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AUG 16 2016

Madhya Pradesh to provide state guarantee for 750 Mw Rewa ultra mega solar project

  • Economic Times, ET Bureau / Hyderabad
  • Created: Tue 16th AUG 2016


To ensure viability of its ultra mega solar energy park at Rewa, the Madhya Pradesh government will extend a state guarantee to the flagship project. Billed as the world’s largest contiguous solar park, the project entails an investment of Rs 7,500 crore.

The guarantee would ensure against a default in payment to Rewa Ultra Mega Solar (RUMS), a joint venture of the state’s Urja Vikas Nigam and the Union government’s Solar Energy Corporation of India. The state Cabinet is likely to approve the guarantee this week. The park is expected to have a capacity of 750 Mw.

Of the power generated, 75 per cent would be procured by Madhya Pradesh Power Management Company (MPPMC) and the other 25 per cent by Delhi Metro Rail Corporation. Power purchase agreements (PPAs) and related deals are to be signed.

So will a Land Use Purchase Agreement for the 1,530 hectares required, of which 90 per cent has been acquired. RUMS will provide 90 per cent of the land within 30 days from the signing of PPAs.

After which the solar power developer’s construction timeline will start. The other tenth of the land will be provided within three months of PPA signing. In a delay beyond 10 months, the unit capacity will be reduced proportionately.

The state would invite a formal Request for Proposal by September.

Manu Srivastava, chairman, RUMS, and the state’s principal secretary, renewable energy, told this newspaper: “There would be a three-tier payment security mechanism, comprising a letter of credit of 1.25 times the average monthly billing for 12 months, a Payment Security Fund being approved soon, to be created by RUMS and a state guarantee for MPPMC’s payment obligation under the PPA.”

He said the project would get a loan from the World Bank and the Clean Technology Fund.

Power Grid Corporation of India, he added, was constructing a sub-station and  line to connect the project with the inter-state transmission system. RUMS is about to award related tenders. Open access and connectivity was granted in June. Rewa is the first mega solar energy park coming up in the state. The rate for supply from here is to be decided after the bids are finalised.

Under the project framework, the first contract year’s rate will be as quoted by the selected bidder. From the second year, there will be a rise of five paise annually for 15 years, inclusive of all taxes. Srivastava said that in case of occurrence of any change in law, including taxes, coming into effect after the bid due date, its relief will be determined by the Madhya Pradesh Electricity Regulatory Commission.


  • Nearly 75 per cent power to be procured by MPPMC and the balance 25 per cent by DMRC
  • First contract year tariff to be as quoted by selected bidder while there will be escalation from second contract year onwards by 5 paise per unit each year for 15 contract years
  • Project to get loan from World Bank and Clean Technology Fund                      
  • Payment security mechanism comprises creation of payment security fund by RUMS


Delhi Madhya Pradesh Open Access Power Grid Grid Transmission System Renewable Energy Solar Energy Letter of Credit Payment Security Tariff Energy Joint Venture Electricity Regulatory Commission Power Electricity VIKAS India solar power Solar Solar Energy Corporation Of India

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