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CPSU Scheme Phase-II Powers Solar Expansion with Viability Gap Funding

Minister Shripad Yesso Naik informed Rajya Sabha about CPSU Phase-II, supporting NTPC, SJVN Green Energy, NHPC, NLC India, and others with Viability Gap Funding (VGF) for solar projects using Indian-made PV modules, managed by SECI and IREDA without PPAs.

March 14, 2025. By EI News Network

The Government of India, under the Ministry of New and Renewable Energy (MNRE), is implementing the Central Public Sector Undertaking (CPSU) Scheme Phase-II to promote the development of grid-connected solar photovoltaic (PV) power projects by government producers.

This was disclosed by Shripad Yesso Naik, Minister of State for New and Renewable Energy and Power, responding to a query from Sanjay Kumar Jha in the Rajya Sabha regarding the government’s initiatives in manufacturing solar PV power plants, providing insights into the Central Public Sector Undertaking (CPSU) Scheme Phase-II.

He further said that the scheme provides Viability Gap Funding (VGF) to these producers for setting up solar plants for self-consumption or supply to government entities, including Distribution Companies (DISCOMs).

Naik further detailed the financial assistance provided under the CPSU Scheme Phase-II, with Viability Gap Funding (VGF) disbursed to multiple government entities. In Tranche-I, NTPC Ltd. received INR 538.30 crore for a 769 MW project.

The Singareni Collieries Company Ltd. received INR 54 crore for 90 MW, while Delhi Metro Rail Corporation Limited received INR 1.05 crore for 3 MW. Other beneficiaries include Assam Power Distribution Company Ltd., Nalanda University, and NHDC Ltd., though some projects faced cancellations. Tranche II saw NTPC Ltd. receiving INR 541.10 crore for 923 MW, and The Singareni Collieries Company Ltd. obtaining INR 29.07 crore for 81 MW, with Indore Municipal Corporation receiving an allocation but facing cancellations for part of its capacity.

Tranche-III, the largest allocation phase, saw SJVN Green Energy Ltd. securing INR 223.60 crore for 1000 MW, NLC India Ltd. receiving INR 114.11 crore for 510 MW, NHPC Ltd. granted INR 224.50 crore for 1000 MW, and IRCON International Limited receiving INR 112.35 crore for 500 MW. NTPC Ltd. also secured INR 447.25 crore for an additional 1990 MW, while Solar Energy Corporation of India Ltd. (SECI) was awarded 1200 MW without any VGF allocation.

To promote domestic manufacturing, the scheme mandates the use of solar PV cells and modules made in India. The selection of government producers is conducted through a bidding process managed by Solar Energy Corporation of India (SECI) for Tranche-I & II and Indian Renewable Energy Development Agency (IREDA) for Tranche-III.

The minister clarified that the central government and implementing agencies do not enter into Power Purchase Agreements (PPAs) with the selected government producers. Instead, these producers must either consume the power generated themselves or enter agreements with off-takers.

Clarifying the eligibility criteria, Naik stated that only government producers can set up solar PV power projects under the CPSU Scheme Phase II. A government producer is defined as an entity either directly controlled by the central or state government, operating under their administrative control, or having more than 50 percent government shareholding. Private companies are not permitted to participate in this scheme.

The minister emphasised that through financial assistance and policy support, the government aims to strengthen India's renewable energy sector, reduce dependence on fossil fuels, and enhance the country's energy security.

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