Professional Documents
Culture Documents
BY
SHYAM SUNDER GUPTA
PGDM-FINANCE-77/2008
JUNE, 2009
Power Finance Corporation Ltd. 2009
Table of Contents
ACKNOWLEDGEMENT .........................................................................................................3
LIST OF ABBREVIATIONS....................................................................................................4
EXECUTIVE SUMMARY .......................................................................................................5
1: INDUSTRY PROFILE ..........................................................................................................6
2: COMPANY PROFILE ........................................................................................................17
3: OBJECTIVE AND METHODOLOGY ..............................................................................24
4: LITERATURE REVIEW ....................................................................................................25
5: GUIDING PRINCIPLE FOR PROJECT APPRAISAL AT PFC .......................................29
6: PROJECT APPRAISAL PROCESS AT PFC .....................................................................30
7: FINANCIAL MODEL: A TOOL FOR PROJECT APPRAISAL.......................................31
8: INTEGRATED PROJECT RATING ..................................................................................32
Categorization of Entities: ................................................................................................33
Preliminary Appraisal.......................................................................................................33
Detailed Appraisal: ...........................................................................................................33
Quantitative Factor Grade: ..............................................................................................37
Qualitative Factors............................................................................................................38
Final Output..........................................................................................................................40
9: CASE STUDY.....................................................................................................................46
9.1: PROJECT DETAILS........................................................................................................47
9.1.1 Project Structure..........................................................................................................47
9.1.2 Location of the Project ................................................................................................47
9.1.3 Land.............................................................................................................................48
9.1.4 Generation Process......................................................................................................48
9.1.5 Super Critical Technology ..........................................................................................50
9.1.6 Primary Fuel................................................................................................................51
9.1.8 Secondary Fuel............................................................................................................51
9.1.9 Water ...........................................................................................................................52
9.1.10 EPC Contract.............................................................................................................52
9.1.11 Operation & Maintenance Arrangements .................................................................53
9.1.12 Utilities ......................................................................................................................53
9.1.13Evacuation of power...................................................................................................53
ACKNOWLEDGEMENT
All successful work needs large number of hands to accomplish any work. I acquire this opportunity
with much pleasure to thank all the people who have helped me through the course of my journey
towards this project. I sincerely thank my project guide, Mr. P. K. Sinha (D.G.M. Projects, PFC), for
his guidance, help and motivation. Apart from the subject of my study, I learnt a lot from him, which I
am sure, will be useful in different stages of my life.
I would like to express my gratitude to Mr. Sanjeev Gupta (Officer, Project Appraisal) and Mr.
Mohit Anand (Officer, Entity Appraisal) for their help in understanding and formulating the model
design and methodology, and Mr. Nitin Garg (Officer, Project Appraisal) for his review and many
helpful comments.
I would like to thank Prof. G.L.Sharma of Lal Bahadur Shashtri Institute of Management,
NewDelhi and Dr. Ashok Gupta, Executive Director, Power Finance Corporation Ltd for providing
me an opportunity to undergo such a beneficial project in the organization. I would like to thank my
teachers for their assistance and useful comments. Their caring and supportive attitude gives me a lot
of support in doing my project.
I am especially grateful to my colleagues for their assistance, criticisms and useful insights. I am
thankful to all the other students (past and present) of LBSIM Delhi with whom I share tons of fond
memories. My sincere gratitude also goes to all those who instructed and taught me through the years.
Finally, this project would not have been possible without the confidence, endurance and support of
my family. My family has always been a source of inspiration and encouragement. I wish to thank my
family, whose love, teachings and support have brought me this far.
LIST OF ABBREVIATIONS
BU Billion Units
KV Kilo Volts
LC Letter of Credit
EXECUTIVE SUMMARY
Power projects are capital intensive and have long gestation period, therefore adequate long
term financing is a critical factor. Massive investment is needed for new projects,
expansions, undertaking of reforms and restructuring, debt refinancing and short term
working capital needs and to fulfill this capital needs, the companies generally raise money
from lending institutions. PFC is also a Non-Banking Financial Institution which provides
financial assistance for the power projects. Project analysis is an essential part of PFC. It
involves a thorough analysis of the ability of the project to fulfill the desired objectives.
This project report titled “Project Appraisal and Integrated Project Rating of Thermal Power
Projects at PFC”, studies the overall financing of project and the parameters and
methodology followed for examining the overall potential of the promoters and project.
Project Appraisal structure share common features but since every project is unique and
requires tailoring of particular circumstances and features of the project. The project is
examined to see if it meets the financial, economic and social criteria that must have been
set for investment expenditure. Thus, different parameters like requirement of permissions,
agreement & clearances, capital outlay, profitability, payback period, internal rate of return
(IRR) and other project related analysis is done. The study of the financial background of the
promoters and the project tells us about the ability of the promoter to handle the project
efficiently. A sensitivity analysis is made on the project to identify the key variables, which
determine its outcomes. For this, the accuracy of the available data is improved to the point
where an operational plan of action can be developed. The detailed project report is made
which involves setting down the basic programs, allocating tasks, determining the resources
and setting down in operational form from the functions to be carried out and their
priorities. The formal approval requires the acceptance of funding proposals and agreement
on contract document, including tenders and other contracts requiring the commitment of
resources. The project feasibility is checked assuming the worst case scenarios to analyze
the debt repayment capability of the company in these conditions. Integrated Project Rating
helps in evaluating the exposure limit, interest rate, and collateral securities against the loan
to individual borrower.
****************
1: INDUSTRY PROFILE
Bullish economic growth story of any country depends on a robust power generation &
delivery model. A weak power infrastructure impedes the growth potential & thus pulls back
the growth initiative. The National Electricity Policy envisages “Power for all by 2012” and
the per capita availability of power to be increased to over 1000 units by that period, which
indicates an average consumption growth of about 13.81% every year. It is easy to make such
a rosy projection for the future, but very difficult to attain it, especially when the capacity
addition targets of every five year plan falls short of expectations. In this back droop, there
comes the need for increased private participation in the power sector & initiating policies by
more and more private companies to be self reliant on power front.
Electricity is one of the most vital infrastructure inputs for economic development of a
country. The demand of electricity in India is enormous and is growing steadily. The vast
Indian electricity market, today offers one of the highest growth opportunities for private
developers.
Since independence, the Indian electricity sector has grown many folds in size and capacity.
The generating capacity has increased from a meager 1,362 MW in 1947 to more than
148,265.4 MW by 2003, a gain of more than 110 times in capacity addition. India's per
capita energy consumption is projected to grow from 6.2 million Btu in 1980 to 18.2 million
Btu in 2010 -- a rise of almost 300 percent. Although, India's energy consumption per unit of
output is still rising, but it is expected to level off and to decline in the future. India consumes
two-thirds more energy per dollar of gross domestic product (GDP) as the world average.
India consumes only about 18 percent of the energy per person as the world average. Nearly
64.4 per cent of India's electricity is produced in thermal facilities using coal or petroleum
products. 25 per cent electricity is generated by hydroelectric facilities.
In its quest for increasing availability of electricity, the country has adopted a blend of
thermal, hydro and nuclear sources. Out of these, coal based thermal power plants and in
some regions, hydro power plants have been the mainstay of electricity generation. Of late,
emphasis is also being laid on non-conventional energy sources i.e. solar, wind and tidal.
India is one of the main manufacturers and users of energy. Globally, India is presently
positioned as the eleventh largest manufacturer of energy, representing roughly 2.4% of the
overall energy output per annum. It is also the world’s sixth largest energy user, comprising
about 3.3% of the overall global energy expenditure per year. In spite of its extensive yearly
energy output, Indian Power Sector is a regular importer of energy, because of the huge
disparity between oil production and utilization.
India’s power market is growing faster than most of the other countries. With an installed
generation capacity of 141.5 GW, generation of more than 600 billion kWh, and a
transmission & distribution network of more than 6.3 million circuit Kms, India
India has today
emerged as the fifth largest power market in the world compared to its previous position of
eighth in the last decade.
Source:: powermin.gov.in
Usually energy, especially electricity, has a major contribution in speeding up the economic
development of the country. The existing production of per capita electricity in India is
around 600 kWh per annum. Ever since 1990s, India’s gross domestic product (GDP) has
been increasing very rapidly and it is estimated that it will maintain the pace ini the next
couple of decades. The rise in GDP should be followed by an increase in the expenditure of
key energy other than electricity.
The gross electricity production capability of Indian Power Sector is placed at around
148,265.4 MW. A key portion of this generated electricity i.e. 64.4 per cent is thermal
energy. Though, this is still not sufficient.
Source:: powermin.gov.in
Source:: powermin.gov.in
The following graph shows a near doubling of per capita consumption of electricity from
about 350 units in 1998 to over 600 units in 2005.
In the past, the power sector growth has not kept pace with the economic expansion and this
has resulted in India experiencing a 13 per cent shortage in peak capacity and 8 per cent in
energy terms, on an overall basis. Driven by the requirement to enhance the budgetary
allocations to social sectors to meet the emerging requirements of sustainable growth, the
Government has envisaged a manifold increase in the role of the private sector sec in the
financing and operations of the power sector. Significant structural and regulatory reforms
have paved the way for increased private sector participation in all aspects of the sector.
Many of the legal and regulatory requirements to enable this are in place, while the
operational provisions are in different stages of implementation in different states.
