Cabinet Approves Rs 3,760 Crore Viability Gap Funding To Promote Battery Storage Systems

The Cabinet also approved Rs 1,164 crore as additional funds required for Himachal Pradesh and Uttarakhand under the Industrial Development Scheme, 2017

Information and Broadcasting Minister Anurag Thakur said the viability gap funding will lead to an investment of Rs 9,500 crore.

Source : PTI

The Union Cabinet on Wednesday approved a Rs 3,760 crore viability gap funding (VGF) for setting up battery energy storage systems (BESS) in the country, said Information and Broadcasting Minister Anurag Thakur. The entire Rs 3,760 crore viability gap funding will be borne by the central government, the minister said while briefing media about the Cabinet decisions.

As the country aims to meet its 50 per cent of energy requirements through renewable energy and non-fossil energy sources, the fund will be released in five tranches till 2030-31 and help in creation of 4,000 MW hours storage. Thakur said, the viability gap funding will lead to an investment of Rs 9,500 crore.

The VGF will be a 100 per cent grant from the Centre which will be given out in five tranches util 2030-31. A total of Rs 9,500 crore investment is expected in the battery energy storage sector. The VGF for a BESS will be capped at 40 percent of the capital cost of the project, Union minister for information and broadcasting Anurag Thakur said in a press briefing after the Cabinet meeting.

The Cabinet also approved Rs 1,164 crore as additional funds required for Himachal Pradesh and Uttarakhand under the Industrial Development Scheme, 2017.

The additional fund was required to meet the committed liabilities under the scheme up to 2028-29. Under this scheme, the total financial outlay was Rs 131.90 crore, Union Minister Anurag Thakur said.

The decision in this regard was taken in the meeting of Union Cabinet, chaired by Prime Minister Narendra Modi. The cabinet has approved the central sector industrial development scheme 2017 (IDS, 2017) for Himachal Pradesh and Uttarakhand for additional fund requirement to meet the committed liabilities under the scheme up to 2028-29. The requirement of an additional fund to meet the committed liabilities up to 2028-2029 is Rs 1,164.53 crore.

Thakur said that 774 units were registered under the scheme and the additional fund will go to them. The government provides incentives under the scheme to companies for investment in these two states. The incentives include access to credit and insurance.