Energy and Infrastructure Practice
Our Energy and Infrastructure practice provides general regulatory advisory for businesses operating in India’s energy and infrastructure sectors. We advise on the regulatory framework under the Electricity Act, 2003, power purchase agreements, CERC and SERC regulatory proceedings, infrastructure concession structures, and project finance documentation. Our practice focuses on the legal and regulatory dimensions of project development and operation — we do not imply specific sector depth or advisory credentials beyond what general regulatory advisory covers.
- The Electricity Act, 2003 established CERC at the central level and SERCs in each state as the primary regulatory bodies. Licensing requirements, open access rights, renewable purchase obligations, and tariff regulation are all within their jurisdiction.
- Power Purchase Agreements are the foundational commercial document of any energy project. Their tariff structure, curtailment compensation mechanism, change in law provisions, and payment security arrangements determine the project’s bankability.
- Infrastructure projects in India are typically structured under concession agreements with a government authority granting the developer the right to build, operate, and transfer or own the infrastructure for a specified period.
- Project finance documentation for energy and infrastructure projects requires the full security package: pledge of project company shares, assignment of project contracts, hypothecation of plant and equipment, and mortgage of land rights.
- Change in law provisions in PPAs and infrastructure concession agreements determine which party bears the financial consequences of regulatory changes. In a sector where central and state policies change frequently, the scope of this provision is material.
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Electricity Regulation — CERC, SERC, and APTEL
We advise on the regulatory framework established by the Electricity Act, 2003, which governs generation, transmission, distribution, and trading of electricity. CERC and SERCs have jurisdiction over tariff determination, licensing, open access rights, and dispute resolution between sector participants. We represent generators, transmitters, distributors, and large consumers in regulatory proceedings before CERC and state ERCs — tariff petitions, open access applications, and disputes about curtailment compensation and connectivity charges. Appeals from CERC and SERC orders lie to the Appellate Tribunal for Electricity (APTEL).
Power Purchase Agreements — Our Advisory
We advise on PPA terms for renewable energy projects and conventional generation, including tariff structure, scheduled generation and deemed generation provisions, curtailment compensation mechanisms, change in law definitions and relief provisions, payment security arrangements (including letters of credit and state government guarantees), and termination payments. The change in law provision is a commercially material term in any long-term PPA in India given the frequency of policy changes affecting generation costs.
“The change in law provision in a power purchase agreement is not boilerplate. In a sector where policy changes affecting generation economics occur regularly, the scope of this clause determines which party absorbs each change over a twenty-five year contract.”Infrastructure Project Contracts
We advise on the legal framework for infrastructure projects structured under concession agreements with government authorities. We advise on concession agreement terms, force majeure and change in law provisions, termination payments, lender step-in rights, and the financing of infrastructure projects. Concession agreements for Indian infrastructure projects typically involve NHAI for highways, AAI for airports, or state-level authorities for ports and urban infrastructure.
Project Finance Documentation
We advise lenders and borrowers on project finance documentation for energy and infrastructure projects — term loan agreements, the security package (pledge of project company shares, assignment of project contracts including the PPA or concession agreement, hypothecation of plant and equipment, mortgage of land rights), escrow account documentation, and lender step-in rights. For ECB-financed projects, we advise on the FEMA ECB framework and the conditions applicable to the use of ECB proceeds for capital expenditure. Across 13 partners and 220+ professionals from offices in New Delhi, Mumbai, Chennai, Hyderabad, and Bangalore.
Frequently Asked Questions
energy-and-infrastructure-practice-faq
A power project in India typically requires: environmental clearance under the EIA Notification, 2006 (for projects above the prescribed capacity threshold); consent to establish and consent to operate from the State Pollution Control Board; connectivity approval from the transmission utility; and, for thermal projects, fuel supply arrangements. Tariff-based projects under CERC’s or SERC’s jurisdiction require the applicable tariff determination or discovered tariff approval. Additional sector-specific approvals — for renewable energy, coal allocation, or gas supply — depend on the technology and fuel type.
A Power Purchase Agreement (PPA) is a long-term contract between a power generator and a utility or commercial buyer for the supply of electricity at an agreed tariff over a specified term. Key commercial terms include: the scheduled generation quantum and the consequences of shortfall; deemed generation provisions compensating the generator for curtailment by the buyer; the tariff structure and the mechanism for tariff revision; the change in law provision allocating the risk of regulatory changes; payment security arrangements; and termination payment provisions establishing what each party receives if the PPA is terminated early.
Open access under Section 42 of the Electricity Act, 2003 allows a consumer (other than the distribution company in the area) to use the transmission and distribution network of a licensee to purchase electricity from a source of its choice, subject to the payment of surcharges and wheeling charges. Open access at the distribution level (for consumers above a specified connected load) is regulated by SERCs and has been a source of significant regulatory litigation, as state regulators and distribution companies have at various times imposed conditions that effectively limit its commercial viability.
A lender step-in right is a contractual right granted to project finance lenders to assume control of the project — either directly or through a new entity — in the event of a borrower default, in order to prevent the termination of the concession agreement or PPA and preserve the value of the lenders’ security. Step-in rights are typically negotiated directly with the project authority (the government counterparty) through a direct agreement, under which the project authority agrees not to terminate the project contract without first giving the lenders an opportunity to cure the default.
A change in law provision in an infrastructure concession agreement allocates the financial consequences of changes in applicable law between the project developer and the government counterparty occurring after the agreement date. It typically entitles the developer to compensation for cost increases or revenue reductions resulting from specified categories of regulatory change. The scope of the definition — which changes qualify, from what date, and through what compensation mechanism — is a material negotiating point in any Indian infrastructure concession.