Stating this at the third Indian Oil and Gas Conference organised by TERI, additional secretary, petroleum ministry, Devi Dayal said a number of IPPs are reportedly at an advanced stage of achieving financial closure, which shows that the new FSA is quite bankable and the financial institutions are ready to fund the power projects.

"The reasons for many of the IPPs not yet achieving financial closure do not relate to the FSA but to issues like availability/operation of the escrow accounts along with other clauses in the power purchase agreements with the state electricity boards",he said.

Giving details on the modified provisions in the FSA, Devi Dayal said that earlier the IPPs were asked to pay Rs 5 lakh per MW of the payable commitment charge and the balance through a bank guarantee. However, a provision has been made in the FSA to accept applicable commitment charge in the form of bank guarantee.

Moreover, the originally contemplated service charge of 3.75 per cent and 3.5 per cent of the landed cost payable by IPPs for the supply of naphtha and fuel oil respectively have been scaled down to 3 per cent and 2.75 per cent respectively.

Devi Dayal said that the infrastructure charge payable by IPPs has also been revised downwards to Rs 437 per MT from Rs 608 per MT and the guarantee charge has been revised to 4 per cent instead of 5 per cent for achieving 68.5 per cent PLF.

Similarly for achieving 75 per cent PLF, guarantee charge has been revised to 4.5 per cent instead of 6 per cent and for 80 per cent PLF, the same has been reduced to 5 per cent from the earlier 7 percent.

He said that the available infrastructure of the national oil companies is already committed to the existing as well as prospective customers to whom the petroleum ministry has issued allocation of liquid fuels.