CERC Clears Security Interest for Fatehgarh IV Project

19 Mar 2025 CW Team

The security interest covers both movable and immovable assets, project accounts, documents, and the assignment of its transmission license. The move aims to secure obligations under financing agreements tied to implementing a major transmission project evacuating power from renewable energy zones in Rajasthan, with a total capacity of 20 GW under Phase III-Part A1.

Financing Details Fatehgarh IV Transmission Limited received financial assistance from Axis Bank Limited, amounting to $37 million. This includes a $21 million rupee term loan and a $16 million letter of credit facility.

The financing arrangements were formalized through a Security Trustee Agreement and a Facility Agreement signed on March 27, 2024. The company agreed to create a first-ranking charge over its assets, including equipment, machinery, project documents, bank accounts, receivables, and land. A pledge over 51% of the company’s shares held by Apraava Energy was also established.

Project Progress and Financial Structure As of July 31, 2024, Fatehgarh IV Transmission Limited received $18.5 million from various sources, including equity contributions, shareholder loans, and letter of credit payments issued by Axis Bank. The funds have been used for purchasing transformers, reactors, conductors, substation land, and other essential infrastructure.

The total estimated project cost is $42 million, structured as $21 million in debt and $21 million in equity.

Approval with Conditions CERC approved the security interest creation but imposed conditions to ensure operational reliability. The transmission license cannot be transferred without prior approval, and if the lender enforces its rights due to a default, the new nominee must obtain regulatory clearance and demonstrate the ability to manage the transmission assets effectively.

Additionally, a signed copy of the mortgage deed must be submitted after execution. The commission’s decision supports the smooth execution of the project while safeguarding the interests of lenders and ensuring the reliability of India's growing renewable energy infrastructure.

The Central Electricity Regulatory Commission (CERC) has granted Fatehgarh IV Transmission Limited, a subsidiary of Apraava Energy Private Limited, approval to create a security interest over its assets in favor of Axis Trustee Services Limited. The security interest covers both movable and immovable assets, project accounts, documents, and the assignment of its transmission license. The move aims to secure obligations under financing agreements tied to implementing a major transmission project evacuating power from renewable energy zones in Rajasthan, with a total capacity of 20 GW under Phase III-Part A1. Financing Details Fatehgarh IV Transmission Limited received financial assistance from Axis Bank Limited, amounting to $37 million. This includes a $21 million rupee term loan and a $16 million letter of credit facility. The financing arrangements were formalized through a Security Trustee Agreement and a Facility Agreement signed on March 27, 2024. The company agreed to create a first-ranking charge over its assets, including equipment, machinery, project documents, bank accounts, receivables, and land. A pledge over 51% of the company’s shares held by Apraava Energy was also established. Project Progress and Financial Structure As of July 31, 2024, Fatehgarh IV Transmission Limited received $18.5 million from various sources, including equity contributions, shareholder loans, and letter of credit payments issued by Axis Bank. The funds have been used for purchasing transformers, reactors, conductors, substation land, and other essential infrastructure. The total estimated project cost is $42 million, structured as $21 million in debt and $21 million in equity. Approval with Conditions CERC approved the security interest creation but imposed conditions to ensure operational reliability. The transmission license cannot be transferred without prior approval, and if the lender enforces its rights due to a default, the new nominee must obtain regulatory clearance and demonstrate the ability to manage the transmission assets effectively. Additionally, a signed copy of the mortgage deed must be submitted after execution. The commission’s decision supports the smooth execution of the project while safeguarding the interests of lenders and ensuring the reliability of India's growing renewable energy infrastructure.

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