CII Communique - October, 2010

energysectoral synergiesFinancing of Solar Power ProjectsTHE SUCCESSof the JawaharlalNehru National SolarMission, launched bythe Government ofIndia, requires theactive participationof the financingcommunity topackage the financingdeals innovatively inorder to managerisks for the investorsand secure financing at a competitive rate.CII, in partnership with the Ministry of New & RenewableEnergy, the Ministry of Power and the Indian RenewableEnergy Development Agency (IREDA), organized aRound Table on ‘Financing Issues relating to SolarProjects in India’ on 21 September in New Delhi.Mr Devender Singh, Joint Secretary, Power, highlightedthe key features of the Jawaharlal Nehru National SolarMission (JNNSM) and encouraged bankers to play akey role in achieving the solar power goals set out bythe Government.Mr A K Goyal, Chief Executive Officer, NTPC VidyutVyapar Nigam, (NVVN) made a presentation on PowerPurchase Agreements (PPA) and Power Sales Agreements(PSA) for the sale ofbundled power fromsolar PV and solarthermal projectsunder JNNSM.Mr DebashishMajumdar, Chairman& Managing Director,IREDA; Mr MukulModi, Vice President,SBI Capital MarketsLtd; Mr Ajay Gupta,General Manager(Project Finance), ICICI Bank Ltd; Mr James Abraham,Chief Executive Officer, Sunborne Energy; Dr J M Phatak,Chairman & Managing Director, Rural ElectrificationCorporation; and Mr Rajeev Sharma, Director (Projects),Power Finance Corporation, participated in a paneldiscussion.Devender Singh, Jt Secretary, Power; Dr J M Phatak, CMD, REC; Gauri Singh,Jt Secretary, New & Renewable Energy; and Debashish Majumdar, CMD, IREDAThey discussed key issues such as fine–tuning thepayment security mechanism, technology evaluationand the need for project developers to work closely withbankers for project evaluation and due diligence.Ms Gauri Singh, Joint Secretary, New and RenewableEnergy, said the Government is aware of industry’srequest for budgetary support and is evaluating a fewproposals.Tax Issues in the Hydrocarbon SectorCURRENTLY, THE HYDROCARBON Industry in Indiais facing several tax-related concerns which need tobe addressed on an urgent basis, to make the Oiland Gas Sector in India truly globally competitive.The inclusion of petroleum products under the GSTambit, and the issues related to Indirect/ Direct Taxare key concerns.CII organized an interaction with Mr Ashok Chawla,Finance Secretary, Government of India, for membersof the CII National Committee on Hydrocarbons on 27September in New Delhi. The members made a requestfor bringing in all petroleum products under the GSTambit, so that they can avail of inputtax credit on them. The CII memberspointed out that if these products arekept out of the scope of GST, the oilcompanies would incur huge losses.CII also made recommendations on issues relatedto Service Tax on input services rendered by Oil andGas field services and exploration and productioncompanies which are generally liable to service tax, andthe taxability of call money received by lead operatorswhen commencing operations at the respective oil orgas block.Communiqué October 2010 | 31