Reliance Power faces $165m US Exim IBC plea in 2026

What happened and why it matters

Reliance Power said the Export-Import Bank of the United States (US Exim) has filed an insolvency application against the company under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016. The application alleges a default linked to Samalkot Power Ltd (SPL), a subsidiary whose obligations were guaranteed by Reliance Power. The amount cited by the lender is a net debt of $165.41 million.

The filing brings a cross-border financing dispute into India’s insolvency framework through the guarantor company. Reliance Power said it is contesting the claim and has been advised the application will be “appropriately contested”. The company added it will take necessary legal steps to protect its interests.

Details of the Section 7 IBC filing

In its exchange filing dated April 29, 2026, Reliance Power disclosed that US Exim has approached the National Company Law Tribunal (NCLT). The application has been filed under Section 7 of the IBC, which is typically used by financial creditors to initiate a corporate insolvency resolution process when a default is alleged.

Reliance Power’s disclosure focuses on two points: first, that the alleged default relates to SPL’s debt; and second, that the corporate guarantee provided by Reliance Power is being invoked on that basis. The company said the claim is being contested and is not legally tenable.

The $165.41 million guarantee at the centre

US Exim’s claim, as described by Reliance Power, relates to “default of debt (net debt US$ 165.41 mn)” by SPL that was guaranteed by Reliance Power. The company’s position is that the guarantee should not be invoked because the underlying debt has not fallen due.

This distinction matters because a guarantee claim typically depends on whether there is a payment default under the underlying credit documents. Reliance Power said it had earlier communicated to the lenders that since the debt had not fallen due and there is no default, the corporate guarantee cannot be invoked.

Reliance Power’s defence: debt “not due”

Reliance Power said the dispute is already sub judice, pointing to arbitration proceedings initiated by SPL. The company said SPL moved the London Court of International Arbitration (LCIA) last year against US Exim Bank and Citibank N.A., which is described as the facility agent.

According to Reliance Power, SPL’s arbitration is based on the ground that the debt is not due as on June 30, 2025 under the relevant agreements. The company’s filing states that the arbitration was filed on the grounds that the debt had not fallen due as of June 30, 2025, and therefore there was no default.

London arbitration and the 2019 credit agreement

Reliance Power’s exchange filing refers to the terms of an Amended and Restated Credit Agreement dated June 28, 2019, read with marketing agreements executed among parties including US Exim Bank, SPL and marketing consultants. SPL has initiated arbitration under the LCIA framework against US Exim and Citibank N.A. as facility agent.

Separately, the provided material also states that Reliance Power had 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 has not yet fallen due as of June 30. These disclosures place the dispute squarely around contractual due dates and the interpretation of payment obligations.

Samalkot gas-based project background

The dispute is linked to SPL’s 2,400 MW gas-based Samalkot project in Andhra Pradesh. The material states that in 2019, Reliance Power signed a credit restructuring agreement with US Exim Bank for the Samalkot project, involving debt of ₹24.3 billion.

The project later turned into a non-performing asset, with the text attributing this to financial stress and gas supply constraints. This background helps explain why the repayment profile and restructuring terms are central to the disagreement on whether any instalment had fallen due by June 30, 2025.

Other legal and regulatory overhangs mentioned

Alongside the insolvency application, the supplied text includes other legal developments involving Reliance Power. The Enforcement Directorate (ED) said it filed a chargesheet against Reliance Power Ltd and 10 others in a money laundering case linked to an alleged fake bank guarantee of ₹68.2 crore submitted to secure a tender from Solar Energy Corporation of India (SECI). Officials said the chargesheet was filed under the Prevention of Money Laundering Act (PMLA) at the Patiala House court in Delhi.

The ED case stems from a November 2024 FIR by Delhi Police’s Economic Offences Wing (EOW). The ED alleged a shell entity, Biswal Tradelink, was involved in issuing “fake” bank guarantees against commission. The ED also claimed Reliance Power routed ₹6.33 crore from its subsidiary Rosa Power Supply Company Ltd to Biswal Tradelink under the guise of bogus transportation services and later paid a fee of ₹5.40 crore to the entity.

The material also mentions that the Ministry of Corporate Affairs (MCA) initiated a fresh probe into alleged diversion of funds across multiple group companies, with the ED estimating at least ₹13,600 crore was diverted through layered transactions. Separately, a synopsis in the supplied text says Reliance Infrastructure and Reliance Power stated no impact from the ED’s attachment of ₹7,500 crore properties linked to a money laundering probe, adding that the majority of attached assets belong to Reliance Communications, which is under resolution and not part of the group since 2019.

What investors should track next

Reliance Power said it will contest the US Exim insolvency application and take necessary legal steps. On process, the immediate next milestones are the NCLT’s consideration of the Section 7 application and any orders on admission or maintainability.

In parallel, the LCIA arbitration initiated by SPL remains a key track because it directly addresses whether the debt had fallen due as of June 30, 2025. Investors typically watch for company disclosures on legal strategy, any provisioning decisions mentioned in filings, and updates on hearings or procedural developments.

Key facts at a glance

Conclusion

Reliance Power has disclosed an insolvency plea by US Exim Bank at the NCLT over a $165.41 million guarantee tied to Samalkot Power’s debt. The company says the claim is disputed, argues the debt had not fallen due as of June 30, 2025, and points to ongoing LCIA arbitration in London. Reliance Power has said it will contest the insolvency application and pursue legal steps to protect its interests, with upcoming proceedings at the NCLT and in arbitration likely to shape the next set of disclosures.