ACME Solar projects in Rajasthan back on track after withdrawal of termination notice
Strong points :
- The settlement of the litigation on one of the most visible projects due to its then record low prices, is a good sign.
- For ACME solar, the regulation marks a new stage in the return to pioneer status as a developer.
- The flexibility of SECI is to be welcomed, as the end result must be a successful real capacity building.
ACME Solar, which had requested the termination of some of its solar projects in Rajasthan, withdrew the notice of termination, following an amicable settlement of the dispute with SECI (Solar energy Corporation of India). This was informed by the company of the Central Electricity Regulatory Commission (CERC), where it had filed the termination request.
The advocacy had created a float, thanks to the high visibility of these projects as the lowest solar offers when they were won in 2018, at Rs 2.44 per unit. Since then, however, the developer has had to deal with a wave of issues, from SGD, to land issues and of course covid. Finally, the threat of collection of bank guarantees due to the delays forced him to demand the termination and return of his deposits. .
The game changer possible here for ACME has been its agreement with Scatec Solar, which has agreed to involve it in the financing and implementation of these projects.
The plea was filed by ACME Deoghar Solar Power Pvt. Ltd. and ACME Dhaulpur Powertech Pvt. Ltd., special purpose vehicles incorporated by ACME Solar which were developing / developing 600 MW (300 Ã 2 MW) solar power projects at Tehsil Pokhran in the state of Rajasthan.
The said petition was admitted on 14.5.2020 when the commission ordered the defendants, SECI and PGCIL (Power Grid Corporation of India Limited), not to take any coercive action against the plaintiffs until the next hearing date and the plaintiffs. were asked to keep the comfort letter and the bank guarantee are valid.
Subsequently, SECI authorized the extension of the Project Completion Date and Scheduled Start Date (SCOD) to 3.3.2022, which ACME solar has accepted for now and also confirmed the same. . However, with PGCIL limiting the extension of LTA (Long Term Transmission Agreement) until March 26, 2021 or the entry into service of ISTS for LTA, whichever is later, ACME has filed a petition for, between others, request a declaration that it is not required to pay the transmission charges / losses due to the extension of SCOD by SECI due to a case of force majeure for delay in the start date of the LTA. This petition is still ongoing.
In what ultimately seems like a happy ending for ACME, one has to wonder how much of the new flexibility is due to the company’s recent fundraising. The company has announced three financing agreements, from Scatec Solar to UNOPS3i and of course through Brookfield.