Photo of Ramanuj Kumar

Partner in the Projects and Projects Finance Practice at the Delhi office of Cyril Amarchand Mangaldas. Ramanuj has over 12 years of extensive experience in the projects and banking and finance practice. He has also worked with the International Finance Corporation on a secondment and Clifford Chance in London. He can be reached at ramanuj.kumar@cyrilshroff.com

Recovery of Change in Law Impact – An Overdue Intervention

Introduction

Power purchase agreements (PPAs) are generally long-term contracts that are vulnerable to legislative or judicial interventions. These interventions have the potential to impact the cost of establishing or operating generation plants over the life of the PPA. In order to address this risk, PPAs (and many other long-term contracts) incorporate a provision for ‘Change in Law’, which seeks to provide a mechanism to compensate the affected party for increase in cost or decrease in revenues, occasioned by changes in rules/ regulations governing the setting up and operation of the generation plant.


Continue Reading Recovery of Change in Law Impact – An Overdue Intervention

At least since 2012, there has been a fair amount of legal uncertainty on the ambit of powers of the Central Electricity Regulatory Commission (CERC) and the State Electricity Regulatory Commissions (SERCs) under the provisions of the Electricity Act, 2003 (the 2003 Act) to award what came to be known as a “compensatory tariff” in case of tariff-based competitively bid power generating projects.

The issue took centre stage in 2011-12 with the promulgation of regulations by Indonesia, which barred export of coal from that country below a certain benchmark price. A number of Indian power project developers had submitted aggressive tariff bids during 2006-2009 relying on the import of relatively cheaper coal from Indonesia to India to fuel their power projects.


Continue Reading SC Clarifies the Scope of Regulatory Power under Section 79 (1) of Electricity Act, 2003