NTPC will not just invest in development of these UMSPs, but will also act as an enabler to invite investment from developers and investors who can also buy power from the projects if required. This is in deviation from the previous model where developers were not allowed to invest in solar parks.

“It is a recent phenomenon which just happened a month back and is still work in progress. I have found lot of interest in this project,” Singh said. “The plant is likely to cost around Rs 20,000 crore in debt and equity at a ratio of 70:30,” he said.

NTPC is of the view that the potential for UMSPs is huge with these couple of plants being the tip of an iceberg. “In a meeting with various public sector companies, we chose Gujarat and Rajasthan, while other PSUs will take up the remaining states in coming months,” Singh said.

NTPC is likely to sell around 60-70% of power produced on merchant sale basis and keep only around 30% on PPA basis to begin with, the company management told analysts in a meet. The UMSP comes after the not so successful launch of ultra mega power projects (UMPPs).

In 2006 government devised a plan to set up 36 UMPPs with a capacity of 4,000 MW each. The government awarded 4 UMPPs three to Reliance Power and one to Tata Power, however, only two — Tata Power’s Mundra UMPP and Sasan UMPP of Reliance Power — could see the light of the day due to various fuel supply and land acquisition related issues.

NTPC has a renewable energy portfolio of 5,941 MW as EPC projects, where 928 MW is installed capacity, 379 MW is under implementation, 2141 is under tendering and another 2510 MW is under planning stage, while it is a developer for 11,233 MW of renewable projects from which it buys power. Earlier in March, this year the government introduced new guidelines to ease the land acquisition and power evacuation infrastructure for solar parks which were auctioned by SECI.

Under the new guidelines, called Mode-7, SECI will make both government and private land available for successful bidders for setting up projects with the assistance of state government. The state government would be paid a facilitation charge of Rs 0.02 per unit of power being generated in these parks. However, the planned NTPC UMSPs will be set up by NTPC in association with other developers, hence the land acquisition and evacuation infrastructure will be developed by developers and NTPC themselves.