SECI Releases ₹520 Crores To developers in July

At a time when the stress due to overdues from discoms, besides multiple other factors has got the industry on edge, SECI (Solar Energy Corporation Of India) has released a statement that claims ₹520 crores have been released to developers for payments against wind and solar energy generation. This represents about 75 percent of the total payments made to developers in the month by SECI. The other payments comprise of subsidy and VGF linked funding.

Readers might be aware that SECI, which typically signs the PPA with developers, along with back to back PSA with the buying discom in most cases, is obliged to pay up, even if it doesn’t receive its own payments fro the discoms. This is an issue that has been laid down by regulators like APTEL, though with some leeway of course. SECI typically earns 7 paise per unit on all deals.

On the subsidy front, SECI says it has released about ₹57 crores. It paid ₹1.05 crores towards subsidies under the Central Public Sector Undertaking (CPSU) Program, ₹5. 46 crores under the Rooftop Program, and ₹50. 5 crores in subsidies under the Viability Gap Funding (VGF) program.

Developers led by Wardha Solar (Maharashtra), Azure Power India, Clean Sustainable Energy Private Limited, Parampujya Solar Energy led the group of firms receiving  the highest amounts in refund towards GST and safeguard duty claims.

Considering reports of the delays piling up at discoms again, it remains to be seen how long SECI can sustain these payments on its own account, assuming that it is also facing delays from the discoms.

Industry observers have estimated that total dues past 60 days are well over ₹140,000 crores now, with over ₹8,000 crores owed to renewable energy producers.

In 2020, the MNRE has made a huge effort to tackle the payments issue, with the original ₹90,000 crore stimulus loan package to support repayments already being considered for expansion to ₹120,000 crores.

But the really big solution remains passage of the Electricity (Amendment) Act 2020, whose fate remains uncertain due to mounting political opposition, blamed on the COVID pandemic.