CERC Orders SECI To Reimburse Additional Project Cost To Azure Power’s Subsidiary

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As per a directive from the Central Regulatory Commission (CERC), the expenditures of the new post as well as additional expenses incurred by the company as a result of the application of the safeguard obligation must be reimbursed by Solar Energy Corporation of India (SECI) to Azure Power FortyOne, a subsidiary of Azure Power India.

In addition, the Commission has requested that the connected distribution companies (DISCOMs) pay SECI. 

However, the payment made by SECI to Azure Power will not be impacted by the timing or amount of the DISCOMs’ payment.

For the purpose of establishing a 300 MW solar photovoltaic power plant in several villages, a PPA was signed between Azure Power, SECI, and Madhya Pradesh Power Management Company.

The imposition of the safeguard duty caused the project cost for Azure to skyrocket.

Notably, the import of solar cells, whether integrated into modules or panels or not, was subject to a safeguard duty by the Central Government. For imports made between July 30 and July 29, 2018, this was set at 25%, plus or less any applicable anti-dumping duties.