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Govt amends VGF norms for grid-connected solar projects

28 Oct 2015 Evaluate

Under a scheme to set up 1,000-MW grid-connected solar projects by central public sector undertakings (CPSUs) and other government organizations, the government has decided to ease norms for releasing viability gap funding (VGF). Considering the request from the various CPSUs and other government organization like NTPC, railways etc for advance release of VGF amount, Ministry of New and Renewable Energy has amended the existing provision in the aforesaid scheme.

As per the amended provisions, 50 percent of the viability gap funding will be released on letter of Intent (LOI) and start of the installation of the work at plant. However, the balance 50 percent will be released on successful completion of the full capacity of the project. Changes will come into force with immediate effect.

According to the earlier norms, VGF was released in two tranches, 50 percent of the VGF was released on successful completion of the full capacity of the project, while the remaining 50 percent was released after one year of successful operation of the project. Under the National Solar Mission, government aims to achieve about 100 GW of solar power generation capacity by 2022.

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