The Central Electrical energy Regulatory Fee (CERC) has refused to grant compensation to Reliance Power in opposition to the unexpected rise in overseas alternate charges which has significantly elevated the debt servicing obligations for the corporate’s 4,000 mega-watt (MW) Sasan energy plant.
The corporate claimed that resulting from depreciation of the Indian Rupee, the Sasan plant’s US dollar-denominated debt service obligation over the compensation interval can be about Rs 11,392 crore, in opposition to Rs 6,516 crore estimated in 2007 when the corporate had submitted the bid for the undertaking.
In 2014, the regulator had already held that the depreciation of the rupee isn’t a drive majeure occasion. The most recent petition relied on the Supreme Courtroom’s April 2017 order, which had prolonged a lifeline to a few troubled imported-coal-based energy crops of Tata, Adani and Essar in Gujarat by permitting CERC to revise tariffs to facilitate pass-through of future gasoline value escalation. The apex court docket had mentioned CERC can enable tariff revisions “in a scenario the place there are not any tips framed in any respect or the place the rules don’t take care of a given scenario”.
The alternate price in July 2007 was Rs 40.27 per US greenback and the depreciation price was estimated at 0.74% each year. The rupee has depreciated by about 5% each year since then. Reliance Energy additionally added that its claims need to be thought-about preserving public curiosity in thoughts for the reason that plant’s levelised tariff of Rs 1.2/unit is the most affordable thermal energy within the nation. The plant provided energy to Uttar Pradesh, Madhya Pradesh, Delhi, Rajasthan, Haryana, Punjab and Uttarakhand.
CERC mentioned the bidding tips had insulated the discoms’ shopping for energy from the plant from any overseas alternate danger and the bidder is anticipated to consider all attainable expenditures, together with the impression of overseas alternate price variations, whereas quoting the tariff at which they are going to promote energy.
Aside from borrowing Rs 11,612 crore for the Sasan undertaking from banks and monetary establishments, Reliance Energy had entered a overseas forex facility settlement with India Infrastructure Finance Firm (UK) and State Bank of India for $486 million, credit score settlement with Deutsche Financial institution Belief Firm Americas and Export-Import Financial institution of the US for a restrict of $650 million, facility settlement with the Export-Import Financial institution of China, China Improvement Financial institution, Financial institution of China and Normal Chartered Financial institution for mortgage of $1,109 billion, and a credit score settlement with Normal Chartered Financial institution, Mizuho Company Financial institution and DBS Financial institution for a credit score restrict of $150 million.