2 GW solar with VGF support tendered for state-run power generators


The Ministry of New and Renewable Energy (MNRE) had recently notified sanctioning of the viability gap funding (VGF) scheme for state-run power generators to set up 12 GW of grid-connected solar PV power projects using domestically-made equipment. The capacity is to be added in 4 years period from financial year 2019-20 to 2022-23.

As part of this scheme, SECI has invited bids for setting up of 2 GW of grid-connected solar PV projects anywhere in India on ‘build, own, operate’ basis under Phase-II (Tranche-1). Power generated from these projects shall be solely for self-use or use by government entities, either directly or through Discoms on payment of mutually agreed usages charges of not more than Rs 3.50/kWh, which shall be exclusive of any other third-party charges.

The projects may be setup anywhere in India and shall be awarded through e-bidding followed by e-reverse auction.

The maximum permissible limit for VGF is Rs 0.70 crore/MW for projects. The actual VGF to be given to a government producer would be decided through bidding using VGF amount as the bid parameter to select the solar power developer.

Total capacity offered 

Developers can compete for projects anywhere from 10 MW in size, rising in multiples of 10 MW, to whole of the 2 GW capacity.

The developers shall demonstrate the awarded capacity at the delivery point, as defined in the Commissioning procedure.

The successful bidder may, however, set up the cumulative project capacity at a single location, or configure the project as sub-divided into a number of ‘blocks,’ set up at multiple locations, if required. For a single project, such ‘blocks’ shall be located within the same State.

Domestic content requirement

Both the solar cells and modules used in the solar power projects must be made in India as per specifications and testing requirements fixed by MNRE. In case of crystalline silicon technology, all process steps and quality control measures involved in the manufacture of the solar cells and modules starting from wafers till final assembly shall be performed at the works of PV manufacturers in India.


The project capacity must be commissioned within 18 months from the date of issuance of Letter of Award.

In case of commissioning delays up to six months, as part of the penalty the amount of VGF sanctioned to be the project shall be reduced by 0.15%, on per day basis, for the period of such delay, and proportionate to the capacity delayed or not commissioned.

In case commissioning is delayed beyond that, the project capacity under the scheme shall be reduced to the project capacity commissioned, and the balance capacity will stand terminated from the scheme and will remain ineligible for the second tranche of the VGF sanctioned to the solar power developer.