MNRE Blacklists Solar Firm Over Unfinished Solar Park and Misuse of Funds

In a significant move, the Ministry of New and Renewable Energy (MNRE), Government of India, has blacklisted M/s Pragat Akshay Urja Ltd., a renewable energy company based in Indore, Madhya Pradesh, following its failure to develop a 500 MW solar park in Maharashtra despite receiving substantial Central Financial Assistance (CFA).

The project was initially approved by MNRE in 2015 for a site in Taluka-Sakri, District Dhule, Maharashtra. To facilitate the development, the company set up a Special Purpose Vehicle (SPV), M/s Sai Guru Mega Solar Park Pvt. Ltd., to oversee the project. However, despite claiming that land acquisition for the project had been completed, the company failed to provide any verifiable proof of the land acquisition, raising concerns about the legitimacy of their claims.

The MNRE order also stated that a joint inspection conducted in December 2018 by MNRE, the Solar Energy Corporation of India (SECI), and the Maharashtra Energy Development Agency (MEDA) revealed no physical progress at the site. The inspection revealed that there was no on-site office or development activity, contradicting the company's earlier assertions. "Therefore, it is a case of criminal breach of trust, cheating and embezzlement of Government money which was released to the company as Central Financial Assistance (CFA).," said the MNRE order.

This prompted SECI to recover the INR 4.10 Crore CFA that had been disbursed for the project. Despite the directive, the company refunded only INR 2.17 Crore through MEDA and failed to return the balance, even after repeated notices from MNRE and a court order from the Delhi High Court on 22nd April 2020. The court had directed the company to refund the remaining amount with interest, but the company continued to evade compliance.

Further investigation revealed that 93 percent of the shares in the SPV were owned by M/s Pragat Akshay Urja Ltd., making it fully accountable for the failure of the project. The company’s refusal to refund the balance CFA, despite legal and government pressure, led to the conclusion that there was an intention to defraud the government of its allocated funds. As a result, MNRE has blacklisted M/s Pragat Akshay Urja Ltd., barring it from entering into any contracts or agreements with the Government of India, State Governments, or any other government entities until the full refund, including interest, is made.

The blacklisting order was issued with the approval of the competent authority and has been forwarded to various government departments and agencies to ensure enforcement.

This move serves as a stern warning to other companies in the renewable energy sector about the importance of accountability and adherence to government regulations, particularly in projects funded by public money.