Ministry of Power launches insurance surety bonds as alternative to bank guarantees across power procurement frameworks

The Ministry of Power (MoP) has launched insurance surety bonds as an acceptable alternative to bank guarantees for bid security and performance security across power procurement frameworks. The provisions for insurance surety bonds have already been incorporated in the standard bidding guidelines for renewable energy, pumped storage and transmission projects and MoP has advised all states, union territories and procuring utilities to include them in their bidding documents for long-term, medium-term and short-term power procurement, as well as battery energy storage systems. The measure is expected to reduce credit exposure and liquidity constraints, improve ease of doing business and support wider participation in the power sector.