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Finance | February 2013

Funds crunch may delay national solar's second phase

As the government may not provide finance for the upcoming renewable energy projects, the second phase of the national solar mission could be delayed, a top official at the Union Ministry of New and Renewable Energy said. 

Government investment is not flowing in, so execution of the next phase will get delayed, said the official. For the second phase of the solar mission, the Ministry has decided to go for 'viability gap funding (VGF)' model for the solar power projects. Out of 3,000 MW, for which the reverse bidding will happen in June this year, 2,500 MW will be funded via VGF.
Under this option, bidders would bid for VGF requirement in Rs/MW and the bidder with minimum VGF requirement will be selected. Balance 500 MW will be bundled with conventional power like the first phase.

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