MNRE directs the release of PBGs within 45 days after project completion
Real Estate

MNRE directs the release of PBGs within 45 days after project completion

Reportedly, the Ministry of New and Renewable Energy (MNRE) has instructed NTPC and Solar Energy Corporation of India (SECI) to release performance bank guarantees (PBGs) for all the commissioned wind and solar power projects. The PBGs can be released in the span of 45 days from the commercial operation date (COD), on the condition that all required submission of necessary documents is fulfilled.

 

Additionally, MNRE has also stated that under any circumstance developers find delay in the release of the PBGs, they should inform the ministry as well as the managing director of the respective procurer.

 

When wind or solar power developers successfully bid for certain projects, they are issued a letter of intent. Following 30 days from the time of its issuance, they must deposit a PBG, which is an irrevocable unconditional ban guarantee, to the SECI or NTPC.

In most situations, the PBG is released as soon as a renewable energy project is successfully commissioned, after considering issued related to liquidated damages or penalties arising from delay in commissioning in accordance to the provisions mentioned in a power purchase agreement.

As reported, however, most developers are troubled with issues relating to the timely release of bank guarantees. This is a worrying factor since any delay in the release of PBGs can lead to financial losses for these developers due to blockage of funds.

In one such case, the Central Electricity Regulatory Commission (CERC) ruled in the favor of three separate power producers against NTPC and declared that the retention of PBGs by the power corporation was illegal and arbitrary. 

Reportedly, the Ministry of New and Renewable Energy (MNRE) has instructed NTPC and Solar Energy Corporation of India (SECI) to release performance bank guarantees (PBGs) for all the commissioned wind and solar power projects. The PBGs can be released in the span of 45 days from the commercial operation date (COD), on the condition that all required submission of necessary documents is fulfilled.   Additionally, MNRE has also stated that under any circumstance developers find delay in the release of the PBGs, they should inform the ministry as well as the managing director of the respective procurer.   When wind or solar power developers successfully bid for certain projects, they are issued a letter of intent. Following 30 days from the time of its issuance, they must deposit a PBG, which is an irrevocable unconditional ban guarantee, to the SECI or NTPC. In most situations, the PBG is released as soon as a renewable energy project is successfully commissioned, after considering issued related to liquidated damages or penalties arising from delay in commissioning in accordance to the provisions mentioned in a power purchase agreement. As reported, however, most developers are troubled with issues relating to the timely release of bank guarantees. This is a worrying factor since any delay in the release of PBGs can lead to financial losses for these developers due to blockage of funds. In one such case, the Central Electricity Regulatory Commission (CERC) ruled in the favor of three separate power producers against NTPC and declared that the retention of PBGs by the power corporation was illegal and arbitrary. 

Next Story
Infrastructure Transport

Mumbai-Ahmedabad Bullet Train Set to Launch by 2028

India’s first bullet train is set to revolutionize high-speed travel along the western corridor, with the Mumbai-Ahmedabad high-speed rail project aiming for a 2028 launch. This announcement marks a major milestone in India’s infrastructure goals, as it promises to reduce travel time between the two economic hubs from eight hours to just three.Spanning a planned 508-kilometre stretch, the corridor stands as a flagship example of Indo-Japanese collaboration in technology and engineering. Once operational, the train is expected to transform intercity mobility and place India among the select..

Next Story
Infrastructure Transport

Mumbai-Gandhinagar Train Service Enhances Passenger Capacity

The Mumbai Central–Gandhinagar Capital Vande Bharat Express has increased its passenger capacity by adding four additional AC chair car coaches to meet the growing commuter demand on one of India’s busiest business corridors. This upgrade, effective from 11 May, raised the train’s seating capacity from 1,128 to 1,440 passengers, allowing it to serve 936 more passengers daily in both directions. The increase was described as a practical measure to accommodate the surging demand on the busy Mumbai–Ahmedabad–Gandhinagar route, which regularly operates at over 150 percent seat occupancy...

Next Story
Infrastructure Urban

Delhi Plans 12 Sewage Plants to Clean Najafgarh Drain Efficiently

Delhi’s ambitious plan to improve the water quality of the Yamuna River has gained significant momentum as the Delhi Jal Board (DJB) has begun work on 12 new sewage treatment plants (STPs) aimed at reducing the volume of untreated sewage being discharged from the Najafgarh Drain.This initiative forms part of the ongoing efforts to clean the Yamuna and restore the river’s health, which has long been a critical environmental issue for the national capital. Given the alarming pollution levels in the Yamuna, experts and officials consider this project a vital step toward addressing the persist..

Advertisement

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Advertisement

Talk to us?