Due to the Covid-19 2nd wave, solar developers have got an extension on their renewable energy project, which is a good thing for the Indian renewable sector.
Covid-19 2nd wave is very dangerous but not for the solar developers. GOI has extended the deadline to complete the in-progress projects because of the Covid-19 2nd wave. This came as a relief in a time when solar developers are struggling to complete the projects.
In the PPA signed by the solar developers, it was mentioned that if they fail to meet the deadline of completing the project, they can face some serious fines which can further create issues with their bank.
This extension of the project completion date is given by the MNRE to the projects whose deadline was 1st April 2021 or after it. MNRE gave this extension because a large part of India was and still is under lockdown and because of that, it was very tough for the solar developers to move forward with the project.
The lockdown in the country stopped the movement of labor, the raw material which delayed the project.
This is not the first extension that MNRE has given to the solar developers, the first extension was given last year during the COVID19 first wave. But this time MNRE has made sure that developers cannot use the excuse of COVID19 to exit the project. In a discussion, MNRE confirmed that “While applying for such time-extension, RE (renewable energy) developers shall undertake that the time-extension shall not be used as grounds for claiming termination of the power purchase agreement (PPA) or for claiming any increase in project cost, including Interest During Construction (IDC) or upward revision of the tariff.”
They further added that “Requests for time-extension on account of the resurgence of covid-19 and subsequent issuance of instructions by States/UTs restricting the mobility of people have been carefully examined in the ministry. It is noted that while there are no central government instructions for a countrywide lockdown, since the beginning of April 2021 several States/UTs have taken various measures such as night curfew, imposition of section 144, and weekend lockdown, which may have affected RE projects.”
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