The Government of India’s blueprint for the power sector envisages a capacity addition of
100,000 MW between 2002 & 2012, and another capacity addition of 100,000 MW between
2012-2017
2017 along with a required associated investment for the transmission and disdistribution
network. A similar substantial capital investment is required to develop the national grid, for
renovation and modernization of inefficient and ageing generation plants and network, for
electrification of rural areas, and to improve adequacy, reliability and the quality of power
supply.
• The “investment” required is not restricted to financial capital. The electricity sector
incurs a commercial loss of about Rs 20,000 crores (nearly US$ 4 billion) per annum; a
significant part of which is attributed to inefficient operation. To plug this, the power sector,
and specifically, the distribution companies must re-engineer their business processes, invest
in modern IT systems for billing, MIS, tracking, energy audit etc., train their operating staff
to improve their management, commercial and technical skills, and undertake other such
performance improvement measures. All of this provides significant business opportunities to
various service providers.
Reorganizing the fact that economies of scale leading to cheaper power could be secured
through large size power projects and for introducing the efficient super critical technology in
a big way, a unique initiative has been launched for development of Ultra Mega Power
Projects (UMPPs) under tariff based international competitive bidding route. 9 sites for
development of 4000 MW project each have been identified so far.
Government of India (GoI) has launched Ultra Mega Power Projects initiatives to step up
power generation capacity at rapid speed
Seven projects of capacity 4000 MW each identified to be allocated to the developers on
tariff based competitive bidding
Tariff determined in this manner to be accepted by the regulator under Electricity Act
GoI to acquire land, secure environment clearance, arrange water linkage and secure Captive
Coal Mine (for pit head plants) before handing over the projects
Payment Security Mechanism in terms of Letter of Credit, Escrow Arrangement and Third
Party Sale
1.7.2 Distribution
In principle approval accorded for 90 projects with an outlay for Rs.1588 crore to strengthen
the distribution system in urban areas.
More than Rs.2030 crores utilized under APDRP for strengthening & up gradation of
electricity distribution network.
Incentive for cash loss reduction has been disbursed to Kerala, Punjab and West Bengal.
Andhra Pradesh, Goa, Himachal Pradesh, Punjab, Gujarat, Meghalaya, Chattisgarh and West
Bengal have reported profits during 2005-06. Jharkhand, Madhya Pradesh, Haryana,
Rajasthan, Uttaranchal, Karnataka, Kerala and Assam have reported reduction in losses
during 2005-06.
Andhra Pradesh, Goa and Tamil Nadu have AT&C losses below 20% during 2005-06.
Punjab and 2 DISCOMs of Gujarat (Madhya & Uttar) have AT&C losses below 25%
during 2005-06.
Action plan prepared for franchising in urban areas to reduce AT&C losses and improve
efficiency in distribution. Maharashtra, Rajasthan and Madhya Pradesh have invited tenders
for franchisee in urban areas. The first urban franchisee has been awarded by Maharashtra in
Bhiwandi town.
5304 engineers of State distribution utilities were trained under Distribution Reforms
capacity building program.
Started the Advanced Certificate Programme in Distribution Management in collaboration
with IGNOU, about 1212 have registered so far.
1.8 Privatization
Many countries facing high electricity demand growth favor privatizing their electric power
sectors and opening their markets to foreign firms. This approach can free up large amounts
of public capital, which can be used instead for social programs. In addition, private
ownership allows managerial accountability, market efficiency, and better customer service
while reducing government deficits and international debt. The reasons for electric utility
privatization are numerous and vary from country to country.
In 1991, the Government began to encourage private sector participation in the power
industry. Since this date, a total capacity of approximately 7,400 MW from 37 private power
plants has been commissioned. As of March 31, 2006 an additional capacity of around 4,500
MW from 12 projects is reported to be under construction. Orissa was the first state in the
country to privatize the state's electricity distribution. This was followed by the privatization
of Delhi Vidyut Board. Various other states including Uttar Pradesh, Haryana, Karnataka,
Andhra Pradesh, Madhya Pradesh, Delhi and Rajasthan have restructured their boards into
separate entities for generation, transmission and distribution. Some states are also attempting
to corporatize the former SEB entities.
Reliance Energy Limited and Tata Power Limited dominate the private sector.
Tata Power, with a generation capacity of 2278 MW. Tata Power recently bagged
4000 MW UMPP contract.
Reliance Energy has a 933 MW of generation capacity.
GMR Infrastructure Limited with a combined generation capacity of 420 MW and
an additional 389 MW plant to be commissioned in the near future is another
serious private sector participant.
1,47,715.51 100%
In India, the power sector is controlled by ministry of power; some targets are established to
minimize the electricity deficit and the future expectation of need of power. These plans are 5
yearly and some details of last 4 five years plan are summarized below?
Source: powermin.gov.in
Renewable energy sources include Small hydro project, Biomass project, Biomass power,
urban and industrial water power, renewable sources.
Thermal 6,48,479
Hydro 19,000
Nuclear 1,15,468
Total 7,89,511
Source:: powermin.gov.in
All the Regions in the Country namely Northern, Western, Southern, Eastern and North-
Eastern regions continued to experience energy as well as peak power shortage of varying
magnitude on an overall basis, although there were short-term surpluses depending on the
season or time of day. The energy shortage varied from 4.4% in the Eastern Region to 16.0%
in the Western Region. Region-wise picture in regard to actual power supply position in the
country during the year 2008 -09 in energy and peak terms is given below:
Energy Peak
Require Availabi Surplus/ Require Availab Surplus/
Region ment lity Deficit(-) ment ility Deficit (-)
MU MU MU % MU MU MU %
North- Eastern 9,407 8,134 -1,273 -13.5 1,820 1,358 -462 -25.4
Source: powermin.gov.in
1.15 Expected Surplus/Deficit in year 2009-10 (Region wise)
Energy Peak
Require Availabil Surplus/ Deficit(-) Requirem Availabi Surplus/ Deficit
Region ment ity ent lity (-)
MU MU MU % MU MU MU %
***************
2: COMPANY PROFILE
*Consistently rated ‘Excellent’ for its overall performance against the targets set in
Memorandum of Understanding (MoU) by the Government of India (GoI) since 1993-94.
*Nav-Ratna Public Sector Undertaking.
*Ranked among the top 10 PSUs for the last four years.
*Employee profit stands at Rs.3.9 crores per head.
Realization 99%
Networth
15000
8688 9605
10000 8043
5962 6466
5000 Networth
0
FY 05 FY 06 FY 07 FY 08 FY 09
Resources FY 09 FY 08
Amount % Amount %
2.13.1 Accomplishments:
First Developmental Financial Institution to introduce Operational and Financial Action
Plans to improve efficiency in the State Power Sector.
Long term financial resources to the power sector from multilateral agencies channeled
through PFC.
Tapped international financial markets to raise ECBs, setting benchmark rates for
Indian corporate.
Complementing the efforts of Govt. of India, for its sponsored programmes
Accelerated Generation & Supply Programme and Accelerated Power Development
& Reform Programme.
Introduced new tailor-made products and services like debt re-financing, interest
restructuring, funding to equipment manufacturers, short term loans, buyers' line of
credit and loans for asset acquisition.
***********
Project Appraisal of thermal power project: 2x660 MW Coal Based Super critical
Thermal Power Project.
3.2 Methodology:
Project Appraisal: To evaluate the project rating and conducting the feasibility report
of a project based on the DPR/information memorandum/application form and other
related materials submitted by the borrower.
Assesses the capital needs of the business project and how these needs will be
met.
Calculation of DSCR, IRR and sensitivity analysis.
Calculating the cost of generation and relevance.
Entity Appraisal: To assess the financial health of organizations that approach PFC
for credit for power projects. This would entail undertaking of the following procedures:
Analysis of past and present financial statements
Examination of Profitability statements
To assess the suitability of the company for disbursement of credit. This would
involve the following actions:
Quantification & Assessment of risks
*************
4.1 Project Finance: Project financing is an innovative and timely financing technique
that has been used on many high-profile
high profile corporate projects, including infrastructural and
power. Employing a carefully engineered financing mix, it has long been used to fund large large-
scale natural
tural resource projects, from pipelines and refineries to electric
electric-generating
generating facilities
and hydro-electric
electric projects. Increasingly, project financing is emerging as the preferred
alternative to conventional methods of financing infrastructure and other lar
large--scale projects
worldwide.
Project Financing discipline includes understanding the rationale for project financing, how
to prepare the financial plan, assess the risks, design the financing mix, and raise the funds. In
addition, one must understand the cogent analyses of why some project financing plans have
succeeded while others have failed. A knowledge
knowledge-base
base is required regarding the design of
contractual arrangements to support project financing; issues for the host government
legislative provisions, public/private infrastructure partnerships, public/private financing
structures; credit requirements of lenders, and how to determine the project's borrowing
capacity; how to analyze cash flow projections and use them to measure expected rates of
return; tax
ax and accounting considerations; and analytical techniques to validate the project's
feasibility.
Project finance is different from traditional forms of finance because the credit risk associated
with the borrower is not as important as in an ordinary lloan oan transaction; what are most
important are the identification, analysis, allocation and management of every risk associated
with the project.
Project finance is the financing of long-term
long infrastructure and industrial projects based upon
a complex financial structure where project debt and equity are used to finance
nance the project.
Usually, a project financing scheme involves a number of equity investors, known as
sponsors, as well as a syndicate of banks which provide loans to the operation. The loans are
most commonly non-recourse loans, which are secured by the project itself and paid entirely
from its cash flow, rather than from the general assets or creditworthiness of the project
sponsors. The financing is typically secured by all of the project assets, including the
revenue-producing contracts. Project lenders are given a lien on all of these assets, and are
able to assume control of a project if the project company has difficulties complying with the
loan terms.
