Rs 12 cr penalty slapped on ReNew Power in Madhya Pradesh

ReNew Power’s subsidiary has been ordered to pay Rs 11.95 crore penalty to Madhya Pradesh Power Management Company for delay in commissioning 51 megawatt (mw) solar power project. In October 2015, ReNew Clean Energy had bagged the project to set up and supply 51 mw solar power project at a tariff of Rs 5.45 per unit for 25 years. The bid was for a total of 300 mw of solar power project. Thereafter, ReNew Clean Energy faced trouble in acquiring land to set up the plant. It then requested the state government to assist with the same, as a result, it was allocated 96.73 acre of state land. However, the renewable energy player discovered the land to be encroached and was unable to approach due to attacks by the locals.

After having successfully sought change of location, ReNew Clean Energy bought 253 acre at a different location. Due to delay in project commissioning, state government’s power firm terminated the contract and power purchase agreement and invoked the bank guarantee of Rs 15.30 crore, leading to petition at the Jabalpur High Court.

The high court set aside contract termination and allowed invocation of bank guarantee. Earlier this month, the apex court allowed continuation of the contract, however, imposed a penalty of Rs 11.95 crore on ReNew Power’s arm ReNew Clean Energy.

(By Ateeq Shaikh, DNA Money)