The initiative is mainly aimed at bringing down power tariff for making electricity more affordable and achieving the ambitious goal of 24X7 power for all.
"The Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi has approved the time period for the provisional mega projects (25 projects), for furnishing the final mega certificates to the tax authorities be extended to 120 months instead of 60 months from the date of import," an official statement said.
It further said that the CCEA also approved 25 Provisional Mega certified projects for Mega Policy benefits in proportion to the long-term power purchase agreement (PPA) tied up, as permitted under the Mega Power Policy, once the specified threshold capacity of the project gets commissioned.
However, the money realised by the developer, if any, as a result of release of proportionate bank guarantee would first be utilised towards the repayment of the bank dues by the developer, it said.
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This is expected to enable developers to competitively bid for PPAs in future. Once the developer commissions the specified threshold capacity, proportional mega benefits would facilitate easing out liquidity crunch with the developers/banks and improve the viability of their projects, it said.
The increased power availability will boost overall growth of the country and also ensure that cost of power to the consumers does not increase, it added.
Giving details about these 25 projects, a source said that total stranded capacity is around 31GW which is entailing investment of over Rs 1.5 lakh crore.
The 31 GW projects include around 3,300 MW of gas-based power generation capacities.
The Mega Power Policy was unveiled in 2009 with an objective to increase power availability, to boost overall growth of the country and also to ensure that consumers are reasonably charged for electricity supplied.
The policy was later amended in 2014 mandating developers to tie up at least 65 per cent of installed capacity/net capacity through competitive bidding and 35 per cent under regulated tariff of host state under long term PPA with discoms/state designated agency to avail benefits under the policy.
The other amendment was for extension of the maximum time period to 60 months instead of 36 months from the date of import for provisional mega projects, for furnishing final mega certificates to tax authorities.
The benefits under the policy include zero customs duty, deemed export benefits and income tax benefits.
The mega power projects include an inter-state thermal power plant of a capacity of 700 MW or more located in the states of Jammu and Kashmir, Sikkim, Arunachal Pradesh, Assam, Meghalaya, Manipur, Mizoram, Nagaland and Tripura. Besides, thermal projects with a capacity of 1,000 MW or more, located in other states are also considered as mega power projects.
Besides, it also include an inter-state hydel power plant of a capacity of 500 MW or more, located in states other than specified in the policy.