Introduction of Insurance Surety Bonds (ISBS) as an Alternative to Bank Guarantee/Bid Security across all Power Procurement Frameworks

No.23/17/2013-R&R (Vol-VI)-Part(4) Government of India Ministry of Power Shram Shakti Bhawan, Rafi Marg New Delhi, +4 April, 2026 OFFICE MEMORANDUM Sub: Introduction of Insurance Surety Bonds (ISBs) as an Alternative to Bank Guarantees/Bid Security across all Power Procurement Frameworks-— Reg. In line with the Ministry of Finance’s amendment to Rules 170(i) and 171(i) of the GFR, 2017 (OM dated 02.02.2022), it is informed that Insurance Surety Bonds (ISBs) are recognized as an acceptable alternative to Bank Guarantees (BGs) for Bid Security and Performance Security (copy enclosed). 2. Ministry of Power has already incorporated provisions for Insurance Surety Bonds (ISBs) in the Standard Bidding Guidelines for Renewable Energy projects (Solar, Wind, Hybrid, FDRE), Pumped Storage Projects, and Transmission projects. ISBs provide financial security equivalent to Bank Guarantees, while significantly reducing the credit exposure and liquidity constraints. 3: In view of the above, all States/UTs and procuring utilities are advised to suitably incorporate provisions for acceptance of ISBs, or any other instruments permitted under the General Financial Rules (as amended from time to time), 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). This will ensure policy consistency across segments, improve ease of doing business, and facilitate wider and more competitive participation in the power sector. Encl: As above Yours faithfully, ° "An Waa Wn Mew t/t) vb (Manish Mishra) Director Tel: 2373 0265 1. Principal Secretaries/Secretaries (Power/Energy) of all State Governments/UTs 2. CMDs/MDs of Discoms/Gencos of all State Governments 3. Secretaries of All State Electricity Regulatory Commissions/JERCs. Copy to 1. The Chairperson, CEA, New Delhi 2. Secretary, CERC, New Delhi Copy for information to: Sr. PPS to Secy (P), Sr. PPS to AS (R&R), Sr.PPS to JS(Thermal), PSO to CE (R&R), Ministry of Power.No.F. 1/1/2022-PPp Government of India Ministry of Finance Department of Expenditure Procurement Policy Division 264-C, North Block, New Delhi. 2" February, 2022. OFFICE MEMORANDUM Subject: IA nm se un rd anm ce en St u rt eo t y G Be on ne dr sa l a sF i Sn ea cn uc ri ia tl y IR nu sl te rs u me( nG tF .R),- 2017 to include ° rF ei sn pa en cc ti iaI vt l e h la yR ’s u l ab e se s e un n( d Gd eF re R :c )i ,de 2d 0t 1o 7p ar rt ei ga al rly d ia nm ge n ‘Bd i dR u Sl ee c u1 r7 i0 t( yi ) aa nn dd PR eu rle f o1 r7 m1 a(i n) c eo f SG ee cn ue rr ia tyl Rule/ | Existing provision Amended Rule Para 170(i) | soCGB t DT anour ah l fh a mn ae i efe k mr nt gf e e ea, ub o r rni ar 'd ct rm s e i di s F n ie aoe i n f lc x g u A e r aCdci nf c ht B ry o ae o u tnq mm aD hn k ua ce et se cp y eo P a psb a n ti oe y y at r p e b oa ue lr rc e cpc o D R he afe aep y c sft m me B eoe ia ea rrd tp 'nn mn h t s,tki d e,n ! | tiCBA DtT n hoec a h eh mpe c n ae o mo k nf s eu ob i prnri at ucGtd m c riu cR caas o P e e he f lrca p ac ae tyI su i Bn a enr e p at b ri s e tt le 'nu , y see k r D sa Bm e f n a f oa m onc irr ry a ke nmo e t n ,pm eS rb d a r'ue S ey sr a sam De ta n fr eC tc ea y nhy fc g t te e u, iB ap q o n oo f rt u nF n de e li idd itx an s nhe lo gi lee, d rn interest in all respects. | respects. 171(i) | f P ure nr if so hr em da n inc e t he S fe oc ru mr i ot fy an“ m Aa cy c ounb te fP ue rr nf io sr hem da nc ine theS e fcu or ri mt y o f Im na sy u rancb ee Payee Demand Draft, Fixed Deposit Surety Bonds, Account Payee Receipt from a Commercial bank, Demand Draft, Fixed Deposit Receipt bB aa nn kk G ou ra ra on nt lie ne e fr po am ya m C eo nm tm e ir nc ia anl Gfr uo am r anta e e C fo rm omm e ar c Ci oa ml m ercba in ak l, banB ka n ok r acceptable form Safeguarding the online payment in an acceptable form purchaser’s interest in all respects Safeguarding the purchaser’s interest in all respects 2. This OM is also available on website of Department of Expenditure: ow fw w th. id so Oe. Mg o wv il. li fn o l- l> o wN .otification -> Circular --> Procurement Policy OM. Hindi version ae vy Kanwalpreet Director (Procurement Policy) Tel.: 23093811 To Email: kanwal.irss@gov.in Secretaries to All Central Government Ministries/ Departments