India allocates INR 1875 crore for VGF of Phase 2 of National Solar Mission

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The Government of India has set aside INR 1875 crore (USD 306 million) for the Viability Gap Funding (VGF) mechanism in phase 2, batch 1 of the nation’s National Solar Mission (NSM), Solarserver reported.

Indian solarFunds will be secured through the National Clean Energy Fund (NCEF).

The decision came after approving regulations for phase 2 earlier in October 2013.
This amounts to INR 2.5 crore (USD 410,000) per MW for the 750 MW of solar photovoltaic (PV) projects to be approved through phase 2, batch 1.

Under the new program, qualifying PV projects will be paid INR 4.75-5.45 (USD 0.0776-0.0890) per kWh over 25-year contracts. Developers will bid for additional amounts of VGF, with the first 750 MW of projects with the lowest bids chosen, the report said.

Half of the total capacity at 375 MW must use domestically manufactured PV cells and modules, with no domestic content requirement for the remaining 375 MW.

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