Central Financial assistance/ Final support in the form of grants/ assistance/ subsidy is given upto 25 MW capacity SHP in respect of following schemes/activities.

A)    Resource Assessment and support for identification of new sites: Scheme to support Identification of new potential SHP sites, preparation of Plan and Detailed Project Report (DPR) including survey &investigation (DSI) for SHP project sites to the Central / State Govt. Dept. & agencies /local bodies. Details are given at Annexure- A.

B)    Scheme to support for setting up new SHP projects in the private/ co-operative / joint sector etc. Details are given at Annexure-B.

C)    Scheme to to support for setting up new SHP projects in the Government sector. Details are given at Annexure-C.

D)    Scheme to support for Renovation and Modernization of existing SHP projects in the Government sector. Details are given at Annexure-D.

E)     Scheme to support for development / up gradation of water Mills (Mechanical/electrical output) and setting up Micro Hydel Projects (upto 100 KW capacity). Details are given at Annexure-E.

F)     Research & Development and Human Resource Development: Support to R & d projects, Strengthening of technical institutions, setting up of turbine laboratory, business meets, training programs / courses , fellowships etc. monitoring of SHP projects, consultancy and/ or any other activity felt necessary for the SHP development. The financial assistance will be considered for these activities on case to case basis. Details are given at Annexure-F.

2.The scheme will be implemented through the state Governments departments, State Electricity Boards, State Nodal Agencies , private developers, individual Entrepreneurs Tea Gardens , NGOs, Water Mill associations, academic and financial institutions/ Banks etc. as indicated under individual schemes, given at annexures A to F. The Proposals by the implementing agencies / developers should be in the format prescribed by this Ministry for individual schemes. Incomplete proposals in any form received by this Ministry for individual schemes. Incomplete proposals in any form received by this Ministry will not be entertained.

3.Monitoring Mechanism: The implementing agencies will set up a reviewing arrangement to closely monitor the implementation of their projects covered under the programme. The Ministry will also monitor the progress of the projects. The Ministry may also appoint independent consultants/ organizations to monitor the projects.

4.Payment Terms: The release of funds under each scheme will as per the terms and conditions mentioned in the respective schemes and also subject to the general terms and conditions for grants/ assistance of the Government of India. UCs are to be submitted as per the Performa attached with the Administrative Approval.

5.Budget Provision: The expenditure on the above schemes of SHP programme will be met from the budget provisions for the SHP programme.

6.The aforesaid programme on Small Hydro Power development is subject to such change(s)/modification(s) as may be decided by the Government of India from time to time and subject to the availability of funds.

7.In case of any ambiguity in these schemes, decision of the Ministry shall be final.

8.The issue under the delegated powers of the Ministry and with the concurrence of IFD, MNRE vide their diary No. 1206/JS&FA/14 dated 30^th May, 2014 and with the approval of the Minister (NRE).

 

SCHEME FOR FINANCIAL SUPPORT TO SET UP NEW SHP PROJECTS UPTO 25 MW CAPAC ITY IN THE PRIVATE , CO-OPERATIVE , JOINT SECTOR ETC.

FINANCIAL SUPPORT FOR NEW SHP PROJECTS:

1.      The Ministry of New and renewable Energy (MNRE) is encouraging setting up of Small Hydro Power (SHP) projects in the private sector, Joint sector, co-operative sector, etc. The Ministry will provide financial support for the new SHP projects up to 25 MW capacity.

2.      The Financial support would be released in two installments. The first installment of 50% of financial support is proposed to be released to the financial institution /bank, after placement of order for electro-mechanical equipment and disbursement of 50% loan during execution of the project and the balance 50% of financial support after successful commissioning of project, commercial generation & performance testing. In case a project is set up by a developer (such as tea garden, captive power projects etc.) fully through its own financial resources, the total financial support will be released directly to him after successful commissioning of the project & performance testing.

3.      The quantum of financial support will be independent of the term loan and will be limited to the amount indicated below:

Category	Above 0.1 MW-25 MW
NE Region, J& K, H.P. & Uttarakhand (Special category States)	1.5 crore/MW limited to 5.00 crore per project
Other states	1.0 crore/ MW limited to 5.00 crore per project

 

4.      The Project developers/ owners are required to contribute a minimum of 50% of approved project cost (Loan + Equity).

Eligibility Criteria:

5.      The SHP projects up to 25 MW capacity taken up in private sector , joint sector, co-operative sector, etc. are eligible for financial support under the scheme . This is subject to the following:

(i)                 The request on application form along with documentary proof, for the grant of financial support for SHP project, complete in all respect from the developer should be submitted to the Ministry within six months from the commencement of the project work at the site or within six months from the date of first disbursement of loan from the Financial institution / Bank whichever is earlier.

(ii)               The financial institutions (FIs) such as IREDA, PFC,REC,IDBI, ICICI,IFCI, and state /Nationalized / Scheduled Banks, controlled /governed by RBI , or any other FI/ Bank as may be acceptable to the Ministry from time to time , shall be eligible under the scheme.

