On February 20, 2026, the Securities and Exchange Board of India (SEBI) issued an interpretive letter under the Informal Guidance Scheme, 2003, confirming that renewable energy (RE) projects awarded by public sector entities through tariff-based competitive bidding (TBCB) or Memorandum of Understanding (MoU) based awards meet the Public Private Partnership (PPP) criteria for Infrastructure Investment Trusts (InvITs). The guidance was issued to Sustainable Energy Infra Investment Managers Private Limited, the investment manager of Sustainable Energy Infra Trust (SEIT), which holds 100% equity in six initial portfolio companies. Per the applicant’s request, SEBI granted a 90-day confidentiality period from the date of issuance before making the guidance public.
The regulatory classification is anchored in Regulation 2(1)(zm) of the SEBI (Infrastructure Investment Trusts) Regulations, 2014, which defines a PPP project. SEBI substantiated the infrastructure status of these assets by referencing Serial No. 2 of the Updated Harmonized Master List of Infrastructure Sub-sectors, notified by the Ministry of Finance on September 19, 2025. This list includes electricity generation, transmission, and distribution. Accordingly, renewable energy generation projects are recognized as “infrastructure projects” under Regulations 2(1)(t) and 2(1)(u) of the InvIT Regulations.
The project awarding process involves designated Nodal Agencies or Renewable Energy Implementation Agencies (REIAs), such as SECI, NTPC, NHPC, SJVN, and state-owned power distribution companies. These public sector entities serve as the Offtakers in the Power Purchase Agreement (PPA), which is the central document governing the relationship with the private Special Purpose Vehicle (SPV). The PPA typically carries a 25-year term and serves as the primary mechanism for risk allocation. SEBI clarified that these agreements provide comprehensive terms for scheduling and dispatch, billing and payment mechanisms, change-in-law protections, force majeure, and dispute resolution.
The regulator stated that the use of a TBCB process fulfills the requirement for selecting a private SPV concessionaire through open competitive bidding. By entering into these arrangements, the private SPV—acting as the concessionaire—undertakes the development, ownership, and operation of generation stations to supply electricity for ultimate consumption by retail users. SEBI emphasized that because the InvIT Regulations are self-contained regarding PPP projects, all qualifying renewable energy assets must conform to these specific regulatory requirements.
Technical Compliance Framework
- Selection Criteria: To qualify as a PPP project under the InvIT framework, the private SPV must be selected by a public sector or government entity through open competitive bidding or on the basis of a government-sanctioned MoU.
- Entity Structure: The arrangement must establish a clear relationship between a “concessioning authority”—defined in Regulation 2(1)(k) as a public sector concessioning authority in PPP projects—and a private SPV concessionaire held as a portfolio company under the InvIT.
- Performance Standards: SPVs are contractually obligated to supply a minimum guaranteed generation from the respective RE projects during each contract year for the duration of the PPA. Failure to meet these annually benchmarked standards results in pre-determined contractual penalties.
- Infrastructure Mapping: Projects must align with the Ministry of Finance’s Updated Harmonized Master List (dated September 19, 2025), specifically Serial No. 2 regarding the generation, transmission, and distribution of electricity, to satisfy Regulation 2(1)(t) and 2(1)(u).
- Regulatory Compliance: All projects classified as PPPs must conform to the self-contained requirements of the SEBI (Infrastructure Investment Trusts) Regulations, 2014, and any subsequent circulars administered by the Board.
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