Lok Sabha Question No. 3760 (UNSTARRED), answered on 2023-03-23
Subject: Investment into Renewable Energy Sector
Ministry: NEW AND RENEWABLE ENERGY
Asked by: Anto  Antony, Balubhau (Alias Suresh Narayan) Dhanorkar

## GOVERNMENT OF INDIA MINISTRY OF NEW AND RENEWABLE ENERGY

## LOK SABHA

## UNSTARRED QUESTION NO. 3760

ANSWERED ON 23.03.2023

## INVESTMENT INTO RENEWABLE ENERGY SECTOR

## 3760. SHRI ANTO ANTONY SHRI BALUBHAU ALIAS SURESH NARAYAN DHANORKAR

Will the Minister of NEW AND RENEWABLE ENERGY be pleased to state:

- (a) whether there are payment security mechanisms to de-risk investment into renewable energy sector and if so, the details thereof;
- (b) whether it is a fact that new and renewable energy tenders have been under-subscribed due to rigid Government policies;
- (c) if so, the details of the measures taken/proposed to be taken by the Government to solve the said issue;
- (d)  the  measures  taken  to  avoid  delay  in  power  purchase  agreements  and  payment  on commissioned plants; and
- (e)  the  measures  being  taken  to  assure  the  financial  health  of  distribution  companies (DISCOMs)?

## ANSWER

## THE MINISTER OF NEW & RENEWABLE ENERGY AND POWER

## (SHRI R.K. SINGH)

- (a) Major payment security mechanisms to de-risk investment in renewable energy interalia include:
- i) Letter of Credit (LC)
- ii) Payment Security Funds
- iii) Tri Partite Agreement (TPA) between Ministry of Power, RBI and State Government (if applicable)

These instruments are invoked in case of delays/default in payment to Renewable Energy Generating Companies and have been further strengthened by the notification of the Late Payment Surcharge  Rules, 2022.

- (b)  to  (c)    Solar  Energy  Corporation  of  India  Ltd.  a  PSU  under  MNRE  has  conducted multiple bids  under various tranches under Solar, Wind, hybrid and special configuration bids for RE projects and the tenders have largely been well subscribed.

(d) The Solar Energy Corporation pursues with the States for signing of power purchase agreements.  Similarly,  measures  have  been  undertaken  to  ensure  timely  payment  to commissioned plants, including notification of the Late Payment Surcharge Rules, 2022, clauses  for  letter  of  credit  and  provisioning  of  payment  security  funds  under  standard bidding  guidelines,  and  invocation  of  tripartite  agreement  (TPA)  between  Ministry  of Power, RBI and State Governments.

(e) Government of India have been implementing various performance linked and result oriented schemes, with the objective to have a financially secure, viable and sustainable power  sector  (distribution  segment  in  particular).  Various  initiatives  undertaken  by Ministry  of  Power  (MoP)  includes  Revamped  Distribution  Sector  Scheme  (RDSS), Electricity  (Late  Payment  Surcharge  and  Related  Matters)  Rules  2022,  Additional Borrowing space of 0.5% of GSDP to the States linked to power sector reforms, Corporate Governance  Guidelines,  Additional  Prudential  Norms  for  lending  by  Power  Finance Corporation (PFC) Limited and Rural Electrification Corporation (REC) Limited, based on the performance of the utilities, Liquidity Infusion Scheme (LIS) and PM KUSUM Scheme. These initiatives have been designed to tackle financial and operational issues to bring in the desired financial discipline in Discoms and State Governments.

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