(iii)             Defaulter in repayment of loan will not be eligible for financial support.

(iv)             The projects where the existing capacity has been enhanced / uprated by adding more new units after obtaining the specific approval of the competent authorities will also be eligible for financial support limited to the new additional units only.

6.      The SHP projects where construction work had commenced on or before 31^st March , 2013, the amount of financial support would be decided as per SHP scheme 2009-10 as was circulated vide this ministry`s letter no. 14 (1) / 2008-SHP dated 11^th Dec, 2009 and continued up to year 2012-13.

7.      The SHP projects where the project has commenced on or after 1^st April 2013 with intimation to this ministry will be given subsidy as per this scheme.

Procedure to Avail Subsidy

8.      The developers intending to avail financial support , are required to submit the request on application form ( Performa B-I) along with the following enclosures directly to the ministry:

i)                    Detailed Project Report.

ii)                  Copy of Allotment letter from the State Govt./Agency.

iii)                Copy of MOU with State Govt.

iv)                Copy of the Power Purchase agreement.

v)                  Scheduled date of commencement of works.

vi)                Scheduled date of completion of project.

vii)              Expected monthly and annual generation as per approved DPR.

viii)            Copy of the loan sanction letter of the FI/ bank.

ix)                Copy of the loan agreement between the FI/bank and developer.

x)                  Copy of the loan installment release letter /certificate.

9.      If the total cost of project is fully met/borne by developer through its own financial resources, the details mentioned at (viii), (ix) $ (x) of para 8 above will not be applicable.

10.  A copy of the application should also be submitted to the concerned FI/bank and to the State Govt. dept./agency which has allotted the project.

11.  The State Govt. dept./agency will forward their recommendations & verifications on the details given in the application with respect to the allotment of project along with present progress & expected date of commissioning.

12.  The FIs / banks will forward their recommendations & verifications on the details given in the application, present & proposed financial disbursement and a copy of their loan appraisal report duly filled application with form (Performa B-II ).

13.  In case more than one FI/ bank is providing term loan for a project , the lead FI / bank will co-operative with the Ministry for the financial support proposal on behalf of other FIs / banks also and will operate the scheme for financial support.

14.  At the time applying for financial support, the developer would clearly & carefully indicate the proposed dates of successful completion of the project and commencement of commercial generation.

15.  After completion of the project and performance guarantee tests, the developer would ensure physical inspection / testing & certification of performance of the project from AHEC-IIT Roorkee and / or any other organization decided by the Ministry.

a.       Projects with installed capacity of 1MW and below will only be subjected to physical inspection relating to proper installation and commissioning in order to determine the related capacity and generation at rated load with 10% overloading for grid connected or load capacity as available for off grid connecting.

b.      Projects with installed capacity of 1MW would be subjected to full testing and certification of performance.

16.  The Ministry will examine the request and will issue "in-principle" approval subject to fulfilling of all eligibility conditions for the grant of financial support with intimation to the integrated Finance Division (IFD) of this Ministry for the project as per scheme and the FI / bank & developer will also be informed accordingly.

Sanction of Subsidy and Release of Funds

17.  The Ministry will examine the proposal and approve grant of financial support on the basis of overall viability of the proposal, fulfillment of general terms and conditions and availability of funds.

18.  First installment of 50% of the sanctioned financial support would be considered for release, as advance, to the FI / Bank during the execution of the project, subject to the following conditions:

i.                    After placement of order for electro-mechanical equipment.

ii.                  After disbursement of 50% of the sanctioned loan by the FIs / Banks

iii.                On submission of bank guarantee and

iv.                Subject to fulfillment of order conditions, as required.

19.  The irrevocable bank Guarantee (BG) should be submitted to the Ministry for the release of 50% of eligible financial support as advance during the execution of project. The period of BG should be valid till the Project is actually commissioned and the next installment of balance funds are also released by their Ministry. Further, the BG should not be encased without the prior approval of the Ministry. In case of any default conditions in completion / commissioning of project, the Ministry would have full authority to encase the BG without any notice to the developer. BG is further to terms and conditions as per Government of India Rules.

20.  Balance 50% of the sanctioned financial support would release to the FI/ Bank, after commissioning, commercial generation & testing of project.

21.  The release of first installment of 50% of sanctioned financial support will be optional to the developers. Alternatively, total financial support would be released after successful commissioning, commercial generation & testing of project.

Pattern of releases:

22.  Eligible financial support will be released in two installments as per the following pattern:

1st Installment (optional)	Release as advance on award of E&M works, 50% loan disbursement, achieving 50% progress and submission of physical & financial progress reports, photographs, and audited statement of Expenditure. The fund will be released only on receipt of Bank Guarantee for proposed release of funds.	50%
2nd Installment	On the successful commissioning of the project and on Receipt of: i.                    Completion Report. ii.                  Utilization Certificate. iii.                Generation data. iv.                Audited Statement of Expenditure (based on actual expenditure on the project etc.) v.                  Performance testing for projects above 1 MW. vi.                Physical inspection report for the projects of 1MW and below. vii.              80% of generation for the corresponding months as envisaged in the DPR for a minimum of three consecutive months OR 80% cumulative annual generation for one year as envisaged in the DPR.	50%

 

Release of Financial Support:

23.  The developer would inform the Ministry about placement of orders for electro- mechanical equipment, disbursement of 50% of term loan & achievement of 50% on the project to consider for release of first installment of financial support. For release of second installment of financial support, the developer would further inform the Ministry of successful completion of the project, fulfillment of performance guarantee tests / testing & certification of performance, physical inspection of the project and the commencement of commercial generation.

