Private sector Indian companies with a net worth of more than ₹500 crore and a long-term credit rating of A and above can be designated as Renewable Energy Implementing Agencies (REIAs).
So far, four PSUs — NTPC, SJVN, Solar Energy Corporation of India (SECI) and NHPC — have been designated as REIAs.
A company shall be designated as REIA for a period of five years at a time, subject to termination by the Centre.
This is part of the guidelines released by the Ministry of Power for designating a company as REIA. It also paves the way for private sector companies, which are registered under the Companies Act, becoming eligible to apply for REIAs.
REIA is an intermediary procurer (IP), which as per the tariff based competitive bidding (TBCB) guidelines acts as a trader, aggregating power from Gencos and sells it to end procurers. For carrying out activities of an IP, the Centre designates certain entities as REIAs.
They are responsible for carrying out the RE project bidding process, signing back-to-back power sale agreements (PSAs) with RE developers and power purchase agreements (PPAs) with the Discoms/ consumers and ensuring payment security to RE developers.
Arindam Ghosh, Partner- Power Advisory at Nangia & Co, said while the expanded REIA framework holds promise by leveraging both public and private sector capabilities, it must be accompanied by firm regulatory oversight.
Safeguards should be in place to monitor trading margins, ensure risk-sharing mechanisms are fair, and enforce obligations aligned with national policy objectives. This will help strike the right balance between accelerating market development and safeguarding affordability, reliability, and equity in India’s energy transition, he added.
Trading licence
As per the guidelines released by the Ministry of Power earlier this month, an applicant entity should be an Indian company possessing a valid Category-l electricity trading licence as issued by the Central Electricity Regulatory Commission (CERC).
“The applicant company must demonstrate a net worth, comprising subscribed capital and reserves (excluding revaluation reserve), exceeding ₹500 crore, and long-term credit rating of A or above,” the Ministry said.
The applicant company shall have approval of its board of directors for designating the company as REIA, the guidelines said.
The designated REIA shall follow the procurement process as per the guidelines issued by the Centre under Section 63 of the Electricity Act 2003, as amended from time to time. Procurement by REIAs shall be exclusively through e-bidding platforms prescribed by the CERC.
“In a bidding process carried out by REIA, its own subsidiary or any other group company, shall not participate as bidder. lncase there is any change in ownership of the company designated as REIA, merger/demerger of company etc, the eligibility criteria shall always to be maintained after change in ownership, merger and/or demerge,” the Ministry said.
ln case of termination of designation of any company as REIA, the company shall remain responsible to discharge its duties towards the RE developers and procurers as per bidding.
Scaling up RE
Ghosh noted that REIA status for public and private entities is a significant step toward scaling India’s RE ambitions. Government-backed agencies such as SECI, NTPC-RE, NHPC, and SJVN have effectively led RE tenders, signed PPAs and facilitated interstate power supply—building market confidence and ensuring financial strength in procurement.
For instance, SECI alone traded over 35 billion units (BU) in FY23, a 59 per cent Y-o-Y increase, generating revenues of ₹10,000 crore. Expanding REIAs in this direction enhances procurement capacity and accelerates clean energy deployment
However, this shift is not without its challenges, Ghosh emphasised.
“A key area of contention is the trading margin, where REIAs typically charge ₹0.07 per kilowatt hour (kWh) to account for risks like payment defaults, legal uncertainties, and inflation,” he added.
While the CERC has asserted its jurisdiction over fixing interstate margins, several state regulators have pushed back, with some mandating lower margins—down to ₹0.02 per kWh—highlighting ongoing tensions between central and state authorities.
Moreover, the inclusion of private power trading companies as REIAs brings concerns about potential divergence from broader public interest objectives. While private participation may introduce innovation and competition, there is apprehension that profit motives could take precedence over goals such as rural electrification, tariff stability, and ensuring financial discipline.