CERC Sets Aside Connectivity Revocation In 400 MW Rajasthan Renewable Energy Project Dispute

The Central Electricity Regulatory Commission (CERC) has issued an order in a dispute between Prerak Greentech Solar Private Limited and the Central Transmission Utility of India Limited (CTUIL) over the development of a 400 MW renewable energy project in Rajasthan. The dispute mainly revolved around the issue of “Financial Closure” (FC), which is a mandatory requirement for developers to prove that they have secured adequate funds for completing their projects.

As per the existing regulations, renewable energy developers are required to achieve financial closure at least six months before the scheduled start date of connectivity. In the case of Prerak Greentech, the firm’s connectivity start date was fixed as February 28, 2026, making August 28, 2025, the deadline for submission of financial closure documents.

On the deadline date, the company submitted an “in-principle” sanction letter issued by Kotak Mahindra Bank as proof of financing arrangements. However, CTUIL later informed the developer that the document was not sufficient and that a final term loan sanction letter was required instead. According to the case details, CTUIL communicated this deficiency only on November 18, 2025, nearly three months after the original submission.

Following this communication, Prerak Greentech revised its financing plan and submitted fresh documents on November 27, 2025. These documents stated that the company would finance the project internally through its board and support from an affiliated entity. Despite this, CTUIL revoked the project’s connectivity approval on December 31, 2025, on the grounds that the revised financial closure documents had been submitted after the August 2025 deadline.

After revoking the connectivity, CTUIL also initiated the encashment of bank guarantees amounting to Rs. 11.5 crore. The developer deposited the amount under protest, stating that the payment was made to avoid any adverse impact on its credit profile and business reputation.

Prerak Greentech later approached the CERC and argued that CTUIL’s delay in reviewing the original submission was unreasonable. The company stated that the regulations do not clearly define the exact format or wording required for financial closure documents. It also argued that the firm connectivity start date itself was uncertain because the common transmission infrastructure linked to the project is expected to be completed only by September 2026.

In its order, the Commission upheld the February 2026 connectivity start date but observed that CTUIL had delayed the communication regarding deficiencies in the submitted documents. The Commission noted that if CTUIL had informed the developer within the generally accepted industry timeline of 15 days, the company would have had sufficient time to rectify the issue before the deadline.

As a result, CERC set aside the revocation of connectivity and directed CTUIL to re-examine the financial closure documents within 15 days. The Commission further stated that if the documents are found acceptable, the compensation amount payable for the delay should be adjusted from the Rs. 11.5 crore already deposited, and the remaining balance should be refunded to the developer.