Torrent Power subsidiary terminates 300 MW PPA with SECI, to pay ₹39.78 crore damages
Torrent Power's subsidiary, Torrent Saurya Urja 2 Private Limited, has terminated its 300 MW wind power PPA with SECI. The termination follows delays due to Force Majeure events and infrastructure readiness. The company will pay ₹39.78 crore in liquidated damages.
The termination of a 300 MW project and associated damages will have a financial impact, but it is mitigated by the fact that it is a subsidiary and the damages are a specific, quantifiable amount.
The termination of a significant power purchase agreement and the imposition of liquidated damages indicate a negative development for the company.
Torrent Power Limited has announced the termination of a 300 MW wind power project Power Purchase Agreement (PPA) between its wholly-owned subsidiary, Torrent Saurya Urja 2 Private Limited, and Solar Energy Corporation of India Limited (SECI).
The subsidiary had received a Letter of Award from SECI on July 14, 2022, and subsequently entered into the PPA on May 04, 2023. However, the project faced significant delays due to Force Majeure events and external infrastructure readiness, including transmission connectivity and GNA operationalization. SECI had granted extensions to the Scheduled Commercial Operation Date (SCOD).
Despite these extensions, the implementation period extended beyond what was considered reasonable under the PPA framework, given the prevailing circumstances and changes in the project environment. Consequently, due to continued uncertainty regarding the project's SCOD, the 300 MW PPA has been terminated.
As a result of this termination, Torrent Saurya Urja 2 Private Limited is liable to pay liquidated damages amounting to ₹39.78 crore.
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