(1) The normative debt equity ratio shall be 70:30.
(2) For generic levellised tariff, the Commission shall adopt debt equity ratio of 70:30.
(3) For project specific levellised tariff, the following provisions shall apply -
(i) if the equity actually deployed is more than 30% of the capital cost admitted by the Commission under regulation 14, the equity deployed in excess of 30% limit shall be treated as normative loan in accordance with the National Tariff Policy and shall be deemed as advanced at the weighted average rate of interest and for a weighted average tenor of the long term debt component of the project after ascertaining the reasonableness of the interest rates and taking into account the effect of debt restructuring, if any;
(ii) in case the equity deployed is equal to or below the normative level of 30%, the actual equity would be used for determination of Return on Equity in tariff computations.
(iii) the equity invested in foreign currency, if any, shall be designated in Indian rupees on the date of each investment.
Explanation.- For the purposes of return on equity, any resources available to the renewable energy generator from its share premium account or from its internal resources that are used to fund the equity commitments of the project under consideration shall be treated as equity subject to the limitations contained in this regulation and regulation 25.
(4) The Commission shall treat any incentive or subsidy and/or grant/budgetary support available from the MNRE/State Government, to the extent specified under regulation 21, to have been utilized towards pre-payment of debt in such phases as it may deem fit, leaving balance loan to be considered for determination of tariff.