Bridge India

MNRE allows pass-through of duty risk

Last week, MNRE issued a clarification to its guidelines for competitive bidding of solar PV projects. The clarification allows inclusion of changes in duties and other cesses in Change in Law provisions in power purchase agreements. It effectively means that risk of any new duties or changes in duties including safeguard and/or anti-dumping duties arising after the “last date of bid submission” would be borne by the power purchasers ie DISCOMs.

  • The protection offered to developers is highly welcome even if it poses some operational challenges and doesn’t eliminate the risk entirely;
  • It paves way for the tender pipeline, stuck for many months, to start moving forward;
  • The status of projects auctioned without any explicit protection remains unclear;

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