Generally, a special purpose entity is created for each project, thereby shielding other assets
owned by a project sponsor from the detrimental effects of a project failure. As a special
purpose entity, the project company has no assets other than the project. Capital contribution
commitments by the owners of the project company are sometimes necessary to ensure that
the project is financially sound. Project finance is often more complicated than alternative
financing methods. It is most commonly used in the mining, transportation,
telecommunication and public utility industries.
Risk identification and allocation is a key component of project finance. A project may be
subject to a number of technical, environmental, economic and political risks, particularly in
developing countries and emerging markets. Financial institutions and project sponsors may
conclude that the risks inherent in project development and operation are unacceptable
(unfinanced able). To cope with these risks, project sponsors in these industries (such as
power plants or railway lines) are generally completed by a number of specialist companies
operating in a contractual network with each other that allocates risk in a way that allows
financing to take place. The various patterns of implementation are sometimes referred to as
"project delivery methods." The financing of these projects must also be distributed among
multiple parties, so as to distribute the risk associated with the project while simultaneously
ensuring profits for each party involved.
4.2.2 Technical Feasibility: Technical feasibility analysis is the systematic gathering and
analysis of the data pertaining to the technical inputs required and formation of
conclusion there from. The availability of the raw materials, power, sanitary and
sewerage services, transportation facility, skilled man power, engineering facilities,
maintenance, local people etc are coming under technical analysis. This feasibility
analysis is very important since its significance lies in planning the exercises,
documentation process, and risk minimization process and to get approval.
4.2.3 Financial feasibility: One of the very important factors that a project team should
meticulously prepare is the financial viability of the entire project. This involves the
preparation of cost estimates, means of financing, financial institutions, financial
projections, break-even point, ratio analysis etc. The cost of project includes the land
and sight development, building, plant and machinery, technical know-how fees, pre-
operative expenses, contingency expenses etc. The means of finance includes the
share capital, term loan, special capital assistance, investment subsidy, margin money
loan etc. The financial projections include the profitability estimates, cash flow and
projected balance sheet. The ratio analysis will be made on debt equity ration and
current ratio.
4.2.4 Commercial Appraisal: In the commercial appraisal many factors are coming. The
scope of the project in market or the beneficiaries, customer friendly process and
preferences, future demand of the supply, effectiveness of the selling arrangement,
latest information availability an all areas, government control measures, etc. The
appraisal involves the assessment of the current market scenario, which enables the
project to get adequate demand. Estimation, distribution and advertisement scenario
also to be here considered into.
4.2.5 Economic Appraisal: How far the project contributes to the development of the
sector; industrial development, social development, maximizing the growth of
employment, etc. are kept in view while evaluating the economic feasibility of the
project.
4.3 Calculation of tariff: The tariff for supply of electricity from a thermal generating
station shall comprise two parts, namely, capacity charge (for recovery of annual fixed
cost consisting of the components) and energy charge (for recovery of primary fuel cost
and limestone cost where applicable).
4.3.1 Annual Fixed Cost: The annual fixed cost (AFC) of a generating station or a
transmission system shall consist of the following components
Return on equity: 15.5% tax free return on total equity. Only 30% of the project cost
can be treated as equity.
Interest on loan capital: Year to year loan interest is calculated on full debt amount
by weightage average rate of interest.
Depreciation: Depreciation up to 90% of the capital cost of asset is
allowed.Depreciation shall be calculated annually based on Straight Line Method and
rate defined in CERC guidelines.
Interest on working capital: Working capital shall include
Cost of coal or lignite and limestone, if applicable, for 1½ months for pit-head
generating stations and two months for non-pit-head generating stations.
Cost of secondary fuel oil for two months.
Maintenance spares @ 20% of operation and maintenance expenses.
Receivables equivalent to two months of capacity charges and energy charges for
sale of electricity.
Operation and maintenance expenses for one month.
4.3.2 Energy Cost: It is also calculated on norms of CERC, the yearly consumption of
primary fuel and secondary fuel is taken for the calculation
** Other parameters like escalation, discounting, exchange rate are taken as per latest
CERC norms.
********
“Offering credit is an operation fraught with risk. Before offering credit to an organization,
its financial health must be analyzed. Credit should be disbursed only after ascertaining
satisfactory financial performance. Based on the financial health of an organization, PFC
assigns credit ratings. These credit ratings are used to fix the interest rate, exposure limit and
security criteria.”
5.1 Entity Eligibility Criteria: While considering the eligibility of an entity, last two year
Auditor’s report and notes to annual accounts along with Income tax assessment order for
last three years be also examined. Type of securities and mode of repayments is also to be
suggested by the help of entity rating.
5.2 Statutory Clearances: All statutory clearances requires at Central/State level for the
implementation of the project are to be ensured. Depending on the cost of project, techno
economic clearances of CEA/SEB may be asked.
5.3 Cost Estimate: The base date for estimation of cost shall not be more than six month old
at the time of talking up the project for appraisal. Physical contingencies shall be limited
to 3% of the base cost and the price contingencies provision of 7%, 12%, 16%, 19% and
22% shall be made depending on the project completion period of 1,2,3,4 and 5 years as
per PFC guidelines. Also IDC, to be considered to arrive at project cost.
5.4 Project Cost-Benefit Analysis: Calculate FIRR and EIRR. Techno-economically sound
with FIRR and EIRR not less than 12%. Sensitivity analysis is also done.
5.5 Integrated project Rating: The project is evaluated on various parameters and then
ranked according to the PFC guidelines. The method is explained later on.
***********
Submit the application in prescribed format and replicate for financial assistance
In every project finance deal, where everyone’s financial security rests on the future
performance of a new undertaking, a thorough analysis of the project’s finances under a
arrange of assumptions is prerequisite for arranging debt and equity funding, financial model
play a crucial role in decision-making.
6.1 Steps taken for designing a model: The essential steps to be taken for designing a
financial model for any infrastructure project financing through private participation are
as follow:
Determining the scope of the project and the related EPC cost.
Determining other expenditure such as Development expense, Preliminary &
Preoperative expenses, financial costs, etc.
Determine the total Cost of the project with interest during construction.
Assessment of tariff in order to determine revenue potential for the project.
Determine O&M cost through the concession period.
Calculating the fixed and variable cost relating to the project.
Financial analysis to determine the most efficient means of financing.
6.2 Purpose and uses of financial model: The financial model provide a basic analysis,
usually based on relatively raw, preliminary data and simplified financing assumptions, to
establish weather a given project is worth pursuing further. The required output may be:
Basic Project IRR
Debt service Coverage Ratios and other debt ratios.
Establishing a financial structure that is sustainable by the project.
Reassuring lenders and investors as to the attractiveness of the deal as a home for
their funds.
An indication of tariff levels required for achieving appropriate returns.
Preparation of sensitivity analysis.
************
The integrated rating exercise is carried out at the end of the detailed appraisal of projects.
The integrated rating model is intended for arriving at a relative measure of merit for the
project. The integrated rating model involves:
1. Entity rating
2. Project rating
3. Integrated rating: Through combination of above two.
Analysis and critical comments on the strength and weakness of organization, management,
its working result, financial position etc. are made on the basis of organization set up,
capital/financial structure, operating/working results, credit worthiness, financial result, entity
related risks and mitigation measures proposed. Power Sector entities are evaluated with
reference to a set of qualitative and quantitative factors to arrive at the Aggregate Entity
Score. In addition to the performance parameters, milestones giving weightage to core reform
activities have also been included in the overall grading mechanism. Both the public and
private entities are evaluated separately on different set of measures.
8.1.1 Policy of State/Central Sector Entities: These entities are ranked on the basis of
following parameters
EXTERNAL FACTORS:
State Government support (equity, subsidy, etc.)
Formulation of Business Plan/FRP
Implementation of Electricity Act 2003 – Corporatization of entities
Regulatory safeguards of SERC
Investment support from State government (equity)
INTERNAL FACTORS:
Reduction trend between Average Revenue and Average Cost of supply
DSCR, Net worth
Receivables, AT&C Losses
Debt servicing record
PLF/Plant Availability
Availability of Audited Annual Accounts
Capacity Addition / Increase in Capital expenditures
Metering (DISCOMS), Payables (DISCOMS)
These milestones/parameters have been classified as External and Internal Factors with
following score allocation:
Factors Scores
Total 100
Categorization of Entities:
The Aggregate Entity Score is used for categorization of entities. For this purpose the
prescribed score is as under:
The assessment of the score is done through the detail study of the entity and evaluating the
score with the help of some set of standards as per the model. Some set of parameters are
DSCR>1, Subsidy by government, Payment mechanism, PLF>80%, AT&C losses<20%,
Average cost of supply<1.50 RS. Then the further allocation is done on pro-rata basis.
Any current default with Banks/ FIs has an override over any rating obtained through the
above procedure.
8.2 Scoring
Quantitative Factors:
The scoring of all the factors is on a six- point scale, with 6 being the best and 1 being the
worst. It involves analysis under 2 categories:
Business analysis
Financial flexibility
Business Analysis:
Business analysis evaluates the performance of the present business of the promoters. The
analysis involves evaluation of the market position and financial position of the company
along with a view on management expertise and integrity of the promoters.
