While the subsidy will be 100% in the first year, the government will discount the subsidy by way of a year-on-year reduction for the term of the project in a way that it will come down to 12% in the 10th year.With the Union Cabinet approving production-linked incentive (PLI) scheme for advance chemistry cell (ACC) battery manufacturing on Wednesday along with nine other sectors, the Niti Aayog has floated draft model bid documents for setting up ACC units for which the government will offer a subsidy of maximum 20% of the sale price of the ACC or cumulative subsidy not exceeding Rs 1,420 crore per GWh (giga watt hours) to the beneficiary firm during the term of the agreement.
While the subsidy will be 100% in the first year, the government will discount the subsidy by way of a year-on-year reduction for the term of the project in a way that it will come down to 12% in the 10th year.
“ACC battery manufacturing represents one of the largest economic opportunities of the twenty-first century for several global growth sectors, such as consumer electronics, electric vehicles and renewable energy. The PLI scheme for ACC battery will incentivise large domestic and international players in establishing a competitive ACC battery set-up in the country,” Niti Aayog CEO Amitabh Kant said.
The subsidy support will be limited to a cumulative 50 GWh of ACC manufacturing capacity in India, with a single beneficiary not allowed more than 20 GWh cell manufacturing facility. Furthermore, to encourage economies of scale, minimum bid may be restricted to 5 GWh capacity, which may be developed in phases over a five-year window, Niti Aayog said.
This umbrella-level initiative proposes various fiscal incentives through a single-window mechanism to make domestic ACC manufacturing industry globally competitive. In addition, the programme also proposes a composite framework for imposition of suitable basic custom duty with the intent to promote phased manufacturing of ACCs and its components in India and makes recommendations for promoting the overall market demand for ACCs in India, it said.
Niti Aayog has sought stakeholders’ comments on draft documents, including the request for proposal (RFP), before December 14, 2020. The government think-tank is facilitating the government to carry out a bidding process and seeks bids as response to this RFP from individuals, LLPs, funds, private entities, public entities or other international entities.
The beneficiary firm will have to establish a project to manufacture ACC battery as quoted by the selected bidder in its technical bid and make an investment of minimum `225 crore per GWh (excluding the cost of land) within two years from the appointed date. It has also to ensure value addition to be at least 25% at the mother unit level and minimum 60% of the overall domestic value addition.
“State governments shall also extend support and provide additional incentives for implementation of the project, through the execution of a tripartite agreement between the SPV, state government and the government (Centre),” the Niti Aayog said in the document.
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