First ever  Rooftop Solar Tender Issued by Madhya Pradesh

The Madhya Pradesh Urja Vikas Nigam Limited (MPUVNL) in collaboration with World Bank has tendered for 33 MW of grid-connected rooftop solar PV projects. The project has seen sunlight after multiple efforts to float it earlier, a period that has seen capacity changes as well as more efforts made to make it developer friendly.

Touted as first ever rooftop tender in India that has pre-identified project sites and a unique data room with site-specific information already made available that will be set up in the state under the RESCO model. Readers will know that unlike the CAPEX model, a consumer does not have to pay anything upfront in a RESCO model, paying instead of a pre-agreed tariff on a monthly basis to the developer based on consumption. MPUVNL has successfully identified 567 project sites for the program, which have been divided into 27 project groups and bidders can place bids for more than one project group, giving them the option to submit up to 27 storage bids along with individual bid securities.

Winning bidders will be required to undertake the designing, engineering, supply, installation, testing, and commissioning of various capacities of projects and interconnection with the distribution company (DISCOM) as per the guidelines of the EPC contracts. We assume that the commissioning time will remain 9 months from the day of awarding.

Project developers will also be responsible for 25 years of successful operation and maintenance of the projects. The bidders will also provide warranties covering the rectification of all defects in the design of equipment, materials, and workmanship including spare parts for a period of 25 years from the date of operation. The deadline for bid submissions is 9th August, 2018.

Key features of the tender that make it the first of its kind:

1. The state authority has a prepared list of 567 project sites for this program. Expected to help reduce the installers’ time and effort in finding procurers with enough demand and rooftop space.
2. A first of its kind data room has been set up with the help of World Bank which includes site-specific information and consumption history to reduce the risk profile of projects. Expected to pique the interest of more and more bidders.
3. MPUVNL provides for compensation to RESCO developer in the event of early termination, which can be triggered by the event of default by either developer, or procurer, or if the procurer wishes to terminate early without any such default.
4. MPUVNL has ensured proper project sizing to streamline demand and revenue for bidders. Further dividing projects into groups streamlines the entire system, making it more efficient in providing the developer with a uniform credit profile. Thus, also reducing the payment risks. Although details on the ‘credit profile’ are awaited, as typically developers try not too below say, an A+ rated firm when it comes to this model.
5. Both central and state subsidies are available for developers, increasing the possibility of fairly competitive rates.

The planned 40 GW target of rooftop installations by 2022 hasn’t really kicked on. We’ve witnessed a meagre 2.4 GW in installations so far, and the market doesn’t suggest any boom in the sector in the near future. These innovative tenders, however, might help bridge the gap for India to achieve its target.

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