Ministry of New and Renewable Energy has sought approval from the Cabinet Committee on Economic Affairs (CCEA), to implement Viability Gap Funding (VGF) for setting up a solar plant.

MNRE is proposing the Viability Gap Funding scheme, to be implemented through the Solar Energy Corporation of India (SECI), to construct grid-connected solar PV power projects of 750 MW aggregate capacity. The project will be set up under Batch-I of Phase-II of Jawaharlal Nehru National Solar Mission (JNNSM).

The scheme will ensure project viability for selling generated power at a fixed levelised tariff of Rs 5.45/kWh for 25 years to SECI. On its part, SECI will further sell it to state utilities and discoms at a fixed tariff of Rs 5.50 per unit for 25 years. For this, MNRE has sought CCEA's approval to provide Rs 1,875 crore from National Clean Energy Fund (NCEF) for implementing the VGF scheme, along with its permission to establish a payment security mechanism with SECI.

Meanwhile, the Ministry has a target of adding 20,000 MW of grid-connected solar power by 2022 in three phases under JNNSM. However, till March 2013, it has added 1,684 MW in Phase I. In phase II, ie. from April 2013 to March 2017, MNRE plans to achieve a further capacity addition of 9000 MW.