The Central Electricity Regulatory Commission (CERC) has issued its final order in a dispute between Prerak Greentech Solar Private Limited and the Central Transmission Utility of India Limited (CTUIL) regarding a 400 MW grid connectivity allocation at the Bhadla-III Pooling Station in Rajasthan. The case revolved around whether the solar developer had complied with mandatory financial closure requirements under the Connectivity and General Network Access (GNA) Regulations.

Under the regulations, project developers are required to achieve financial closure at least six months before the scheduled commencement date of connectivity. In the case of Prerak Greentech, the connectivity start date had been fixed as February 28, 2026. This meant the company was required to complete financial closure by August 28, 2025.

On the deadline date, the company submitted documents claiming that the project would be financed through a combination of a ₹175 crore bank loan and ₹39 crore internal equity contribution. However, instead of submitting a final loan sanction letter, the developer attached an “in-principle” credit commitment issued by Kotak Mahindra Bank. The company argued that delays in approvals from the Central Electricity Authority and ongoing Supreme Court proceedings related to Great Indian Bustard conservation had slowed the process of obtaining a final binding loan sanction.

After reviewing the submission, CTUIL informed the company nearly three months later that the documents did not satisfy the regulatory requirement. According to CTUIL, an in-principle credit commitment could not be treated as a legally binding loan sanction. Following this objection, Prerak Greentech attempted to revise its financing structure by submitting fresh board resolutions showing that the project would instead be fully financed through internal group equity.

CTUIL rejected the revised documents, stating that the company could not alter its financing arrangement after the statutory deadline had already passed. As a result, CTUIL revoked the developer’s 400 MW connectivity allocation on December 31, 2025. To avoid immediate encashment of bank guarantees and to protect its credit standing, the company deposited ₹11.5 crore while challenging the decision before the Commission.

While hearing the matter, CERC agreed with CTUIL that an in-principle loan document did not meet the legal standard required under the regulations. The Commission also held that developers cannot fundamentally change their financing plans after the compliance deadline.

However, the Commission also acknowledged the external regulatory hurdles faced by the company and noted the importance of supporting renewable energy expansion in the country. Taking a balanced view, CERC decided not to allow the complete cancellation of the project.

Instead, the Commission ordered a conditional restoration of the connectivity allocation. Prerak Greentech will now have to pay a delay compensation amount calculated up to the date it secures the final loan sanction. This amount will be adjusted against the ₹11.5 crore already deposited, and any remaining balance will be refunded to the company. The developer has also been directed to furnish fresh construction bank guarantees within 15 days to retain its network connectivity rights.

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