Trouble-hit wind energy company NuPower Renewables may get barred from PSU contracts if the private firm were to fall foul of the law, say government officials.

This is because the bid documents of all public sector undertaking tenders have an in-built integrity clause that protects the interest of the government from delinquent firms, they said.

“The Standard Bidding Documents have multiple provisions to protect the interest of the government from delinquent firms. During the pre-bid stage itself, the bidder declares that no previous transgression occurred in the last three years immediately before signing of this Integrity Pact. Even transgressions between private companies will get covered”.

Concerns regarding clean energy tenders issued by government companies had emerged after Deepak Kochhar’s NuPower Renewables was embroiled in an alleged quid-pro-quo controversy. NuPower is also facing a preliminary enquiry by the Central Bureau of Investigation into its funding and operations.

NuPower’s website claims to have nearly 700 MW of renewable energy assets operating and in the pipeline located across Tamil Nadu, Karnataka, Rajasthan, Maharashtra, Andhra Pradesh and Madhya Pradesh. “The company sells power to various state grids vide 13 to 20 year power purchase agreements and also sells directly to corporate customers on long term power purchase agreements,” according to a company statement.

Of these projects, 180 MW are operational with 150 MW in Tamil Nadu and another 30 MW in Maharashtra. The company mostly focuses on meeting the demands for private companies for renewable energy certificates and captive renewable power production.

The buzz is that Deepak Kochhar wanted to shed his stake in NuPower as the wind energy business in the country had hit an air pocket with the emergence of tariff-based competitive bids and suppressed margins. There have also been no new announcements from NuPower for over two years now.

“With the primacy of renewables in power generation, valuations would be driven by keenness to scale up operations, availability of sustainable business model with a portfolio of customer contracts and anticipated outlook on technology, finance and growth across utilities, customer segments, power purchase agreement tenure and rates,” said Sambitosh Mohapatra, Partner, PwC India - Power and Utilities.

The already dampened scenario for wind, coupled with a messy public image will make the going harder for Deepak Kochhar. The perception is that the valuation of NuPower will take a further hit, say industry observers.

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