One of the many key focus areas of the proposed amendment is promotion of renewables. The preparation and notification of National Renewable Energy Policy is a welcome and a much-needed step in this direction. Fixation of national level unified RPO trajectory through this policy and also other directives for renewable growth and market development will certainly boost the investor’s confidence.
SRISHTI AHUJA, PARTNER, Transaction Advisory Services, EY
One of the key amendments proposed is that subsidy would be provided to consumers directly rather than being provided via distribution utilities. Further, amendments aim to seek that retail tariffs would be increased to ensure that such retail tariff fully reflects the cost of power which is supplied. This move is expected to improve the financial health of distribution companies. This in turn is expected to reduce the revenue receivable cycle for solar power producers directly improving the credit rating of projects and consequently optimizing the cost of borrowing of the projects.
