Govt May Extend Deadline for Mega Power Projects to Sign PPAs

21 May 2025 CW Team

The Indian government is considering extending the timeline for power projects under the Mega Power Policy by two to three years to allow additional time for signing power purchase agreements (PPAs). The proposed extension aims to assist projects that have not yet secured or only partially secured long-term agreements with distribution companies.

At least six projects with a combined capacity of eight gigawatts could benefit. Of this, nearly four gigawatts remain untied, placing Rs 40 billion worth of bank guarantees at risk. Granting more time would allow developers to finalise PPAs and recover these guarantees.

The Mega Power Policy, introduced in 2009, offers benefits such as customs and excise duty exemptions. To qualify, developers must sign long-term PPAs — a requirement made difficult by limited procurement tenders from states.

A similar extension was granted in 2022, increasing the certification deadline from ten to thirteen years for ten provisional projects. The new proposal follows this precedent, aiming to support project viability amid changing market conditions.

By easing financial pressure, the extension could improve developer confidence and help advance India’s energy goals through timely project execution.

Source:EQ Magazine

Infrastructure Urban

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