Renewable Developers May Approach National Company Law Tribunal: RK Singh Warns Andhra

The power minister emphasized that non-payment of dues could lead to non-performing assets in the renewable energy sector

September 10, 2019


The Union Minister of Power R.K. Singh has written a letter to Y.S. Jagan Mohan Reddy, the chief minister of Andhra Pradesh, regarding the non-payment of dues from state electricity distribution companies to renewable energy developers.

Singh has pointed out that state DISCOMs owe more than ₹20 billion (~$280 million) to renewable energy developers.

According to Singh, the non-payment of dues to developers may cause them to default on their borrowings from government institutions like Indian Renewable Energy Development Association (IREDA), adding to non-performing assets in the sector and the developers could further drag DISCOMs to the National Company Law Tribunal.

Singh also mentioned that DISCOMs in Andhra Pradesh owed Solar Energy Corporation of India (SECI) over ₹2.43 billion (~$34 million). The letter also stated that developers have asked for enforcement of the tripartite agreement to recover their dues.

Considering the risks, the power minister has requested the chief minister of Andhra Pradesh to instruct the state DISCOMs to start paying the renewable energy generators as well as SECI.

The Central Electricity Authority’s (CEA) recent report states that the total payment due for 513 renewable projects now amounts to ₹97.356 billion (~$1.356 billion) as of July 31, 2019, thus showing an increase of nearly ~ ₹15 billion (~$0.21 billion) compared to the previous figure of ₹82.3 billion (~$1.14 billion) for the same period.

Previously the payment dues were for 472 projects spread across the states of Andhra Pradesh, Himachal Pradesh, Karnataka, Madhya Pradesh, Maharashtra, Punjab, Odisha, Tamil Nadu, Rajasthan, Telangana, and Uttar Pradesh.

At the beginning of August 2019, Mercom reported that the CEA is planning to maintain a database of all outstanding dues by DISCOMs to renewable energy generators. In May 2019, Mercom reported that payment delays were becoming a problem again for solar and wind project developers in India, especially in Andhra Pradesh, Tamil Nadu, and Telangana.

Shaurya is a staff reporter at with experience working in the Indian solar energy industry for the past four years in various roles. Prior to joining Mercom, Shaurya worked with a renewable energy developer and a consulting company. Shaurya holds a Bachelors Degree in Business Management from Lancaster University in the United Kingdom.