MNRE Grants Conditional Extension for RE Projects due to 2nd Wave of COVID

MNRE has decided that RE projects with SCD on or after April 1, 2021, will be eligible to claim a time extension for completion of work.

The Ministry of New and Renewable Energy (MNRE) has notified that after considering the representations received from project developers and stakeholders, it has been decided that as a measure of relief to renewable energy (RE) projects so that they can deal with difficulties arising out of the restrictions imposed on account of the second COVID-19 surge, it has been decided that RE projects, being implemented through Implementing Agencies designated by the MNRE or under various schemes of the MNRE, having their Scheduled Commissioning Date (SCD) on or after April 1, 2021, will be eligible to claim time-extension for completion of their project activities.

The ministry stated that request for time-extension on account of the resurgence of COVID-19 and subsequent issuance of instructions by States/UTs restricting mobility of people. The ministry further noted that while there are no central government instructions for a countrywide lockdown, since beginning of April 2021 several States/UTs have taken various measures like night curfew, imposition of section 144, weekend lockdown, etc which may have affected RE projects.

As per the ministry directive that “RE projects having their Scheduled Commissioning Date (SCD) on or after April 1, 2021, will be eligible to claim time-extension for completion of their project activities”, it has been clarified that the extension will be granted provided that such time-extensions are not used as a ground for claiming termination of Power Purchase Agreement (PPA) or for claiming any increase in the project cost. 

The actual quantum of time-extension shall be decided in due course depending on the COVID-19 related developments that take place in the coming weeks.

In March, in a partial modification of its initial order from 2020, the MNRE had announced that the time-extension on account of first wave of COVID-19 shall be restricted to 6 months, including the 5 months blanket time-extension already granted by MNRE. The ministry further stated that no further time-extension shall be considered on this account.

In view of the above, 

• RE projects having their SSCD on or after April 1, 2021, after considering the time extension mentioned above on account of the first wave, can apply to the concerned implementing agency for claiming time-extension in project commissioning.
• While applying for such time-extension, RE developers shall undertake that the time extension shall not be used as a ground for claiming termination of Power Purchase Agreement (PPA) or for claiming any increase in the project cost, including Interest During Construction (IDC) or upward revision of tariff.
• If the conditions above are satisfied, then no other supporting documents will be required for granting time-extension.
• On receipt of an application for time-extension, implementing agency shall not initiate any coercive action on the project for recovery of penalty on delayed commissioning, till the time-extension request is decided upon.
• Within the extended time provided for commissioning, intermediate milestones of RE projects, scheduled for completion on or after April 1, 2021, after considering the time extension mentioned above, shall also be commensurately extended.
• Developers shall pass on the benefit of time-extension to other stakeholders down the value chain including EPC contractors, material/ equipment suppliers, OEMs, etc.