Section 47 in The Maharashtra Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations, 2005
47. Debt-equity ratio.
- 47.1 Any capital expenditure incurred during a financial year on a capital expenditure project commenced on or after April 1, 2005 and/or on purchase of fixed asset on or after such date shall be assumed to be financed at a normative debt:equity ratio of 70:30, to be applied on the annual allowable capital cost for such financial year:47.2Any fixed asset capitalized on account of a capital expenditure project commenced on or after April 1, 2005 or on account of fixed asset purchased on or after such date shall be assumed to have been financed at a normative debt:equity ratio of 70:30 to be applied on the original cost of such project/fixed asset.47.3Any approved change in the original cost of a project/fixed asset after the date of commissioning shall be assumed to have been financed at the normative debt:equity ratio.47.4Where the Transmission Licensee has achieved financial closure prior to the date of notification of these Regulations in respect of a capital expenditure project commenced on or after April 1, 2005 with a debt:equity ratio less than 70:30, he may apply to the Commission for exemption from Regulation 47.1 along with reasons therefor:Provided further that the Commission may exempt such capital expenditure project from the normative debt:equity ratio if it believes that the application of Regulation 47.1 is likely to adversely affect the commissioning schedule of such project and thereby, the cost and/or quantity of electricity supplied to consumers.47.5The Commission may, if it deems appropriate, allow a relaxation in the debt:equity ratio norm specified in this Regulation 47 where the applicant reasonably demonstrates inability to raise loan capital, up to the specified norm, due to market constraints, corporate/group exposure norms of lenders or similar factors:Provided that the Commission shall give any interested or affected party the opportunity to make representations before approving a relaxation in the debt:equity ratio norm under this Regulation 47.5.