The parameters and factors used in business analysis have been enumerated below:
Market Position (20%)
Here relative market share of the company is determined. It is calculated as the ratio of the
turnover of the promoting company divided by the turnover of the market leader in the
business. In case of diversified companies the same process is repeated for each division.
Financial Risk (80%)
Means of Attribute
Ratios Wt
Scoring
Return on
Return on Capital Employed 20% Quantitative Investment
Profitability of
Operating margin 20% Quantitative the Business
Here, Capital Employed = (Capital + Reserves + Short term debt + Long term debt –
Revaluation reserves –Capital work in progress)
ROCE is scored as a simple average of the last three years but if the latest ROCE is lower
than one for the preceding year then the latest ROCE should be used for calculation instead of
the average.
Operating Margin
OM = Operating Profit before Depreciation, Interest and Taxes/ Income from operations
After preliminary appraisal, a detailed appraisal is taken place according to the following
process:
Risk Parameters Weightage Means of Scoring
Industry Risk: The industry risk score measures the competitiveness of the industry in
which the promoting company is operating. The industry factor would be a qualitative factor
to be scored on a six-point scale. The industry expertise for scoring the industry risk factor
can be developed internally or alternatively the score for the industry risk can be outsourced
from an independent agency.
Financial Risk: In detailed evaluation, the projections of future financial performance are
also evaluated with past financial performance. The projections for the next two years are
taken into account. The above five ratios are keeping same in both the cases. But the ratio in
their past and future is as follow:
Ratios Weightage
Accounting Quality: This factor is use to penalize companies with poor accounting quality.
Good Quality 2
Average Quality 1
Poor Quality 0
Financial Flexibility: It is used to judge the ability of promoters to financially manage the
project. Thus, key points evaluated are:
Ability to contribute equity to the project
Ability to bring the project to financial closure
Ability to fund temporarily funding mismatches
Equity Funding Potential: A Promoting company can contribute equity to the project by
raising debt on its books or raising equity or through cash surpluses in the books.
The aggregate amount that can be raised by the above methods as a percentage of the equity
contribution of the company is compared to the benchmark to arrive at a score on a six-point
scale.
Bridge Financing Ability: This parameter basically judges the ability of company to fund
short term cash flow imbalances in the project. This attribute is useful to prevent delay in
project implementation due to small disbursals from the institutions.
Cash surplus = cash flow from operation + marketable securities
Here, Cash flow from Operations = PAT + Depreciation + Non Cash Expenses in Working
Capital Requirements.
In this quarterly cash surplus of the promoting company is calculated as a proportion of the
project cost of the company and comparing it with the benchmark to arrive at a score on the
six point scale.
Track Record of Fund Raised: This technique is basically used to judge the promoter’s
ability to achieve financial closure and tie up funds for the project. This factor is scored by
comparing the aggregate fund raised in the last ten years as a proportion of the project cost
with the benchmark, to arrive at a score.
Aggregate Project Cost: This factor evaluates the ability of the promoters to manage new
project. Scoring is done by comparing the aggregate cost of the project implemented by the
promoting group in the last years as a proportion of the cost of the present projects with the
benchmark, to arrive at a score.
Quantitative Factor Grade: Thus various scores obtained from various parameters are
multiplied by their respective weights (weights are predefined by the scoring authority) to
come at final score. The benchmark of scores for the different grades is given below:
2.0 –2.75 V
2.75 – 3.50 IV
4.25 – 5.00 II
Qualitative Factors
The scoring of all the factors is on a four-point scale, with 4 being the best and 1 being the
worst. The factors are judgmental and the model provides broad guidelines for the evaluation
for the same. It involves analysis under two categories:
Management risk (40%)
Management past experience (60%)
Management risk: It evaluates two factors:
Attribute being
Ratio Wt Means of Scoring evaluated
Competency in running
Managerial competency 20% Qualitative the business
Management Competency: It is based on the quality of past decision making as well as the
general efficiency of company’s system and procedures. Educational qualifications may serve
as one of the tool.
Business and Financial Policy: It is based on past business and financial policies. These are
indicative of possible future strategies, and have a bearing on future debt bearing levels.
Expansion strategies of company in comparison to existing size of the firm are used as a
measure of risk taking ability of the company. Moreover large one time expansion is seen as
less favorable option and that too in diversified businesses.
All other factors of experience in power sector and experience in setting up projects, is
evaluated at an aggregate level in the management experience category.
Management experience of the promoting group: The key factors evaluated are:
Experience in Power Sector: Companies having past experiences in power generation,
transmission, power generating equipment supply and other associated activities of powers
sector would be considered eligible for being accorded marks under this head. Other issues
like period of experience, management teams, and depth of expertise will also make an
impact. The exact marks are left to the discretion of the appraising officer.
Expertise in Setting up Projects: Here due weightage will be given to:
Managing projects of like size should be given higher weightage
Core sector projects include infrastructure projects and projects in other industries like
cement, steel etc should be accorded higher weightage than in non-core project.
Experience of past ten years will be taken into account while scoring.
Experience in India/Developing Countries: This factor is used to evaluate the exposure of
promoting company in developing countries and specifically in India. As previous experience
of working in Indian conditions and dealing with various regulatory and government entities
helps in getting project clearances faster and also helps in managing various other stake
holders in the project.
Project Preparedness of the Promoting Group: This is promoter’s preparedness to execute
the project while approaching PFC. The progress of the project, clearance from various
regulatory authorities etc parameters are taken in consideration. This factor is again
subjective.
There is a model used for measuring the score and categorizing the entity on their score, the
benchmarking is fixed on the basis of practical knowledge and it is reviewed from time to
time. The benchmarking includes various ranges of input parameters and their relative score,
which are helpful in summation of total score.
The past track record, company’s ability to raise fund, the operating profit and market
position are assessed through the various score and then the relative score are assigned. The
quantification of various parameters is done by some set of standard ratios. The score are
then passed on the two legs qualitative factors and quantitative factors.
The various scores are summed up and grading from A to D is done on qualitative factors.
Means of Attribute being evaluated
Ratio Wt
Scoring
Experience in the power sector 30% Qualitative Power sector experience
WORST D
C
B
BEST A
Final Output
A matrix having two legs of qualitative and quantitative parameters is formed and based on
their score and grade, entities are ranked from 1 to 6. In this the qualitative grade is then
combined with the risk grade (Grade I to Grade VI) obtained from the quantitative analysis
by way of a matrix to give the final grade.
The matrix formed is as follows:
I 1 1 2 3
QUANTITATIVE
II 1 2 3 5
GRADING
III 2 3 4 6
IV 2 4 5 6
V 5 5 6 6
VI 6 6 6 6
Here, IA, IB, IC, IIA, IIB, IIC, IIIA, IIIB, IIIC, IVA and IVB are considered as investment
grade, while other grade combinations are considered as speculative grade.
The degree of safety with reference to the above rating is given in Annexure-I.
The project is rated against a set of qualitative and quantitative parameters. The qualitative
parameters being Cost/MW, first full year of generation, levellised cost of generation and
DSCR. The qualitative parameters are type of implementation structure, security of fuel,
power sale agreement and satisfactory operation and maintenance.
The weightage of parameter in calculating the score of qualitative and quantitative parameters
is assigned on the company norms and policies.
The upper and lower limits of qualitative and quantitative parameters are fixed and then on
basis of pro-rata basis, assigning of rank is done. The parameter’s point and their allocation
are also discussed on the set of standards.
Quantitative Parameters:
First full year cost of generation w/o RoE: A range of 1.9-2.75 is taken as standard
and then allocation of score is done on that basis.
Levellised tariff/ cost of generation with RoE and tax: 2.35-3.50 is a set of standard
range and then scoring is further allocated.
Average DSCR: Less than 1.0 is taken as bad condition of loan recovery while the
value greater than 1.0 is rated high.
Qualitative Parameters:
Power off take
o IPP- Status of PPA & PSM and/or Captive- Payment Security Mechanism
o Buyers rating
Fuel supply
o Long term agreement
o Short term agreement
o Captive Coal mine
o Transportation facility
Construction Contract
o Warranty
o Market standard
o Performance
Type of contract and bidding
o Competitive Bidding
o Equipment Supplies
Experience of the EPC contractor
Commercial terms of Contract
O&M
o Past Experience
o Management Team and efforts
Weightage to different parameters are placed in Annexure-II. The criteria of two parameters
are evaluated, assessed and quantified on the above factors, there is a set of scoring range
and on the basis of that model project is ranked.
The quantitative parameters are quantified on the basis of type and quality of contract and
their competitiveness. The past experience in the same sector and their present status helps in
evaluating these parameters. There is a fixed set of standards and on the basis of them the
score is measured. The contractor and terms and conditions of the contract is also one part of
standard.
The qualitative and quantitative parameters form two axes of a matrix and depending on the
score in each parameter. The above project rating model enables rating of the project from P1
to P6. P1 being the best and P6 the worst (rejection grade). The entity rating procedure which
rates the promoter/s of entity from E1 to E6, is then combined with the project rating model
to produce the integrated rating from 1 to 6, 1 being the best and 6 the worst (rejection level).
39-44 P1 P2 P2 P3 P5 P6
33-38 P2 P2 P3 P4 P5 P6
27-32 P3 P3 P4 P4 P5 P6
20-26 P4 P4 P5 P5 P5 P6
0-19 P6 P6 P6 P6 P6 P6
With the help of detailed analysis of the entity and project parameters, these two scores are
combined with their corresponding ranking (the project rating is combined with entity rating)
to arrive at the integrated matrix. With project rating and entity rating forming the two arms
of the integrated rating is assigned based on the relative position of a project proposal in the
matrix.
