Karnataka removes cap on green power tariff reimbursement to attract data centres

The state government has dropped the 5 MW cap for data entities to qualify for green power tariff reimbursement of up to Rs 1.25 crore.

In a bid to encourage data centre entities using renewable energy, Karnataka Cabinet on March 27 decided to remove the cap on green power tariff reimbursement.

The state government has dropped the 5 MW cap for data entities to qualify for green power tariff reimbursement of up to Rs 1.25 crore.

Speaking to reporters, law and parliamentary affairs minister HK Patil said, "We have decided to amend the Data Centre Policy, 2022-2027. The removal of 5 MW cap on green electricity tariff reimbursement aligns with the consumption patterns of large-scale data centres."

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Under the revised policy, data centre entities will receive a 100 percent exemption for five years from the date of issuance of an electricity tariff certificate by the Karnataka Innovation and Technology Society (KITS) under the Department of Electronics, Information Technology, Biotechnology, and Science and Technology. “This exemption will be applicable during the Electricity Tariff Policy period mentioned in the Data Centre Policy, 2022-2027,” said Patil.

Currently, data centre entities are eligible for green power tariff reimbursement up to 5 MW, capped at Rs 1.25 crore. Additionally, entities that use more than 50 percent renewable energy receive a reimbursement of Rs 0.50 surcharge per unit for five years.

The cabinet also approved a revised placement criterion and funding pattern under 'Nipuna Karnataka,' a skill-imparting initiative aimed at enhancing youth employability in industries.

“Following consultations with industry stakeholders, changes have been introduced to better align employment standards with industry recruitment cycles and improve participation,” said Patil.

Partnering companies must ensure that at least 70 percent of trained candidates, excluding those already employed, are recruited within eight months of course completion. If the recruitment percentage falls short, the partner organisation must conduct a refresher course at its own expense to improve hiring outcomes. At least 40 percent of trainees should be placed after this refresher course.

“The government will adopt an instalment-based grant model for better financial control and project monitoring. Under this model, 25 percent of the grant will be released upon proposal approval, 50 percent will be disbursed after recruiting 35 percent of the batch, and the remaining 25% will be provided upon the full recruitment of the remaining 35 percent of the batch within eight months” said Paril.

“If 70 percent recruitment is not achieved, the partner organisation must conduct a refresher course for non-recruited trainees at no additional cost. If placement still does not reach 40 percent, the organisation must repay the entire grant amount to the government,” said Patil.

Also, read: Nipuna Karnataka: State to partner with tech companies to train youth in emerging technology