MNRE Grants Blanket 5-Month Extension for RE Projects due to COVID-19

MNRE has granted a 5-month time extension from March 25, 2020, to August 24, 2020, to all RE projects under implementation due to COVID-19

The Ministry of New and Renewable Energy (MNRE) has informed that in supersession to its previous orders, it has been decided that all renewable energy (RE) projects under implementation as on the date of lockdown, i.e. March 25, 2020, through RE Implementing Agencies designated by the MNRE or under various schemes of the MNRE, shall be given a 5-month time extension from March 25, 2020, to August 24, 2020.

The ministry in April had issued an order to all its implementing agencies to treat delay on account of disruption of the supply chains due to spread of Coronavirus in China or any other country, as Force Majeure and that they may grant a suitable extension of time for projects, based on evidence /documents produced by developers in support of their respective claims of such disruption of the supply chains due to spread of the virus.

Subsequently, RE developers had made a case with the Ministry that they may be granted a general time extension on account of lockdown (due to COVID-19) and then be granted additional time which will be required for normalisation after such lockdown.

Pursuant to which, on June 30th, the MNRE had issued a new order clarifying that the lockdown period for a time extension for renewable energy projects as per its previous order will be considered from March 25, 2020, when the lockdown was first started to May 31, 2020.

And now, after further examining of the situation and further requests made by industry bodies like NSEFI and project developers, the ministry has issued a new order granting the 5-month extension.

Commenting on the new extension, Pinaki Bhattacharyya, Co-Founder and CEO at Amp Energy India said “this is a positive move by MNRE and showcases their intent of helping the sector tide over these tough times by providing the developers sufficient extension timelines. Having said that, the government should not impose more trade barriers after extending SGD such as Basic Customs Duty. The power costs have already gone up, any additional duty will further increase the cost of power for consumers and this would not a great move given the current situation“

In its order, the ministry stated, “All RE projects under implementation as on the date of lockdown, i.e. 25th March 2020, through RE Implementing Agencies designated by the MNRE or under various schemes of the MNRE, shall be given a time extension of 5 (five) months from 25th March 2020 to 24th August 2020. This blanket extension, if invoked by the RE developers, will be given without case to case examination and no documents/evidence will be asked for such extension.”

It also added that the timelines for intermediate milestones of a project may also be extended within the extended time provided for commissioning.

“Developers had been making several representations to the MNRE on the matter for the last few months. We thank the Ministry for taking note of our concerns on this issue and allowing us this much-required extension,” said Ritu Lal, heading Institutional relations at Amplus Solar.

The project developers have also been cleared to pass on the benefit of such time-extension, by way of granting similar time-extensions, to other stakeholders down the value chain like Engineering Procurement Construction (EPC) contractors, material, equipment suppliers, Original Equipment Manufacturers (OEMs), etc.