P3 2 2 3 3 4 6
P4 3 3 3 4 5 6
P5 3 4 4 5 5 6
P6 6 6 6 6 6 6
Any loan proposal getting a composite rating of 6 is proposed to be rejected. All other rating
(i.e. 1-5) is sought to be suitably captured in an exposure/interest rate matrix as placed below,
and financial support will be considered accordingly. Terms and conditions for the sanction
and disbursement are decided on the basis of integrated composite rating.
8.4 Linkages of integrated rating with interest rate, exposure limit and security with
reference to PFC policies:
The following methodology is proposed for linkages Interest rate, exposure limit and
requirement of collateral securities to integrated rating model.
Project exposure is primarily decided by the category of the project in the line with OPS. As
per the existing policy, additional project exposure is allowed based on the entity grading.
5 Nil
Rejection
6
The exposure in single project should not be more than 50% of the project cost.
The policy guideline for requirement of Collateral Securities depends upon the PFC condition
as a lead FI or not. In case of lead FI the detail is placed in Annexure-III. In case of PFC is
not leading FI, the collateral securities requirement would be considered on case to case
basis, prescribed by Lead FI/Bank.
The detail about the interest rate, exposure limits and collateral securities under OPS norms
and prudential norms for different entities are discussed in Annexure-IV.
9: CASE STUDY
The location is not in environmentally fragile area. The closest airport is about
150 kms far from site thus reducing any flight hazard because of chimney
height
Near round availability of water from the perennial river which is located
about 20 km from the site.
The site is well connected to coal mines, Port and Airport by Railways and by
State/National Highways.
9.1.3 Land
The land requirement of the Proposed Project is about 305 Ha. The break up of the land
requirements is as follows:
Ash Dyke 70
Water Reservoir 40
Railway Siding 30
Housing Colony 50
Green Belt 50
The site identified for the Project is primarily industrial corporation land with some areas of
agriculture land (Single crop) and other of forest land. The land will be on lease from MIDC
for 95 years, renewable for further term of 95 years. The Company has paid Rs. 8.53 Crore
towards allotment of land and development works.
The Company proposes to use the allotted land for setting up Main Power Plant, water
reservoir and Ash Dyke requiring about 175 Ha. The remaining allotted land, about 29 Ha,
would be used for Green Belt development.
The balance land of about 101 Ha, required for Township (50 Ha), Railway Siding (30 Ha)
and balance green belt (21 Ha), would be acquired by the Company in due course. The
balance land would be acquired at an estimated cost of Rs. 5.44 Crore.
The site development for the Proposed Project site, covering levelling, boundary wall,
internal and approach roads and other miscellaneous requirements, is estimated to cost about
Rs. 25.50 Crore.
The water steam cycle essentially contains the coal fired steam generator, the steam turbine
with condenser, feed-water tank, low-pressure (LP) heaters and high-pressure (HP) heaters
and the connecting pipelines. The superheated steam produced in the steam generator is
supplied to the steam turbine, which drives the three-phase AC generator. After leaving the
HP turbine, the steam is reheated in the steam generator and fed to the Intermediate Pressure
(IP) turbine. In the LP turbine the steam coming directly from the IP turbine expands to
condenser pressure and is condensed in the condenser.
Closed cycle water system is used for cooling of the condenser. The condensate collected in
the condenser hot well is discharged by the condensate pumps and supplied via the LP
condensate heaters into the feed water tank. The feedwater is further heated by bled steam
from turbine and dissolved gases from the feed-water are liberated. The boiler feed pumps
discharge feed water from the feed-water tank via the HP heaters to the economizer.
Steaming starts from this point onwards. The high temperature steam-water mix is further
converted into steam in water walls and finally passed through the superheaters sections for
converting the saturated steam into superheated steam.
The power station would be designed with two power generating units of 660 MW each,
along with the auxiliaries and common utility services like plant water system, coal handling
system, ash handling plant, and switchyard for power evacuation, plant electrical system and
workshop.
The main sections of the power generating unit include Steam Generator along with milling
system and electrostatic precipitator, integral piping, integral control system, turbine and
generator unit, boiler feed pump, regenerative heaters, condensate extraction pump,
circulating and auxiliary cooling water pumps and the generator transformer with bus duct.
The main sections of the utility system are the coal handling system, ash handling system,
fire fighting system, AC & Ventilation system, switchyard and the plant water system.
The main generating equipment will consist of two Steam Turbo Generators (STG) and two
Pulverized Coal Fired Boilers (PCFB.). The power generated at lower voltage would be
stepped up to 400 KV and will be connected to the proposed 400 KV switchyard for dispatch.
Plant costs are comparable for both the technologies. However, overall economics for super
critical technology are more favorable because of the increase in cycle efficiency. Economic
performance is also influenced by other factors, including plant availability, flexibility of
operation and auxiliary power consumption. The once-through boiler design used in super
critical technology based plants is inherently more flexible than drum designs used in sub-
critical technology based plant, due to fewer thick section components allowing increased
load change rates. Typical average availability of super critical technology based power
plants is about 85%. However, with appropriate design and materials, a plant availability of
>90% is achievable. Efficiencies of supercritical power generation are also less affected by
part load operation, with efficiency reductions less than half those experienced in subcritical
plant.
The major environmental benefit of supercritical power generation is from reduced coal
consumption per unit of electricity generated, leading to lower CO2 and other emissions. CO2
emissions for supercritical plant would be 17% lower than for a typical subcritical plant.
Similarly, all other emissions e.g. NOx and SOx, would also be reduced pro-rata with the
reduction in coal consumption.
However, for optimum environmental performance, supercritical power generation
technology can benefit from advanced emissions-control technologies to minimize harmful
emissions. These include flue gas desulphurization (FGD), low-NOx combustion, selective
catalytic reduction (SCR), selective non-catalytic reduction (SNCR), air staging and reburn
technologies.
The lower CO2 emissions from super critical plants are quantifiable and the project can be
registered as a CDM project for accruing CERs which can be traded with international
markets. This can potentially work as an additional revenue stream for the project.
Ministry of Coal has allotted the Coal Blocks to the company for use in the Proposed Project.
The Company is in process of finalizing the mining plan. These blocks are expected to have
extractable coal reserves of 169.832 MT and the break-up is given as below.
The average calorific value of the coal is expected to be about 4895 kcal/kg. Considering this
Gross Calorific Value and PLF of 85% the coal requirement of the Project works out to be
about 4.12 MTPA.
The cost of mining of coal is estimated to be Rs. 750 per ton (in the year 2011-12) including
Royalty, Stowing Excise Duty and Local Area & Environment Cess. The coal cost is
escalated at 5% p.a. to account for inflation for the input factors for mining of coal. The
Company proposes to carry out the mining by itself. Therefore, any savings in the cost of coal
will get reflected in lower cost of generation of power from the Project.
The Company has estimated the capital investment of Rs. 400 Crore for open cast mine
development and the same has been incorporated in the overall Project Cost.
The distance of Coal Blocks from site is about 260 km. The coal will be transported from
mines by rail in rake loads in Box/Box-N wagons through rail network to Project site. Coal at
mines end would be loaded from bunkers / silos to the wagons through flash loading system
and unloaded at the plant by wagon tipplers to optimize on turn around time.
For transportation of coal, the Company would enter into Coal Transportation Arrangement
(CTA) with the Indian Railways. The transportation cost as estimated by the Company is Rs.
250 per ton of coal (in the year 2011-12), which includes the loading, unloading and handling
cost. Further, escalation of 5% has been assumed on the transportation cost of coal from
2011-12 onwards.
9.1.9 Water
The total consumptive water requirement is estimated to be 5000 m3 per hour for the
Proposed Project. The Company has already received Letter of Intent from Water Resources
Department (WRD), for allocation of 2.5 Lacs m3/day (10,417 m3 per hour) of water from
River. To ensure year-round availability of water to Project, the Company proposes to build
barrage/dam, where the adequate quantity of water will be stored.
The overall cost of water arrangement as estimated by the Company is about Rs. 205.83
Crore and has been considered in the Project cost.
Complete design and execution of the Civil, Structural and Architectural work
of the Main Power Block, including Cooling towers, RCC chimney, Various
Pump house building, storage tanks, CHP, AHP, internal roads and drains etc.
along with some general facilities.
The Company may choose to implement the Project through package contracts, which will be
awarded to reputed vendors though competitive bidding process as it entails savings in cost.
The final decision will be based on the detailed evaluation of both the options. The cost
estimates are, however, based on the EPC method.
Company has executed EPC Contract for its 2X660 MW Supercritical power project with a
Chinese EPC Contractor, in September 2007. The EPC Contract was split into two parts- one
for Supply and other for Erection and Commissioning.
The O&M team of the power station would be headed by a Senior Vice President,
under whom separate groups viz. Operation, Mechanical, Electrical, Civil and C&I
maintenance would operate. In addition to these groups, operation and efficiency
improvement group and maintenance planning group would monitor the efficiency in
operations and maintenance management respectively and suggest continual
improvements.
9.1.12 Utilities
Construction Power
The requirement of power for construction at site would be sourced from the 33KV
substation of State Discom which is about 10 km from the Project Site. The Company
proposes to obtain power from Express Feeder during construction. The consumers which are
connected on express feeder are exempted from load shedding by State Discom ensuring
continuous supply of power for the Proposed Project. Further, there is 11 KV connection
already existing at the site to meet initial requirement of power.
