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The Ministry of Power (“MoP”) vide Office Memorandum dated 06.04.2026 (“OM”)1 has introduced Insurance Security Bonds (“ISB”) as an alternative to bank guarantees/bid security across all power procurement frameworks.
MoP through OM has amended Rules 170(i) and 171(i) of the General Financial Rules, 2017 (“GFR 2017”) which pertains to bid security and performance security respectively to include ISBs in the standard bidding guidelines for renewable energy projects (solar, wind, hybrid, FDRE), pumped storage projects, and transmission projects as a bid and performance security instrument.
MoP has accordingly advised all States/Union Territories and procuring utilities to incorporate provisions for acceptance of ISBs permitted under the GFR 2017, as valid instruments for bid security and performance security in their respective bidding documents, including those for long-term, medium-term and short-term power procurement, as well as Battery Energy Storage Systems (“BESS”).
Footnote
1. MoP introduces Insurance Security Bonds as alternative to bank guarantee/bid security
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