The Hindu Business Line : Corporates line up Rs 80,000-cr solar, semiconductor projects

Flooded by nearly a dozen proposals together worth Rs 80,000 crore from corporate majors such as Reliance Industries, Videocon and Tata BP Solar under the policy for semiconductor fabs and eco-system units, the Government is setting in motion an appraisal mechanism to evaluate the projects.

As a first step, it is setting up an expert committee for technical evaluation of projects to assist the appraisal committee.

The committee is likely to hold its first meeting by August-end or early-September.

According to a senior official, the technical committee would comprise 4-5 experts in latest technologies for solar photovoltaic and semiconductor wafer fabrication.

The Special Incentive Package Scheme (SIPS) – notified last year to encourage investment in semiconductor fabrication and other micro and nano technology manufacturing industries – lays emphasis on modern technology and hence inputs from experts would be critical in the evaluation of projects.

Burgeoning investments

Given the high level of investments involved, companies that have thrown their hats in the ring are also taking time to evaluate the technology options available to them.

So far, the Government has received 11 proposals for incentives under SIPS.

While Videocon Industries is setting up an LCD fab (Rs 8,000 crore), Reliance Industries is planning a semiconductor wafer fab (Rs 18,521 crore).

Another nine proposals pertain to the fast-growing solar photovoltaic space.

These include Moser Baer PV Technologies (Rs 6,000 crore), Titan Energy Systems (Rs 5,880 crore), KSK Energy Ventures (Rs 3,211 crore), Signet Solar (Rs 9,672 crore), Reliance Industries (Rs 11,631 crore), Phoenix Solar India (Rs 1,200 crore), Tata BP Solar India (Rs 1,693 crore), Solar Semiconductor (Rs 11,821 crore), and TF Solar Power (Rs 2,348 crore).

Sops Offered

Under SIPS, the Centre would provide an incentive of 20 per cent of capital expenditure during the first 10 years for the units in Special Economic Zones and 25 per cent of the capital expenditure in non-SEZ units.

Any unit can claim incentives in the form of capital subsidy or equity participation.

The non-SEZ units would be exempt from countervailing duty (CVD).

Financial appraisal

“A Project Management Unit (PMU) will focus on the financial appraisal and look at issues such as financial closure of the project, debt, equity structure and funding pattern.

“We are in the process of roping in a global consultancy firm to assist the PMU. The technical and financial groups are expected to be in place in the next 7-10 days,” sources pointed out.

The appraisal committee, which is headed by the Additional Secretary, Department of IT, would give its recommendations to the Government on the proposals.

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