A Madhya Pradesh government proposal for setting up of manufacturing zone for power and renewable energy equipment has received ‘in-principle’ approval.
In April this year, the Ministry of Power (MoP) and the Ministry of New and Renewable Energy (MNRE) had invited expressions of interest (EoI) from interested parties to set up manufacturing zones for power and Renewable Energy (RE) equipment.
Eight states – Andhra Pradesh, Bihar, Gujarat, Madhya Pradesh, Maharashtra, Odisha, Tamil Nadu, and Telangana — had submitted their proposals.
Madhya Pradesh Industrial Development Corporation (MPIDC) obtained the highest marks among the eight contenders and emerged as the successful bidder.
For Madhya Pradesh, the win comes at a crucial time when it has made rapid progress in terms of adding renewable capacity within the state as well as a strong pipeline for future growth too.
A manufacturing ecosystem will be a welcome addition in terms of jobs and related infrastructure, an area where Gujarat in recent months has been getting all the attention from industry.
The Madhya Pradesh Renewable Energy Policy 2022 has outlined an investment of Rs 40 billion by 2024 and Rs 100 billion by 2027 in RE equipment manufacturing.
The Scheme
The growth of Indian power sector in last decade has been impressive.
However, India is largely reliant on imports to meet its growing domestic demand of power and RE equipment and the trend is likely to continue unless domestic capacity is ramped up with suitable policy support.
The target of 450 GW of RE capacity offers a tremendous opportunity to create skilled jobs, bring about technology transfer, and contribute to the Make-in-India campaign, in addition to reducing the country’s trade deficit and reliance on imports.
To this end, MNRE and MoP have jointly launched a scheme for establishment of three ‘Manufacturing Zones’ in the country with a total financial outlay of Rs 1000 crore.
The current EoI pertains to setting up of a brownfield manufacturing zone on a pilot basis with an overall ceiling of Rs 400 crore as grant-in-aid from the central government.
Key Facilities
MPIDC will now need to set up a Special Purpose Vehicle (SPV) within a month of receiving in-principle approval.
The SPV will be responsible for creation of Common Infrastructure Facility (CIF) and Common Testing Facility (CIF) in the manufacturing zone.
The SPV will also appraise, approve, manage, monitor and facilitate the establishment of industries in the manufacturing zone.
The manufacturing zones will have the infrastructure for manufacturing solar energy components like Photo-Voltaic (PV) modules, inverters, silicon wafers, module mounting structures, and wind energy components like blades, hubs, shafts, and nacelles.
The units will also produce components for biomass, small hydro, and green hydrogen projects. They will also produce components for transmission and distribution infrastructure.
The grant-in-aid is set to be disbursed based on the schedule laid down in the offer document. The project’s duration is until Financial Year (FY) 2025-26.