CERC Approves Refinancing For Rajgarh Transmission’s 2500 MW Renewable Energy Project In Madhya Pradesh

Rajgarh Transmission Limited approached the Central Electricity Regulatory Commission for approval to substitute its existing lender, Standard Chartered Bank, with Indian Bank for financing its transmission project in Madhya Pradesh. This project, involving the evacuation of 2,500 MW of renewable energy, had an estimated cost of ₹430.6 crore. Financing was planned with ₹315.4 crore in debt and ₹115.2 crore in equity from the sponsor.

The substitution was proposed due to the Indian Bank’s agreement to refinance the project with a new loan facility of ₹315.4 crore. This move followed the earlier approval granted by CERC in March 2023 for security creation in favor of Vardhman Trusteeship Private Limited as a security trustee for the project. Subsequently, Standard Chartered Bank confirmed the settlement of its earlier loan and provided a no-dues certificate.

The petitioner highlighted compliance with Section 17 of the Electricity Act, 2003, which mandates regulatory approval for such financial arrangements. The proposal included creating a security interest on project assets through hypothecation, mortgage, and other relevant measures to secure the new loan. The petitioner also entered into a subordination agreement with the sponsor, ensuring compliance with the terms of the financing arrangement.

CERC approved the substitution of Indian Bank as the new lender, emphasizing the importance of maintaining financial security in capital-intensive projects. The commission noted that all agreements related to license transfer or asset security require prior approval to ensure compliance and operational continuity. The commission also reiterated that, in case of loan defaults, lenders could apply for license reassignment following due diligence to ensure the nominee’s expertise in managing the project.

The petition was disposed of with instructions to the petitioner to provide financial statements and documents as required, ensuring transparency and regulatory oversight.