Bidders can furnish letter of undertaking instead of bank guarantees for renewable power projects

The central government has approved a proposal that allows renewable energy developers to furnish a letter of undertaking issued by Indian Renewable Energy Development Agency Ltd., Power Finance Corporation Ltd. or REC Ltd. in lieu of bank guarantees under state auctions for renewable power projects.

In a letter to the agencies, the Ministry of New and Renewable Energy (MNRE) has said that SECI, NTPC, NHPC or any other implementing agency on behalf of the ministry may accept earnest money deposit (EMD), in the form of bank guarantees or ‘Payment on Order instrument’. Such letters will have same effect as that of a bank guarantee issued by any public sector bank. IREDA, PFC or REC may issue such letters of undertaking as per their policy, on merit and after due diligence.

GET ACCESS TO OUR ARTICLES

Enter your email address