MNRE Blacklisting Renewable Energy Developers in India

The Ministry of New and Renewable Energy (MNRE) has instructed Public Sector Undertakings (PSUs) to blacklist renewable energy developers who fail to complete projects within the specified deadline, with blacklisting periods ranging from three to five years.

The Solar Energy Corporation of India, NTPC, and NHPC were specifically addressed in the communication, as these companies issue tenders for private sector companies to develop renewable energy projects.

The ministry has also directed these PSUs to encash the bank guarantees of developers in case of project commissioning delays, in accordance with the Government’s General Financial Rules (GFR). While it is typical to encash bank guarantees for project delays, blacklisting companies is not commonly included in tender or bid documents.

The Ministry of Finance amended the GFR in 2017 to include provisions for blacklisting organizations that fail to meet the government’s prescribed deadlines. In 2020, MNRE provided an extension for all under-construction projects due to the COVID-19 pandemic.

Recently, the ministry granted a timeline extension until September 30, 2024, for solar projects under the Central PSU program being implemented by SECI and IREDA, and in January of this year, extended the timeline for solar and hybrid power projects until March 2024.

The government is under pressure to achieve its non-fossil energy targets, but developers are grappling with various issues such as the financial feasibility of projects, module price increases, growing interest rates, rupee depreciation, land acquisition, and availability of power evacuation infrastructure.