Land Approval Delays in Karnataka has the MNRE Concerned

Barely a day after news reports announced its elevation to the no. 1 ranking for renewable energy in India, Karnataka faces an unexpected complaint. Slow progress on and allotments for solar projects. The Ministry of New and Renewable Energy (MNRE) has written to the Karnataka government citing 24 solar power projects with total capacity of 970 MW being implemented by the Solar Energy Corporation of India (SECI) under MNRE’s 2,000 MW Viability Gap Funding (VGF) program in Karnataka, and expressing its concern over delays in granting land approval for these various solar projects.

The ministry believes this delay in land approvals by the Karnataka state government is capable of affecting the country’s renewable growth trajectory. Delays on part of the Karnataka government has led to two problems, one in the form of financial stress to the developers who’ve had their expensive projects stalled but also a negative sentiment for the sector that might affect the development of solar power industry. For the record, Karnataka added almost 5 GW of renewables capacity in 2017-18, mostly solar.

According to guidelines and bidding conditions of the VGF program, the winning bidder needs to submit the financial closure of the project with all the necessary documents within seven months of the signing of the PPA (Power Purchase Agreement). One of the necessary documents for financial closure needs to be the papers citing the land approval for the project. Due to which, the SECI now have multiple projects delayed because their land approvals are still pending.

The letter, signed by Anand Kumar, the secretary at MNRE, has asked the Karnataka government to give adequate direction to the concerned departments.

A key reason for the vast interest of the central ministry in the delay of the projects comes from the fact that Karnataka is the leading solar state now. In the first three months alone of this year, the state matched its annual record of 2 GW of installations. With its showcase state stumbling, perhaps it is natural for MNRE to be more worried and act with alacrity.

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