India's Ministry of New and Renewable Energy has issued an order stating that renewable energy companies will be blacklisted for a period of three to five years if they fail to meet project completion deadlines.
The government will encash the bank guarantees of non-performing companies and blacklist them after issuing a show cause notice. This marks the first time that India has introduced blacklisting of renewable energy companies for delays.
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The order comes as India strives to achieve its commitment of 500 gigawatts of renewable energy generation capacity by 2030. To meet this target, the country needs to add over 40 gigawatts capacity annually.
Currently, India's renewable energy installed base stands at nearly 175 gigawatts, with an installation rate of less than 15 gigawatts per annum, largely due to disruptions in equipment supply caused by heavy import duties on solar equipment.
While the Ministry has granted several extensions due to the COVID-19 pandemic, the order issued on Wednesday underscores the government's commitment to completing projects in a timely manner.
The blacklisting of non-performing companies is in accordance with the government's General Financial Rules and will apply to all tenders.
According to sources, the new policy is likely to have a significant impact on the renewable energy sector, which has witnessed an influx of domestic and international players in recent years.
The policy is expected to encourage companies to complete their projects within the prescribed timelines and will help India achieve its renewable energy targets in a timely manner.
While the Ministry did not immediately respond to queries sent by Reuters, industry experts have hailed the move as a positive step towards promoting transparency and accountability in the renewable energy sector.
The blacklisting of non-performing companies is expected to ensure that companies comply with the timelines and guidelines set by the government, which will ultimately benefit the sector and help India achieve its renewable energy goals.
(Edited by : Soham Shetty)
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