Madhya Pradesh seeks to quash Goldman-backed solar project
Madhya Pradesh moves SC to quash ReNew Power solar project after a state court rejected its attempt to scrap the agreement citing land acquisition delays
New Delhi: Madhya Pradesh, India’s second largest state, has appealed to the country’s top court to quash a Goldman Sachs-backed solar project, highlighting the challenges faced by solar companies looking to expand in Asia’s third largest economy.
Madhya Pradesh’s attempts to scrap the agreement with ReNew Power over the 51 megawatts (MW) project, citing land acquisition delays, were thrown out by a state court.
But the central Indian state’s distribution company (discom) has now appealed to the country’s highest court, potentially setting up a prolonged legal battle.
The move comes after Madhya Pradesh cancelled three solar power purchase deals with Canada-based Sky Power Global, also due to issues related to land acquisitions. Sky Power challenged the cancellations in the state high court, but lost the case.
India is targeting a 30-fold increase in solar power generation capacity to 100 gigawatts (GW) by 2022.
But the plan risks running into trouble as debt-laden states try to renegotiate deals with solar investors.
Six state governments have pushed developers to lower tariffs on projects worth $7.5 billion in the last two months, prompting India to bar state authorities from unilaterally cancelling or modifying solar power purchase agreements.
Solar tariffs fell to a record low of Rs2.44 per unit earlier this year, leading several state discoms to try to renegotiate contracts, saying the prices they were paying to purchase power were too high.
ReNew Power, which has invested Rs2,000 crore ($314 million) in Madhya Pradesh, alleges the state discom is not commissioning its plant, despite it being ready a week ago.
“The plant is ready since 30 August, while the specified date of commissioning was 7 September,” said ReNew’s chief operating officer Parag Sharma.
ReNew has written to the discom seeking compensation if the project agreement is terminated, Sharma told Reuters. Reuters
- EU finance ministers strike deal on overhaul of banking capital rules
- Big oil consumers start to lock-in prices as Brent urges to $80
- PSU bank recapitalisation plan stumbles as losses mount
- Govt orders out-of-turn coal supply to PSUs, private plants to be hit
- Oil prices fall as Russia floats gradual production increase
Editor's Picks »
- Tata Motors shelves sports car project RaceMo
- Tata Communications, Arvind to move out from NSE’s Nifty Midcap 50 index
- EPFO notifies 8.55% interest rate on PF for 2017-18, lowest in 5 years
- Bangladesh PM Sheikh Hasina asks India for support on Rohingyas
- Donald Trump says US North Korea summit ‘could’ happen on 12 June
- Motherson Sumi continues to face margin pressure in foreign markets
- What the Warren Buffett indicator tells us about market valuations today
- Jet Airways lands with a thud in Q4 as fuel costs increase
- IBC amendments: Some dilutions, and a lot more speed
- Patanjali’s gambit is paying off in toothpaste wars