In the latest setback to the JNNSM allocation of Solar Power Plants amongst the fact that a number of plants may not be commissioned on the deadlines allocated, the CSE has accused Lanco of creating front companies to defraud the government of almost Rs. 13000 Crores. The government has also decided to investigate the allegations seriously by setting up a panel.
The PPA terms negate project developers from selling or liquidating their shareholding in a major way which was to deter opportunistic trading of such projects.
This could be a precursor of a waterfall investigation into alleged malpractise of a similar nature by other organizations in all JNNSM allocations to date and could spill over to those in the state of Gujarat as well.
This bodes ill for all those developers who weren’t or haven’t yet been able to setup their allocated power plants due to lack of internal sources of funds for equity and debt. Amongst other concerns would the investigation that, there are developers who have sold their PPAs in breach of their legal contracts.
Solar power project PPAs have been extremely difficult to come by with total nationwide allocations of approx 2GW against applications of more than 8+GW (incl RSSGP, Migration, Phase 1, Phase 2 and Gujarat Batch 1 & 2) with funding also being another chief concern. The installed capacity to date across the country has barely crossed 100MW even though the deadlines have expired for most projects excluding JNNSM Phase 1 Batch 2.
The penalties for non delivery have already started pulling a number of developers into the red. This setback would further impact the nascent grid based solar industry.