Torrent Power 300MW Wind PPA Terminated with ₹39.78 Crore Penalty

Background & Key Entities

Torrent Saurya Urja 2 Private Limited, a wholly-owned subsidiary of Torrent Green Energy Private Limited (itself a wholly-owned subsidiary of Torrent Power Limited), had received a Letter of Award from Solar Energy Corporation of India Limited (SECI) on July 14, 2022. Subsequently, a long-term Power Purchase Agreement (PPA) for the 300 MW wind power project was formally entered into with SECI on May 04, 2023.

Reason for Termination

The project's implementation was materially impacted by Force Majeure events and significant delays in the readiness of external infrastructure. The specific infrastructure delays cited were related to transmission connectivity and the operationalisation of the Green Energy Corridor (GNA).

SECI acknowledged these circumstances and had granted extensions to the Scheduled Commercial Operation Date (SCOD). However, the period of extension eventually extended beyond what was deemed a reasonable timeframe for project implementation under the PPA's framework, especially given the changed project environment. Due to the continued uncertainty surrounding the project's implementation and SCOD, the decision was made to terminate the 300 MW PPA.

Financial Impact

Pursuant to the applicable contractual provisions governing the termination, liquidated damages of ₹39.78 crore are payable to SECI in connection with the termination of the PPA.