Reliance Power Says Corporate Guarantee Not Enforceable

Reliance Power Ltd. on late Tuesday said it has informed US Exim Bank and Citibank N.A. that its corporate guarantee cannot be invoked, as there is no payment default and the debt under the credit agreement, due as of June 30, has not yet fallen due.

The statement follows arbitration proceedings initiated by its subsidiary, Samalkot Power Ltd., against both lenders before the London Court of International Arbitration.

In 2019, Reliance Power had signed a credit restructuring agreement with US Exim Bank for the 2,400 MW gas-based Samalkot project in Andhra Pradesh, involving debt of ₹24.3 billion.

The project eventually turned into a non-performing asset, due to financial stress and gas supply constraints.