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<p>Arina Solar Private Limited has filed a petition with the Central Electricity Regulatory Commission (<a href="http://www.cercind.gov.in/" target="_blank" rel="noopener noreferrer">CERC</a>) requesting it to direct the Solar Energy Corporation of India (<a href="https://www.seci.co.in/" target="_blank" rel="noopener noreferrer">SECI</a>) to return its performance bank guarantee (PBG) of ₹500 million (~$6.67 million).</p>
<p><strong>Case Background</strong></p>
<p>Arina Solar, a subsidiary of Shapoorji Pallonji and Company Pvt Ltd, had entered into a power purchase agreement (PPA) with SECI on November 22, 2018, for setting up a 250 MW solar power project.</p>
<p>However, the developer terminated the PPA on August 07, 2020, following the COVID-19 pandemic and the subsequent lockdown.</p>
<p>According to clause 4.5.3 of the PPA, if the <em>force majeure</em> event continues beyond three months, the petitioner is entitled to terminate the PPA.</p>
<p>In February, the <a href="https://finmin.nic.in/" target="_blank" rel="noopener noreferrer">Ministry of Finance</a> had <a href="https://mercomindia.com/coronavirus-covered-under-force-majeure-clause-ministry-of-finance/" target="_blank" rel="noopener noreferrer">announced</a> that coronavirus would be covered in the force majeure clause considering it as a case of natural calamity, and this clause can be invoked wherever appropriate.</p>
<p>Arina Solar, in its submission, said that since it had terminated the PPA, the PBG amount furnished by it to SECI must be returned.</p>
<p>In response to Arina Solar’s contention, SECI asked for some time to file the reply and said that the distribution licensee, the Jharkhand Bijli Vitran Nigam Limited (<a href="https://jbvnl.co.in/" target="_blank" rel="noopener noreferrer">JBVNL</a>), should also be included as a party to the petition.</p>
<p>After hearing both the parties, the Commission directed Arina Solar to include JBVNL as a party to the petition and asked it to serve a copy of the petition to both SECI and JBVNL. It also directed SECI and JBVNL to file their reply by September 15, 2020.</p>
<p>Arina Solar, in its submission, further requested that the Commission should restrain SECI from encashing the PBG amount of ₹500 million (~$6.67 million) until the final disposal of the petition. In response, SECI noted that it was not going to encash the PBG at this stage, provided the petitioner kept the PBG valid.</p>
<p>Notably, amid the COVID-19 crisis, the Maharashtra Electricity Regulatory Commission <a href="https://mercomindia.com/developer-allowed-invoke-force-majeure/" target="_blank" rel="noopener noreferrer">exempted</a> ACME Heergarh Powertech Private Limited from its contractual obligations under <em>force majeure</em> provision of its power purchase agreement with the Maharashtra State Electricity Distribution Company Limited.</p>
<p>Recently, a subsidiary of ReNew Power also <a href="https://mercomindia.com/seci-encash-bank-guarantee-wind/" target="_blank" rel="noopener noreferrer">filed</a> a petition with the CERC asking it to issue orders restraining SECI from encashing its bank guarantee following delays in project implementation due to <em>force majeure</em> events. The Commission, in its order, directed SECI not to encash the bank guarantee until the next hearing. It also directed ReNew to keep the bank guarantee valid for this period. The Commission has said that the petition would be listed for hearing later, and a separate notice would be issued for the same.</p>
<div class="saboxplugin-wrap" itemtype="http://schema.org/Person" itemscope itemprop="author"><div class="saboxplugin-tab"><div class="saboxplugin-gravatar"></div><div class="saboxplugin-authorname"><a href="https://cms.mercomindia.com/author/rakesh-ranjan-parashar/" class="vcard author" rel="author"><span class="fn">Rakesh Ranjan</span></a></div><div class="saboxplugin-desc"><div itemprop="description"><div class="designboxt">
<p><img class="alignleft" style="border-radius: 50%;height: 50px;margin-top: -4px;border: 1px solid #00b451" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2022/02/Rakesh-Headshot-crop-2.jpg" width="50" /></p>
<p><strong style="text-decoration: underline">Rakesh Ranjan,</strong> Staff reporter at Mercom India<br />
<a href="https://mercomindia.com/author/rakesh-ranjan-parashar/" target="_blank" rel="noopener">More articles from Rakesh Ranjan.</a></p>
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<p><img class="alignleft" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2022/02/Rakesh-Headshot-crop-2.jpg" width="77" height="102" /><a href="https://mercomindia.com/author/rakesh-ranjan-parashar/" target="_blank" rel="noopener"><strong style="color: #00b451">Rakesh Ranjan</strong></a> is a staff reporter at Mercom India. Prior to joining Mercom, he worked in many roles as a business correspondent, assistant editor, senior content writer, and sub-editor with bcfocus.com, CIOReview/Silicon India, Verbinden Communication, and Bangalore Bias. Rakesh holds a Bachelor’s degree in English from Indira Gandhi National Open University (IGNOU). <a href="https://mercomindia.com/author/rakesh-ranjan-parashar/" rel="noopener noreferrer">More articles from Rakesh Ranjan.</a></p>
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Solar Developer Seeks Return of Bank Guarantee After PPA Termination

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