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Solar and wind energy companies are waiting for the government to clear subsidies amounting to more than INR 1,000 crore as they stare at potentially unviable projects which they had launched due to the promise of incentives. The ministry of new and renewable energy is unable to pay the promised subsidies since it has received just a third of its budgetary allocation of INR 1,521 crore for 2013-14, officials said, adding that to make matters worse, the allocation for the next fiscal has been reduced by as much as 71 Percent to INR 441 crore.

India offers generation-based incentives to wind energy projects and small solar projects of 100 kW to 2 mw to help them compete with conventional energy. "The delay in disbursement of incentives comes at a time when some developers are already facing delays from the state utilities in payments. This is impacting cash flow and the ability of developers to repay loans," Sumant Sinha, founder, chairman and chief executive of ReNew Power Ventures.

The government had last disbursed the incentives to wind energy companies in August 2013 for April-September 2012. The total backlog is at least INR 600 crore, developers said. The amount pending for solar energy companies is about INR 550 crore, ministry officials said.

Source-On Request