24.  The developer would send monthly generation report to the Ministry after start of commercial generation till the time the project attains 80% of the quantum of generation for the corresponding months as envisaged in the DPR for a minimum of three consecutive months or 80% annual cumulative generation whichever is application. The developer would also provide proof of energy generation whichever such as certificate from SEB/Power Transmission corporation/company etc. regarding purchase/wheeling of power. In case of grid failure, the documentary proof from the EB/ Power Transmission Corp./Company/Utility should be attached.

25.  At this stage, the FI would submit a certificate to the Ministry that the project is not a "nonperforming asset" (NPA) and the developer is not a defaulter . In case, the developer is a defaulter/NPA as per the FI norm, he will not be eligible for the financial support.

26.  After being satisfied regarding power generation as per clause 24 above, the Ministry would release the financial support to the financial institutions/ banks, subject to availability of funds.

27.  The Financial Institution/bank would adjust the amount as deemed fit, after receipt of the financial support. The FI/ bank will not charge any pre-payment penalty, if any, from the developer for this amount.

28.  After utilization of the financial support as pre-payment, the FI would immediately submit utilization certificate as per format (Performa- P) to the Ministry.

29.  A grace period of 12 months will be available for commissioning of project from the original schedule date of commissioning as indicated by the developer in his application due to natural calamities and / or any other unforeseen reasons for delays during execution of project. For any further delay, the financial support would be reduced @ 5% for every quarter delay in commissioning of the project. The developers should regularly inform the Ministry if the project is getting delayed along with detailed reasons.

30.  The projects could not complete or commission within scheduled period due to exceptional / inordinate delays in completion of allied structures of the projects, by other Government departments or agencies such as SEB, irrigations, PWD or contractual programs / under litigation etc. would be considered on merits of the case which otherwise would have been commissioned as per schedule, on receipt of specific representation with documentary proof from the developer and verification from the concerned State authorities.

Miscellaneous

31.  Incomplete proposals in any form and without requisite documents will not be entertained in the Ministry.

32.  In case the financial support is not adjusted against loan of the developer by the FIs / Banks within three months from the date of release of financial support by the Ministry , the FI / Bank will required to pay interest on the amount @ 10% per annum, to Ministry.

33.  Contracts for electro-mechanical works should be decided through competitive bidding process. The procurement of SHP equipment should be made as per the following provisions. This must be ensured by the FI / bank.

●         The bidder must be a turbine manufacturer, or his authorized representative, who has designed, manufactured, supplied, erected and commissioned hydro generating units of similar type and capacity. He can also be a turnkey contractor with experience of similar SHP works.

●         The equipment supplied must conform to relevant International / National codes of practice / AHEC issued standards/ guidelines / manuals including the following standards:

Equipment	Standard
Turbines and generator (rotating electrical machines)	IEC 34 - 1 : 1983 IEC 61366 - 1 : 1998 IEC 61116 - 1992 IS : 4722 - 2001 IS : 12800 (part 3) 1991
Governing system for hydraulic turbines	IEC 60308
Transformers	IS 3156 - 1992 IS 2705 - 1992 IS 2026 - 1983
Inlet valves for hydro power stations & systems	IS 7326 - 1902

 

●         Generating equipment is also required to have 10% overloading capacity.

34.  The tender document must clearly specify the standard clauses of minimum functional efficiency of the units (60% weighted average efficiency of TG units up to 100 KW and 75% weighted average efficiency of TG units above 100 KW capacity), evaluation criteria based on loading on the basis of efficiency variations etc., ensuring quality of the equipments as per prevailing Indian / International standards and provisions for type tests & field tests for the purpose of acceptance of the equipments. The tender document must also contain sufficient penalty and guarantee clauses.

35.  The Ministry reserves the right to review/revoke the financial support and in case the financial support has already been released to withhold the financial support and in case the financial support already released to the developer in the event of subsequent developments coming to the notice of the Ministry which may affect the project and the FI / Bank / developer shall be bound by the decision of the Ministry in this regard.

36.  The above scheme will be effective for the financial year 201-15 & remaining period of the 12^th Plan i.e. up to 31^st March 2017, unless further modified, and will supersedes the earlier scheme in this regard under SHP programme of the Ministry, circulated prior to this Administrative Approval. However, the scheme will be effective for projects taken up on or after 1^st April, 2013 under intimation to the Ministry as Mentioned in Para-7 above (page no. 8).