CERC Allows Security Interest Creation for Fatehgarh IV Transmission’s Rajasthan Project

The Central Electricity Regulatory Commission (CERC) has approved a petition by Fatehgarh IV Transmission Ltd. (FIVTL), a subsidiary of Apraava Energy Private Ltd., allowing the creation of a security interest over its assets in favor of Axis Trustee Services Ltd.

The approval enables FIVTL to secure financial obligations for a transmission project in Rajasthan. FIVTL holds a transmission license for the 'Transmission System for evacuation of power from REZ in Rajasthan (20 GW) under Phase III-Part A1', awarded on January 30, 2024. To fund the project, it secured a INR 308 crore financial package from Axis Bank, comprising INR 176 crore in a rupee term loan and INR 132 crore as a letter of credit (LC) facility. The total project cost is estimated at INR 346.70 crore, financed with INR 176 crore in debt and INR 170.70 crore in equity as per the Security Trustee Agreement.

As part of the financing arrangement, Axis Trustee Services Limited has been designated as the Security Trustee. The security package includes a first-ranking pari passu charge over all project assets, machinery, contracts, and receivables, along with a mortgage over immovable properties through the deposit of title deeds. Additionally, 51 percent of FIVTL’s equity shares held by Apraava Energy Pvt. Ltd. will be pledged, 30 percent directly and 21 percent under a Non-Disposal Undertaking.

CERC conducted hearings on November 8, 2024, and January 14, 2025, where Central Transmission Utility of India Ltd. (CTUIL) and Axis Trustee Services Ltd. were given the opportunity to respond. No objections were raised. Given the Transmission Service Agreement (TSA) requirement for prior approval before encumbering project assets, CERC cleared the petition, allowing the execution of necessary security documents, including the Deed of Hypothecation, Power of Attorney, and Mortgage Agreements.

With this approval, FIVTL can now move forward with the implementation of its transmission project, ensuring the smooth evacuation of renewable energy from Rajasthan.