Under the Government of India’s performance-linked incentive (PLI) program, Bharat Heavy Electricals (BHEL) has requested bids for a gigawatt-scale advanced chemistry cell battery storage facility through a special purpose vehicle (SPV).

Bids must be sent by November 2, 2021, to be considered.

The Indian government’s Department of Heavy Industry (DHI) announced a ‘National program on Advanced Chemical Cell (ACC) battery storage’ to set up ACC manufacturing facilities for electric vehicles (EV).

The overall five-year incentive payout for the scheme is 181 billion dollars ($2.47 billion). The national government approved the PLI program in ten important industries in November 2020 as part of the Atmanirbhar Bharat project, which aims to improve India’s manufacturing capacity and exports.

BHEL plans to submit a bid for a capacity of at least 5 GWh. However, in conjunction with selected consortium partners, the exact manufacturing capacity for bidding will be decided. A maximum of three participants may form the proposed SPV firm (including BHEL).

An SPV will be constituted under the Indian Companies Act, 2013 if the consortium wins the bidding and is granted the project. Within 60 days of receiving the letter of award, the SPV will engage in a tripartite agreement with the federal and state governments to receive extra incentives.

The proposed SPV company must be capable of designing, engineering, manufacturing, testing, supplying, and providing after-sales ACC services. Before bidding, the terms and conditions of the joint bidding agreement will be addressed and completed.

The production facility and the ACC must comply with national or international quality and testing requirements. The SPV company’s cells or battery packs must be cost-competitive by market standards.

SPV’s plant will serve the Indian and global markets in e-mobility, grid energy storage, telecom, and consumer electronics, among other areas. In addition, the SPV company will engage in marketing and business development efforts in all of the aforementioned areas, as well as exploring additional potential segments.

The interested parties can apply against any or both categories below:

Category I: Technology Partner – companies with technology to design or engineer, manufacture, test, assemble and service ACC.

Category II: Off-take partner- consumer of ACC or batteries, which are EV manufacturers, battery energy storage system (BESS) developers, telecom operators, consumer electronics manufacturers, and power sector companies, among others.

The respondent may be a private entity, public sector undertaking, or a consortium of Category-I and Category-II entities.

Category-I (Technology and investment partner)

BHEL is looking for firms that have the technology for R&D, design or engineering, manufacturing, testing, and disposal of ACC and are willing to invest and create an SPV with BHEL to enter the ACC manufacturing business under the PLI program.

The SPV firm will have a minimum ownership stake of 25% for potential partners. The potential SPV partner must be familiar with the setup and operation of a GWh-scale ACC manufacturing facility.

At the time of EoI bid submission, the bidder must ensure committed equity participation and produce documents supporting at least 50 percent funding, either on its own or through a soft commitment from their investor or lender.

As of October 12, 2021, the potential partner must have manufactured and provided a minimum of 1 MWh of ACC, matching the PLI program’s energy density and cycle requirements.

Category II (Off-take cum investment partner)

BHEL is looking for comments from EV manufacturers, BESS, battery swapping station aggregators, and developers of battery grid storage projects, among others, who are off-takers of ACC or batteries.

Off-take cum investment partners are expected to make a minimum equity commitment of 25%. A prospective partner who is willing to invest more in the SPV company would be chosen.

In fiscal year (FY) 2020-21, the potential partner must have a minimum turnover of $2 billion and a net value of $2 billion.

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