Construction Water
The requirement of construction water for potable and service purposes will be met by the
existing 2.2 MLD Water Treatment (WT) Plant located within the allotted land for the
Project. The Company has taken over the Water Treatment Plant along with pipeline,
elevated water reservoir, office building etc and paid about Rs. 3.42 Crore for the same.
9.1.13Evacuation of power
Power Evacuation from the Project would be at 400 KV level. There are 400 KV
substations of State Transmission Company which can be utilized to dispatch power to
State Distribution Company. Similarly, there are four 400KV substations of PGCIL at
which can be used to dispatch power to consumer in other states.
The Company proposes to sell about 746 MW gross power output (i.e. 56.50% of
gross capacity) under the long term PPA to a Private Company BEL, a power trading
licensee.
The cost of both the transmission lines as estimated by the Company is about Rs. 316
Crore.
Further, the Company proposes (a) to get the system study done by PGCIL & State
Transco (b) obtain open access permission along with BEL (c) obtain necessary
permissions, clearances for transmission line in due course of time.
Some features of the Project addressing the environmental concerns are as follows.
The stack height of 275 m is proposed to limit the ground level concentration
of pollutants (SOx, NOx etc).
Adequate green belt would be developed in and around the Project area and the
ash disposal area satisfying the requirement of State as well as Central
Pollution Control Board.
The Company has applied for Environmental Clearance and for NOC from Pollution
Control Board.
Particulars Completion
It may be noted that the above-mentioned schedule is tentative and the final schedule will be
firmed up on award of the turnkey EPC contract.
**********
Township 50
Pre-operative Expenditure 80
Contingencies 145
Land requirement for the Project is about 305 Ha. The Company has already acquired about
204 Ha Land on 95 years Lease. The Company has applied to State Govt. for allotment for
additional 101 Ha land for the Project. The cost of land acquisition and site development is
estimated to be about Rs. 39.47 Crore.
Mining Cost
The Company plans to carry out mining by itself for which Company proposes to install
equipment and systems required. The requisite equipments and system will be procured and
installed by one of the reputed vendor and the contract for the same would be awarded though
competitive bidding process. The capital expenditure for mining as estimated by the
Company is about Rs. 400 Crore.
Land 81.00
Miscellaneous 7.00
The Company proposes to transport the coal from mines in wagons preferably owned by the
railways.
The coal transportation infrastructure required for the Project as estimated by the Company is
about Rs. 40 Crore.
Water Arrangement
The water arrangement for the Project involves building a barrage/dam, raw water pipeline up
to plant, pump house and a raw water reservoir. The water arrangement is estimated to cost
about Rs.205.83 Crore. The detailed breakup of the capital cost is asunder:
Total 205.83
Transmission Line
Transmission cost includes supply of transmission towers, earth wire, hardware fittings and
accessories for conductor, insulators and cost of ROU/ROW, land etc. to set up two double
circuit 400 KV transmission line. Total cost of transmission lines is estimated to be about Rs.
316 Crore.
Township
The Company proposes to develop a township for the employees of the Proposed Project.
The township will require about 50 Ha land, which has been included in the overall
requirement for the Project. Township will include the residential units, school, hospital,
community centre etc. Total cost of township development is estimated to be about Rs. 50
Crore.
Pre-Operative Expenses
Pre-operative Expenses are estimated to be Rs.81 Crore and include fees to be paid towards
technical studies conducted by owner’s engineer and lenders’ independent engineer, legal
expenses for fees payable to the lenders’ and owner’s legal counsel, insurance advisor’s fees,
appraisal fees, merchant banker’s fees, upfront fees to lenders, advisors fees, start up fuel,
employees recruitment, training and salaries, other expenses etc. A break up of the estimated
preoperative expenditures is as under:
Contingency
The Company proposes to implement the Project by way of a turnkey EPC contract which
will be a fixed price and fixed time contract. As contracts for the Project are not yet finalized,
the contingency provision of 2.5% of EPC Cost and 5% on non-EPC cost, amounting to
about Rs. 144.85 Crore has been made in the Project cost.
The interest during construction (IDC) period estimated at Rs. 1167 Crore has been
calculated assuming an implementation period of 39 months for Unit 1 and 45 months for the
entire plant from Notice to Proceed (NTP) to EPC contractor. The debt drawdown schedule
has been made with a provision for 35% equity being brought upfront, with the balance
coming pro-rata with the debt. Term Loan the rate of interest as applicable for rupee loan (i.e.
11.50%) has been considered.
Margin Money
The provision for margin money for working capital has been made at Rs. 103.79 Crore. The
margin money has been estimated at the rate of 25% of projected net working capital
requirement of Project in the first full year of operation. For the purpose of estimates, the
current assets comprising of receivables of 2 months, primary fuel stock of 1 month,
secondary fuel stock of 2 month, O&M expenses of 1 month and spares requirement equal to
20% of the O&M cost has been assumed.
The cost of the Project estimated at Rs. 7091 Crore is proposed to be financed with senior
debt and equity in ratio of 75:25. The proposed components of financing are as under. Equity
is broken in a ration of equity to sub-debt as 80:20.
Capital Contribution
1418.37
- Equity Capital 20%
Sub-debt Finance
354.59 5%
- Loan
Based on the total Project cost of Rs. 7091 Crore, including transmission lines and mining
cost, the per MW cost of the Project works out to Rs. 5.37 Crore. If we exclude the cost of
transmission line & mining and corresponding IDC, the Project Cost reduces to Rs. 5308
Crore and the per MW cost of the Project works out to be Rs. 4.02 Crore.
It may be observed that the cost per MW of the Project is competitive even with other thermal
power projects being developed using sub critical technology.
Selling Arrangements
The Company proposes to sell the power generated by the Project as under:
I. 80% of total installed capacity, power output under 15 years take or pay power
purchase agreement to BEL at quoted tariff.
II. Remaining power to be sold on merchant basis on the best available terms and
conditions from time to time. For financial projections for the Project, the tariff as
above has been assumed.
As per financial projections, the power will be generated at Levelized (25 years) cost of
generation of Rs. 2.61 per unit comprising Rs. 1.54 per unit towards fixed charges and Rs.
1.07 per unit towards variable charges. The cost of generation for the Project as per CERC
norms is estimated to be about Rs. 2.21 per unit comprising Rs. 1.42 per unit towards fixed
charges and Rs. 0.79 per unit towards variable charges.
The tariff of the Company is quite competitive because of captive coal mines. The cost of
generation is Rs. 1.93 per unit and the tariff works out to be Rs. 2.21 per unit considering
15.5% ROE (levelized for 25 Years). As per CERC norms, the tariff works out to Rs. 1.96
per unit comprising of Rs. 1.25 per unit as fixed charges and Rs. 0.71 per unit as variable
charges, with ROE of Rs. 0.25 per unit.
Pollution control Board State Pollution The Company has applied for the
NOC for Power plant Control Board clearance.
Land Availability State Government 204 Ha land has been already acquired.
The Company has applied for allotment of
balance 101 Ha of land.
Primary Fuel Ministry of Coal / Ministry of Coal has allotted Coal block to
Government of company for the use in the Proposed
India Project. Company proposes to get the
mining plan approval, mining lease.
The financial projections, based on the capital/project cost as specified by the borrower,
would be as below:
Particular Value
Parameters
DSCR
Minimum 1.10
Average 1.35
Maximum 3.34
The detail financial statements and cash flow statements, balance sheet are placed as
Annexure-VI.
Case 5: Increase in Interest Rate by 100 bps 1.42 1.02 16% 21%
The key assumptions underlying the profitability projections for the Project are detailed in
Annexure VI. Based on these assumptions key financial parameters for first eight years of
operations are given below. Detailed Profit & Loss Account, Cash Flow Statement, Balance
Sheet and DSCR Calculations as projected are given in Annexure VI.
The above financials have been worked out considering 85% PLF. Higher PLF would
improve the financials of the Project. From the above financial projections, it may be
observed that the Project is financially viable. It may also be noted that the average DSCR for
the Project debt is 2.08 while minimum DSCR is 1.63. The DSCR levels of the Project are
satisfactory. Further, Project IRR is 20.54% which seems adequate.
It may be observed from above mentioned results that Project financials are quite robust in
various scenarios and the DSCR levels are satisfactory.
b. Construction
2 Cost increase and price Package contracts are expected to have suitable
escalation safeguards and will be subject to LIE review. Also,
any increment in project cost would be met by the
promoters without recourse to either the project or
its lenders.
c. Post Construction
1 Fuel supply risk The Company has also got the captive mine
allotted for the Phase I of the project. The coal, if
available, from there can also be used for Phase
II.
Hence, fuel supply risk is perceived to be low.
7 Off take risk The Company would sell 1320 MW of net power
to State Discom through a long term PPA at a
levelized tariff of Rs. 2.61 per unit.
With CoG of approximately Rs. 2.21 per unit, the
off take of balance power, to be sold on merchant
basis, should not a problem.
11 Lower cost power producers With newer technology, the cost of energy
generated might be significantly lower than cost
of energy. Older plants, with depreciated assets
would also be able to compete with company.
Integrated Rating
The entity is rated according to the financials submitted by the company and evaluating
through the model.
Based on the model, the Promoters are evaluated and score is given on that basis
Promoter 1:- 5.36 {equity = 51%}
Promoter 2:- 2.56 {equity = 49%}
SPV Rank
Quantitative Score III
Qualitative Score B
Project Rating
Quantitative Parameters
Qualitative Parameters
4 O&M 20% 10 6
From the above scores the project is rated as P2 according to the matrix.
