The government’s recent notification of bidding guidelines for the award of solar power projects comes as a positive development for the sector, credit ratings agency ICRA has said.
The guidelines address some of the key concerns pertaining to off-taker credit profile, grid curtailment and termination payments, the agency said in a note.
“Barring the Rewa Solar Park bid, where there is a guarantee by the Madhya Pradesh State Government to cover for payment delays, the payment security approved in the bidding guidelines has not been seen in power purchase agreements (PPAs) signed directly by the state distribution utilities (discoms) under state policy framework,” Sabyasachi Majumdar, Senior Vice President & Group Head, ICRA Ratings said in the statement.
This measure, if implemented in PPAs signed directly by state discoms, is favourable for the solar power developers and improves the bankability of the PPA document, he added.
As per the new norms, the minimum power purchase agreement tenure (PPA) will be 25 years that will help ensure lower tariffs. Besides, unilateral termination or amendment of PPA is not allowed. Read More…
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