding plus 150 percent of adjusted equity, or six months billing amount, whichever is lesser.