Integrated Project Rating
The grade combination of E3 (Entity Grading) and P2 (Project Grading) is overall Integrated
Rating 2.
The Project has been allocated Coal Blocks by Ministry of Coal for use in the Project.
The captive mines will be operated by the Company itself. This will ensure complete
control over the fuel supply and will also minimize the inventory costs, transportation
delays, shortages and leakages.
The captive mines allocated for the Project have good quality coal and the GCV of
coal is expected to be about 4895 kcal/kg. High GCV and control over mining costs
will ensure very competitive cost of generation at Rs.2.21 per unit and corresponding
tariff of Rs. 2.61 per unit (assuming 15.5% ROE).
The Project is located in severe power shortage region. State itself has been facing
severe power shortage and the power deficit is likely to continue in short and medium
term.
The Company has already acquired 204 Ha land which is adequate for the main power
plant block. The work on site may start immediately without any delay.
The Project is expected to be accorded Mega Power Status which will render various
cost benefits to the Project and will keep the cost of generation competitive.
The promoter group company, undertake to fund the cost overruns, if any, for the
Project. It also undertake to fund the increase in cost if Mega Power Status is not
granted to the Project.
Weaknesses
Opportunities
The Electricity Act 2003 and subsequent National Electricity Policy and Tariff Policy
have opened up several opportunities for the power sector. The Act allows the IPPs
and captive power producers open access to transmission system, thus allowing them
to bypass the SEBs and sell power directly to bulk consumers. Slowly open access in
distribution is also being allowed. These provisions will give credence to the concept
of merchant power.
With the advent of the era of competitive bidding for tariff for procurement of power,
the new capacities would not be subject to regulated tariff and regulated return of
equity and thus provide investment opportunities to Developers in the power sector
where returns would be market determined.
There is huge power deficit in the country and the demand supply situation in the
country is expected to remain favourable to power generators for the next 8/10 years
at least. This presents huge opportunities in the power sector for power generators.
Threats
The super critical technology is not yet tested in India and the Company also does not
have any prior experience of operating such power plant.
9.8: CONCLUSIONS
Company has proposed to set-up 1320 MW (2x660MW) Coal fired Thermal Power Project
based on Super Critical Technology. State Government has supported this Project and has
issued letter of support to provide all kind of administrative support required.
The Company has already acquired the land required for the Main plant from Industrial
Development Corporation and has made the requisite payments. The remaining required land
has been identified and the process of acquisition is underway.
The Proposed Project will be implemented by way of a turnkey Engineering, Procurement
and Construction (EPC) contract to be awarded on International Competitive Bidding Process
(ICB).
The Project requires about 4.12 MTPA coal based on average GCV of 4895 kcal/kg and PLF
of 85%. Ministry of Coal has allocated Coal block for the Proposed Project. The Company
plans to mine the coal by itself and transport through rail route to the Project site. Appropriate
arrangements are proposed to be done. The captive mines will make the cost of generation for
the Project very competitive and will also give complete control over the primary fuel for the
Project.
The Project will require about 5000 cubic meter per hour make-up water during operation.
The Company has received letter of intent from Water Resource Department of State
Government for allocation of 10,417 cubic meters per hour water from River which flows
near by the Project site.
1056 MW of power is proposed to be sold on 15 years take or pay PPA to BEL at the quoted
tariff from COD. Balance 264 MW will be sold on Merchant basis. Considering the cost of
generation of Rs. 2.21 per unit, Company does not envisage any difficulties in selling the
power through merchant route.
Power Evacuation will be through two double circuit 400 KV transmission lines connecting
the Project to the PGCIL substation and State TRANSCO substation.
The Electricity Act 2003 and subsequent National Electricity Policy and Tariff Policy have
opened up several opportunities for the power sector. The Act allows the IPPs and captive
power producers open access to transmission system, thus allowing them to bypass the SEBs
and sell power directly to bulk consumers. Slowly open access in distribution system is also
being allowed.
Assessment of the financial feasibility of the Proposed Project, delivers satisfactory financial
parameters as per base financial model. It has also assessed the viability of the Project under
the impact of various scenarios, which could be at variance with the base case scenario
assumed.
Subject to the weaknesses and threats enumerated in the SWOT analysis and the impact of
the various scenarios as envisaged under the sensitivity analysis, the Proposed Project is
viewed as economically viable.
10: LIMITATIONS
This analysis is limited to an examination of annualized expenses and revenue and represents
a prototypical year of operations in base year dollars. The development of a complete
financial plan must include consideration of cash flows for expenses and revenues, both
capital and operating, on a year-by-year basis from the current year through and beyond the
design year selected for the estimation of tariff. This analysis should examine alternative pay-
as-you-go and debt financed scenarios, be conducted in year-of-expenditure dollars, and
address the underlying uncertainties associated with inflation, interest rates, project cost
(exclusive of inflation), foreign exchange rate, grant funding levels and rates of payment, and
other factors over which the project sponsor will have no direct control.
The assumptions and sources of information underlying the development of the capital and
operating cost estimates are an integral part of the financial analyses documented in this
report. Uncertainties associated with fluctuating economic conditions and other factors may
result in the actual results of the financial program varying from the projections in the
financial analyses, and the variations could be material.
Some of the major limitations and issues regarding the project appraisal are as follow:
1. The rate of escalation is taken as constant over the life of the project (about 25 years);
being the life of project large it is not easy to predict the actual cost and inflationary effect
on the price of fuels and other inputs with the change in market conditions.
2. Cash flows not really known until the project is in service – no history of cash flows
3. Value of debt and equity driven by cash flow.
4. Measure the value of different securities supported by project cash flow
5. Risk analysis depends on contracts used to allocate risk to different parties
6. Foreign exchange rate is taken on regular depreciation of rupees and this will be a
limitation to the model.
7. Monthly analysis of construction is used for accurate representation of IDC, but; the
expense schedule is given on annual basis. So, proper distribution of expense on monthly
basis and allocation of funds (using debt, equity or sub-debt) is a problem.
11: LEARNINGS
The experience and know-how gained from this internship, has left me in more compliant
form and stature in order to fare better in areas of similar interest. Now I here make it sort
with few but most important points what I have learned:
12: RECOMMENDATIONS
Recommendation:
To minimize the risk, the extent of financing to a single project should be proportionate;
it will also affect the exposure limit for borrower or utilities and chance to fund in more
projects rather in some.
With the deficit of electricity in our country, there is need of many projects and the
exposure limit should be increased to effectively assist the new projects. The exposure
limit of some utility is going to reached, which resist PFC to fund.
With the increasing IPPs in power generation the exposure to them should be more and
the portfolio size for IPPs should be increased. It will increase the revenue because of
higher interest rate and some extra charges.
Currently PFC has less % funding in renewable energy, PFC should also concentrate to
increase its share in renewable energy.
Nuclear power projects should be taken as a future prospect business of PFC.
In project appraisal, during calculation of IDC, the sub ordinate debt part should be
properly discussed with promoter. Sometimes it is a part of debt or equity. The interest
charge on sub-debt should be checked correctly.
The entity appraisal is very detailed and sensitive part of project financing, manual work
should be replaced with good software.
With the changes in project parameters, the re-rating of project should be done at an
appropriate time and linkages of interest rate, exposure limit and security to the new
project rating should be done.
There should be more bifurcation in the linkages to integrated project rating. A detailed
and comprehensive model study should be made for accordingly.
13: ANNEXURES
Annexure - I
Annexure –II
7 10
Annexure-III
Personal Guarantee of at least two promoter directors, where promoters do not have
prior experience in setting up projects.
In case of subordinate debt, additional pledge of 10% share would be required, which
may be considered for release after 50% of entire project loan is repaid.
5
Pledge of Share: At least 51% of project equity till currency of PFC loan, However
25% may be considered for release after 50% of loan is repaid.
DSRA: At least 2 quarters
Option to convert up to 10% of PFC loan disbursed, into equity shares at book value
any time up to 5 years after COD
In case of subordinate debt, additional pledge of 16% share would be required, which
may be considered for release after 50% of entire project loan is repaid.
Annexure-IV
1. Purpose
To provide finance to all types of projects in state & private sector viz. generation, transmission,
distribution, renovation & modernization, uprating, environment upgradation, metering, etc. The
infrastructure projects having forward and backward linkages with power projects are also covered.
2. Eligible entities
The entities engaged in generation, transmission, trading, distribution of power or any combination of
these activities including captive / co-gen power producers. The entities engaged in the infrastructure
projects with forward / backward linkages to power projects.
* In case of thermal generation projects and hydro projects, the financial assistance is generally up to
20% and 25% of the project cost respectively. However, the enhanced limit can be considered for
loan size of Rs. 500 crs and above or where PFC is a lead institution. In case of infrastructure
projects with forward / backward linkages to power projects the financial assistance is up to 20% of
the project cost.
Interest rates as notified by the Corporation from time to time. Special interest rates
are also available for loans exceeding Rs. 700 crs for generation projects in state
sector and Rs. 500 crs in private sector.
Interest rates prevailing on the date of disbursement(s) shall be applicable.
Incentive / rebate available for timely payment of dues for state/central sector utilities.
For all type of generation projects and infrastructure projects with forward and
backward linkages to power projects, reduction in interest rate after commissioning of
projects / COD as per prevailing policy.
