GERC Rejects Extension For 4 MW Solar Project, Upholds PPA Termination And Bank Guarantee Encashment

The Gujarat Electricity Regulatory Commission (GERC) has rejected a petition filed by Sahaj Solar Limited seeking an extension to commission its 4 MW solar power project at Village Morambli in Kheda district, Gujarat. The company had requested additional time to complete the project, citing financial challenges, delays in procuring solar photovoltaic (SPV) modules and disruptions in global supply chains caused by the conflict in West Asia. However, the Commission ruled that the company had failed to establish sufficient grounds for extending the project timeline under the force majeure provisions of its Power Purchase Agreement (PPA).

Sahaj Solar had signed a PPA with Madhya Gujarat Vij Company Limited (MGVCL) on March 25, 2025. The agreement specified January 17, 2026, as the Scheduled Commencement of Supply Date (SCSD) for the 4 MW project. However, the developer failed to commission the project within the agreed timeline and subsequently approached GERC seeking a 12-month extension.

During the proceedings, Sahaj Solar primarily relied on supply chain disruptions arising from the West Asia conflict. The company invoked Article 8 of the PPA, which covers force majeure events, including acts of war. It also referred to an Office Memorandum issued by the Ministry of Finance on April 29, 2026, which addressed certain contractual delays arising from geopolitical developments.

The petitioner later limited its request to a six-month extension and offered to forgo its encashed performance bank guarantee of ₹40 lakh. The company argued that external circumstances had affected its ability to procure the required solar modules and complete the project.

MGVCL and Gujarat Energy Transmission Corporation Limited (GETCO) opposed the petition. They argued that Sahaj Solar had failed to issue mandatory force majeure notices within 15 days, as required under the PPA. The respondents also highlighted that the developer had placed purchase orders only in late December 2025 and January 2026, shortly before the scheduled commissioning deadline. According to them, these delays indicated shortcomings in project planning rather than disruptions caused by the West Asia conflict.

After examining the submissions, GERC observed that Sahaj Solar had not demonstrated a direct and unavoidable connection between the regional conflict and the specific delays affecting the project. The Commission also clarified that the Ministry of Finance’s April 29, 2026, memorandum applied only to contractual obligations falling due on or after February 28, 2026, provided the concerned entities were not already in default by February 27, 2026.

Since Sahaj Solar’s commissioning deadline had expired on January 17, 2026, its default had already occurred before the specified period.

The Commission further observed that supplier defaults and material shortages were excluded from the contractual definition of force majeure. Accordingly, GERC dismissed Petition No. 2689 of 2026 and the associated applications.

Following the decision, MGVCL’s actions concerning PPA termination, encashment of the performance bank guarantee and cancellation of grid connectivity were upheld.