Fatehgarh IV Transmission Limited, a fully owned subsidiary of Apraava Energy Private Limited, filed a petition seeking approval from the Central Electricity Regulatory Commission. The petition was about creating a security interest over its assets in favor of Axis Trustee Services Limited. This security interest covers both movable and immovable assets, project accounts, and documents, and includes the assignment of its transmission license. The request was made to secure obligations under financing agreements related to the implementation of a large transmission project. The project involves the evacuation of power from renewable energy zones in Rajasthan, with a total capacity of 20 GW under Phase III-Part A1.
The company had been granted a transmission license for the project on 30th January 2024. To finance the development, Fatehgarh IV Transmission Limited approached Axis Bank Limited, which agreed to provide financial assistance of ₹308 crores. This includes a rupee term loan of ₹176 crores and a letter of credit facility of ₹132 crores. Axis Trustee Services Limited was appointed as the security trustee to oversee the protection of the lender’s interests.
As part of the financing arrangements, the petitioner agreed to create a first-ranking charge over its project assets. These include equipment, machinery, project documents, bank accounts, receivables, and land. Additionally, a pledge was made over 51 percent of the company’s shares held by Apraava Energy Private Limited. The security arrangement was formalized through a Security Trustee Agreement and a Facility Agreement signed on 27th March 2024.
The petitioner explained that securing the loan by offering its assets as collateral was standard practice for transmission projects, which require significant capital investment. By doing so, the lenders are assured repayment of their loans. According to the petitioner’s submissions, as of 31st July 2024, they had already received ₹153.31 crores from various sources, including equity contributions, shareholder loans, and payments through the letter of credit issued by Axis Bank.
The funds had been used for purchasing transformers, reactors, conductors, substation land, and other infrastructure necessary for the project. Expenses also included acquisition fees and administrative costs. The total estimated cost of the project stands at ₹346.70 crores, with financing structured as ₹176 crores in debt and ₹170.70 crores in equity.
The commission reviewed the petition and found the request reasonable. It agreed to allow Fatehgarh IV Transmission Limited to create a security interest over its assets in favor of Axis Trustee Services Limited. However, the approval comes with conditions. The company’s transmission license cannot be transferred to any other party without the prior approval of the commission. If the lender enforces its rights due to a default, the nominee taking over the project will need regulatory clearance and must demonstrate the ability to manage and operate the transmission assets.
The commission also directed that a signed copy of the mortgage deed be submitted after execution. The commission’s decision ensures that while lenders’ interests are secured, the quality and reliability of transmission services are maintained through strict oversight. This approval facilitates the timely execution of the project, contributing to the expansion of renewable energy infrastructure in India.
