The Ministry of New and Renewable Energy (MNRE), India, is awaiting Cabinet approval to invite bids for 750 megawatts of solar photovoltaic capacity.
As soon as the Ministry gets the approval, it may announce the auction.
The auction is expected to be announced in the next 10 days, said Tarun Kapoor, joint secretary, MNRE, in an interview.
The ministry is seeking approval to disburse the grant, which will cover as much as 30 percent of project costs, Kapoor said.
India began auctioning licenses through its Jawaharlal Nehru National Solar Mission (JNNSM) in 2010.
Under Phase I of JNNSM, grid connected projects of total capacity of 1047.16 MW have already been commissioned. Under off-grid scheme, 160.8 MW of photo-voltaic based systems have been sanctioned and 6.07 million square meter of collector area of solar water heating has been installed.
The Government of India is planning to introduce Viability Gap Funding (VGF) for grid connected solar power projects for the second phase of JNNSM.
For bids, currently the government is offering 25 million rupees per megawatt to projects that will range in capacity from 10 megawatts to 50 megawatts.
Developers will submit bids specifying the amount of funds they are seeking, and those needing the least will win.
The Ministry would also have to obtain approval from the election commission, should the Cabinet fail to clear the auction before state assembly elections are announced in New Delhi, Kapoor said. This may cause further delay in the process and bidding would be announced by December at the latest.
Five states, including the national capital territory of New Delhi, will go to the polls by the end of the year, according to the National Election Commission of India.