The RS India Wind Energy Private Limited, (RSIWEPL) a wind power producer that operates a 41.25 MW (25×1.65 MW) wind-based power project in the Satara district in Maharashtra has floated the tender inviting bids to settle lease obligations of the company towards the Power Finance Corporation Limited (PFC).

As far as the qualification criteria are concerned, interested bidders could be an individual, co-operative society, a trust, or a group company. The last date for the submission of bids is April 7, 2020. Interested bidders must meet the following criteria:

For banks, non-banking finance companies (NBFCs), asset reconstruction companies (ARCs), or securitization companies (SCs), the bidder should have a net worth of ₹1 billion (~$13.3 million), corporates should have ₹2 billion (~$26.6 million). If a financial institution bids, it should have a net worth of ₹5 billion (~$66.6 million) as on March 31, 2019.

For the development and operation of the project, the company has availed lease-based facilities from PFC. The company has been facing financial difficulties due to which it has not been able to service its debt obligation.

RS India Wind Energy Private Limited has submitted a one-time settlement proposal to the lender as a full and final settlement of dues owed to the lender (PFC). To attract more parties and also to achieve better price discovery, the lender may conduct a Swiss Challenge process by inviting bids from interested parties.

Swiss Challenge is a form of bidding primarily used in public projects in which interested party initiates a proposal to bid for the project. After receiving the proposal, the government publishes the details of the project, inviting proposals from other interested parties in which the second bidder can give suggestions or improve it.

In August 2010, a power purchase agreement (PPA) was signed with the Maharashtra State Electricity Distribution Company Limited (MSEDCL) for 36.30 MW for 22 wind turbine units of 1.65 MW each for Wind Zone 1. Similarly, in November 2010, the second PPA was signed with MSEDCL for 3.30 MW for two WTG units of 1.65 MW each for Wind Zone 2.

Later in May 2012, the company entered a wind energy PPA with MSEDCL for 1.65 MW for one wind turbine generating unit of 1.65 MW for Wind Zone 1.

The applicable tariff ranged between ₹4.41 (~$0.16)/ kWh to ₹5.07 (~$ 0.17)/ kWh for 13 years from the commercial operation date (COD).

According to the bidding documents, the promoters of RS India Wind Energy Private Limited submitted a binding settlement proposal of ₹1 billion (~$13.3 million), comprising cash of ₹500 million (~$6.66 million) to be paid to the PCL. It also included a deferred cash component of ₹500 million (~$6.66 million) to be paid in two tranches of ₹250 million (~$3.33 million) each by September 30, 2020, and March 31, 2021. The payment would be the full and final settlement of the dues owed by the company to the Power Finance Corporation.

In January 2020, Mercom reported that the Maharashtra Electricity Regulatory Commission (MERC) had asked the Maharashtra State Electricity Distribution Company Limited to extend the financial closure and scheduled commission date for a wind project developed by Mytrah Vayu (Vedavati) Private Limited (MVPL).

Meanwhile, in December 2019, the Andhra Pradesh Power Finance Corporation Limited (APPFCL) had stated that the state-run power companies have been raising funds from financial institutions and other lending organizations at high-interest rates resulting in high payouts by these companies as interest.

Image credit: GERC