The government on 31-03-2017 approved the extension of mega power policy to benefit 24 plants of 30,000-mw capacity that are expected to get benefits of more than Rs 10,000 crore.
The cabinet committee on economic affairs approved amendments to the mega policy and is is likely to extend term of power purchase agreements signing to enable these 24 plants to avail the benefits of mega status. The amendments also proposes to release bank guarantee in proportion to percentage of capacity for which long term PPA has been signed, an official statement said.
While 11,000 mw of the capacity is commissioned, remaining is under construction. The policy will lead to lower tariff, affordable power for distribution companies, avoid potential stressed assets worth Rs. 1.5 lakh crore, the statement said.
The mega status was provided to thermal plants of over 1000-mw and hydro plants of 700-mw. These plants however, had to fulfil provisions including 85% long-term PPAs. Having a mega status gave these plants various incentives including lower customs duty, exemption from excise duty and deemed export benefits.
"Unfortunately, due to missteps and misgovernance of the UPA regime, the entire power sector was jeopardised. Many projects became stalled and caused stress on Bank balance sheets thereby limiting credit flow across the economy and affecting future investments," the statement said.
The policy was withdrawn for projects other than those already issued certificates before July, 2012.
Source - ET