MNRE directs the release of PBGs within 45 days after project completion
Real Estate

MNRE directs the release of PBGs within 45 days after project completion

Reportedly, the Ministry of New and Renewable Energy (MNRE) has instructed NTPC and Solar Energy Corporation of India (SECI) to release performance bank guarantees (PBGs) for all the commissioned wind and solar power projects. The PBGs can be released in the span of 45 days from the commercial operation date (COD), on the condition that all required submission of necessary documents is fulfilled.

 

Additionally, MNRE has also stated that under any circumstance developers find delay in the release of the PBGs, they should inform the ministry as well as the managing director of the respective procurer.

 

When wind or solar power developers successfully bid for certain projects, they are issued a letter of intent. Following 30 days from the time of its issuance, they must deposit a PBG, which is an irrevocable unconditional ban guarantee, to the SECI or NTPC.

In most situations, the PBG is released as soon as a renewable energy project is successfully commissioned, after considering issued related to liquidated damages or penalties arising from delay in commissioning in accordance to the provisions mentioned in a power purchase agreement.

As reported, however, most developers are troubled with issues relating to the timely release of bank guarantees. This is a worrying factor since any delay in the release of PBGs can lead to financial losses for these developers due to blockage of funds.

In one such case, the Central Electricity Regulatory Commission (CERC) ruled in the favor of three separate power producers against NTPC and declared that the retention of PBGs by the power corporation was illegal and arbitrary. 

Reportedly, the Ministry of New and Renewable Energy (MNRE) has instructed NTPC and Solar Energy Corporation of India (SECI) to release performance bank guarantees (PBGs) for all the commissioned wind and solar power projects. The PBGs can be released in the span of 45 days from the commercial operation date (COD), on the condition that all required submission of necessary documents is fulfilled.   Additionally, MNRE has also stated that under any circumstance developers find delay in the release of the PBGs, they should inform the ministry as well as the managing director of the respective procurer.   When wind or solar power developers successfully bid for certain projects, they are issued a letter of intent. Following 30 days from the time of its issuance, they must deposit a PBG, which is an irrevocable unconditional ban guarantee, to the SECI or NTPC. In most situations, the PBG is released as soon as a renewable energy project is successfully commissioned, after considering issued related to liquidated damages or penalties arising from delay in commissioning in accordance to the provisions mentioned in a power purchase agreement. As reported, however, most developers are troubled with issues relating to the timely release of bank guarantees. This is a worrying factor since any delay in the release of PBGs can lead to financial losses for these developers due to blockage of funds. In one such case, the Central Electricity Regulatory Commission (CERC) ruled in the favor of three separate power producers against NTPC and declared that the retention of PBGs by the power corporation was illegal and arbitrary. 

Next Story
Infrastructure Urban

CASE India Launches Project Milaap for Devotee Safety at Kumbh Mela

CASE Construction Equipment, a brand of CNH, launches Project Milaap, a groundbreaking Corporate Social Responsibility (CSR) initiative aimed at ensuring the safety of millions of devotees attending the Kumbh Mela 2025 in Prayagraj. The initiative was officially flagged off in the presence of CSR committee Emre Karazli, VP-Construction Segment, CNH APAC, Shalabh Chaturvedi, Managing Director, CASE India & SAARC, Satendra Tiwari, Executive Director – Operations, Mr. Puneet Vidyarthi, Head of Brand Marketing, APAC along with representatives from the company. With an expected footfall of over ..

Next Story
Infrastructure Energy

CleanMax Announces Financing for Onsite Solar Projects in UAE

CleanMax, one of Asia's leading renewable energy providers for the Commercial and Industrial (C&I) sector and a Brookfield-backed company, announced that it will obtain AED 99 Million (USD 27 Million) long term credit facility from HSBC to develop and finance its onsite solar portfolio in the UAE. The facility will cover 92 onsite solar assets, located on industrial facilities, malls, schools and universities. The financing arrangement also provides an uncommitted accordion of AED 37 Million (USD 10 Million) for development of future projects, in alignment with UAE’s Net Zero 2050 Strategy. ..

Next Story
Infrastructure Urban

Virtusa Foundation’s School Restoration Project Wins UNESCO Award

Virtusa, through the Virtusa Foundation, proudly announces that the restoration of the Byramjee Jeejeebhoy Parsee Charitable Institution (B.J.P.C.I) in Mumbai has been honored with the ‘Award of Merit’ from the UNESCO Asia-Pacific Awards for Cultural Heritage Conservation 2024. This project, which aligns with the Virtusa Foundation’s core pillars of education, empowerment, and environment, highlights Virtusa’s commitment to sustainability and social impact. By supporting restoring this 134-year-old structure, Virtusa has helped preserve a vital piece of history while ensuring the insti..

Hi There!

"Now get regular updates from CW Magazine on WhatsApp!

Join the CW WhatsApp channel for the latest news, industry events, expert insights, and project updates from the construction and infrastructure industry.

Click the link below to join"

+91 81086 03000