(The Gist of PIB) Ministry of New and Renewable Energy

(THE GIST OF PIB) Ministry of New and Renewable Energy

Union Minister for New and Renewable Energy and Power has approved a proposal for acceptance of Letter of Undertaking issued by IREDA, PFC and REC in lieu of Bank Guarantees for Earnest Money Deposit (EMD) by SECI, NTPC and NHPC in the case of tenders/biddings for developing Renewable Energy (RE) projects in the country.
Indian Renewable Energy Development Agency Limited (IREDA), Power Finance Corporation Limited (PFC) and REC Limited (REC) are the three NBFC under Ministry of New and Renewable Energy (MNRE)/ Ministry of Power (MoP).
About:
Now, SECI, NTPC, NHPC or any other implementing agency on behalf of Ministry of New and Renewable Energy (MNRE) may accept Earnest Money Deposit (EMD), in the form of Bank Guarantee(s) or ‘Payment on Order instrument’.
'Payment on Order instrument’ means Letter of Undertaking from IREDA or PFC or REC [the three NBFC under MNRE/ Ministry of Power (MoP)], to pay in case situation of default of RE power generator in terms of tender conditions and /or Power Purchase Agreement (PPA) arises.
Such "Payment on Order instrument" would have terms and conditions similar to that of any Bank Guarantee given by any public sector bank and would promise to pay the Procurer on demand within stipulated time.