NTPC Secures Highest VGF Support For CPSU Scheme

NTPC has emerged as the largest beneficiary of the central government grant under the Central Public Sector Undertaking (CPSU) Scheme  Phase-II (Government Producer Scheme). Latest data shared by the government before the Rajya Sabha revealed the levels of allocations given to different CPSUs. 

The government aids these CPSUs for setting up grid-connected Solar Photovoltaic (PV) Power Projects by the Government Producers with Viability Gap Funding (VGF) support for self-use or use by Government/ Government entities, either directly or through Distribution Companies (DISCOMS). 

Under the first tranche, NTPC received ₹538.30 crore in support for 769 MW of capacity added. In the second tranche, it secured ₹541.10 crore for 923 MW, while under the third tranche, it received ₹447.25 crore for 1,990 MW.

In a written response to the Rajya Sabha, Minister of State for New and Renewable Energy Shripad Yesso Naik shared that while navratna PSUs such as SJVN and SECI also took significant shares, NTPC was awarded the maximum capacity across all three tranches.

Other key beneficiaries of the VGF scheme included Singareni Collieries Company Limited, which received ₹54 crore for a 90 MW project under Tranche I. SJVN Green Energy Limited, which received ₹223.60 crore for a 1,000 MW project under Tranche III, other beneficiaries under this trache were NLC India Limited, which received ₹510 crore for 114.11 MW; and NHPC, which secured ₹224.50 crore in VGF support for a 1,000 MW project.

VGF Within Tenders

Recent tenders have increasingly been adding Viability gap funding. Mostly they are found within the battery energy storage tender. As per the Ministry of Power (MoP) guidelines, in case of battery energy storage systems (BESS) project, the government granted VGF of Rs 94 billion. This funding was expected to cover up to 40% to develop 4,000 Mh of battery energy storage systems (BESS) capacity across the country. For solar projects, the government allocated Viability Gap Funding (VGF) support up to Rs 55 lakhs per MW to the CPSUs/Govt. Organizations entities selected through a competitive bidding process.