Penal interest payable on default-payments.
Commitment fees / upfront fees as may be applicable for respective borrowers from
time to time.
Processing fee, Lead fee & facility Agent fee for private sector entities as applicable
from time to time.
Option to avail interest rate with reset after every 3 years or with reset after 10 years.
Interest reset condition to apply from the standard due date following the date of first
disbursement after 3/10 years, as the case may be.
6. Moratorium
Moratorium on principal is available upto 6 months from the date of project commissioning / COD.
There is no moratorium on interest payment.
7. Disbursement mechanism
Disbursement will be made, against bills, as per the ‘Disbursement Schedule’ submitted by the
borrower. In case of small loans (below Rs. 20 Crs.), simplified disbursement procedure is applicable.
In the case of private sector borrower, disbursement is made through Trust and Retention Account
mechanism.
8. Interest payment
Interest is to be paid quarterly, on standard due dates i.e. 15/4, 15/7, 15/10 and 15/1 every year.
9. Repayment
The first repayment installment will become due on the standard due date immediately following the
end of moratorium period. Borrower may also opt for a shorter repayment period.
State / Central government or bank guarantee or charge on assets, for state and central
sector entities, while charge on project assets for others. and
Letter of Credit or Tripartite Escrow Agreement amongst the borrower, the bank PFC
for state and central sector entities while Trust and Retention Account mechanism for
others.
Corporate and/or personal guarantee of the promoters for private sector, if the
outcome of appraisal establishes a requirement for the same.
Other securities, as may be necessary.
b. Private Borrowers:
Single Company Single Group of Companies
Source: http://www.pfc.gov.in/termloan.pdf
Annexure-V
1 2.553
2 2.553
3 2.553
4 2.553
5 2.553
6 2.5748
7 2.5912
8 2.6095
9 2.6299
10 2.6523
11 2.6769
12 2.7038
13 2.5091
14 2.5729
15 2.6392
16 2.7081
17 2.7799
18 2.8545
19 2.932
20 3.0127
21 3.0966
22 3.1839
23 3.2746
24 3.369
25 3.4672
O&M Escalation 4%
O&M Expense for COD yr(2010-2011) Rs. 13.08
Lakh/MW/yr
Year ending March 31 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
0 1 2 3 4 5 6 7 8 9 10 11
Debt Outstanding 5318.89 4919.98 4388.09 3856.20 3324.31 2792.42 2260.53 1728.64 1196.75 664.86 132.97 0.00
April 0.00 0.00 132.97 132.97 132.97 132.97 132.97 132.97 132.97 132.97 132.97 132.97
July 0.00 132.97 132.97 132.97 132.97 132.97 132.97 132.97 132.97 132.97 132.97 0.00
Repayments
October 0.00 132.97 132.97 132.97 132.97 132.97 132.97 132.97 132.97 132.97 132.97 0.00
Principle
January 0.00 132.97 132.97 132.97 132.97 132.97 132.97 132.97 132.97 132.97 132.97 0.00
Total FY Repayment 0.00 398.92 531.89 531.89 531.89 531.89 531.89 531.89 531.89 531.89 531.89 132.97
Cumulative Principle 0.00 398.92 930.81 1462.70 1994.59 2526.47 3058.36 3590.25 4122.14 4654.03 5185.92 5318.89
Repayment
April 0.00 162.89 150.67 134.39 118.10 101.81 85.52 69.23 52.94 36.65 20.36 4.07
July 0.00 162.89 146.60 130.31 114.02 97.73 81.45 65.16 48.87 32.58 16.29 0.00
Payments
Interest
October 0.00 162.89 142.53 126.24 109.95 93.66 77.37 61.08 44.80 28.51 12.22 0.00
January 162.89 154.75 138.46 122.17 105.88 89.59 73.30 57.01 40.72 24.43 8.14 0.00
Total Yearly Interest payments 162.89 643.42 578.26 513.11 447.95 382.79 317.64 252.48 187.32 122.17 57.01 4.07
Total Debt Servicing 162.89 1042.34 1110.15 1045.00 979.84 914.68 849.53 784.37 719.21 654.06 588.90 137.04
Project Phasing Month Aug- Sep- Oct- Nov- Dec- Jan- Feb- Mar- Apr- May- Jun- Jul- Aug-
May-09
2008 2008 2008 2008 2008 2009 2009 2009 2009 2009 2009 2009 2009
FY 2009 2009 2009 2009 2009 2009 2009 2009 2009 2009 2009 2009 2010 2010
1 2 3 4 5 6 7 8 9 10 11 12 13 14
Total 1.80%
Percentage 100.00% 2.10% 2.10% 2.09% 1.30% 1.30% 1.30% 1.12% 1.12% 1.12% 1.80% 1.80% 1.80% 1.80% 127.65
Amount 7091.86 148.93 148.93 148.22 92.19 92.19 92.19 79.43 79.43 79.43 127.65 127.65 127.65 127.65 1599.21
Upfront Equity 620.54 308.62 173.60 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Upfront Debt 1861.61 0.00 135.02 244.32 244.32 244.32 231.46 25.72 0.00 0.00 0.00 0.00 0.00 0.00 127.65
Matching Equity 1152.43 0.00 0.00 0.00 0.00 0.00 0.00 61.72 69.44 73.30 53.04 53.04 53.04 48.22 0.00
Matching Debt 3457.28 0.00 0.00 0.00 0.00 0.00 0.00 144.02 162.02 171.03 123.77 123.77 123.77 112.52 0.00
Total Equity 1772.96 308.62 173.60 0.00 0.00 0.00 0.00 61.72 69.44 73.30 53.04 53.04 53.04 48.22 0.00
Total debt 5318.89 0.00 135.02 244.32 244.32 244.32 231.46 169.74 162.02 171.03 123.77 123.77 123.77 112.52 127.65
Sub debt component 354.59 308.62 173.60 0.00 0.00 0.00 0.00 61.72 69.44 29.58 0.00 0.00 0.00 0.00 0.00
Pure equity 1418.37 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 43.72 53.04 53.04 53.04 48.22
0.00
component
Interest 1166.86 0.00 0.65 2.46 4.81 7.15 9.43 11.35 12.94 14.54 15.95 17.13 18.32 19.45 13.52
Project
Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10
Phasing
2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2011 2011 2011 2011 2011 2011
15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
1.80% 1.80% 1.80% 1.80% 1.80% 1.80% 1.80% 1.80% 1.80% 1.80% 1.80% 1.80% 1.80% 1.50% 1.50% 1.50%
Percentage 127.65 127.65 127.65 127.65 127.65 127.65 127.65 127.65 127.65 127.65 127.65 127.65 127.65 106.38 106.38 106.38
Amount 1726.87 1854.52 1982.17 2109.83 2237.48 2365.14 2492.79 2620.44 2748.10 2875.75 3003.40 3131.06 3258.71 3365.09 3471.47 3577.84
Upfront
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Equity
Upfront
127.65 127.65 127.65 127.65 127.65 127.65 117.02 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Debt
Matching
0.00 0.00 0.00 0.00 0.00 0.00 2.66 31.91 31.91 31.91 31.91 31.91 31.91 26.59 26.59 26.59
Equity
Matching
0.00 0.00 0.00 0.00 0.00 0.00 7.98 95.74 95.74 95.74 95.74 95.74 95.74 79.78 79.78 79.78
Debt
Total
0.00 0.00 0.00 0.00 0.00 0.00 2.66 31.91 31.91 31.91 31.91 31.91 31.91 26.59 26.59 26.59
Equity
Total debt 127.65 127.65 127.65 127.65 127.65 127.65 124.99 95.74 95.74 95.74 95.74 95.74 95.74 79.78 79.78 79.78
Sub debt
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
component
Pure
equity 0.00 0.00 0.00 0.00 0.00 0.00 2.66 31.91 31.91 31.91 31.91 31.91 31.91 26.59 26.59 26.59
component
Interest 14.85 16.18 17.51 18.84 20.17 21.50 22.81 23.96 24.96 25.96 26.95 27.95 28.95 29.86 30.69 31.53
Project
Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11
Phasing
2011 2011 2011 2011 2011 2011 2012 2012 2012 2012 2012 2012 2012 2012 2012
31 32 33 34 35 36 37 38 39 40 41 42 43 44 45
3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 4.35% 4.35% 4.35% 4.50% 4.50% 4.50% 2.00% 2.00% 1.00%
Percentage 212.76 212.76 212.76 212.76 212.76 212.76 308.50 308.50 308.50 319.13 319.13 319.13 141.84 141.84 70.92
Amount 3790.60 4003.35 4216.11 4428.87 4641.62 4854.38 5162.87 5471.37 5779.87 6099.00 6418.13 6737.27 6879.10 7020.94 7091.86
Upfront
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Equity
Upfront
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Debt
Matching
53.19 53.19 53.19 53.19 53.19 53.19 77.12 77.12 77.12 79.78 79.78 79.78 35.46 35.46 17.73
Equity
Matching
159.57 159.57 159.57 159.57 159.57 159.57 231.37 231.37 231.37 239.35 239.35 239.35 106.38 106.38 53.19
Debt
Total Equity 53.19 53.19 53.19 53.19 53.19 53.19 77.12 77.12 77.12 79.78 79.78 79.78 35.46 35.46 17.73
Total debt 159.57 159.57 159.57 159.57 159.57 159.57 231.37 231.37 231.37 239.35 239.35 239.35 106.38 106.38 53.19
Sub debt
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
component
Pure equity
53.19 53.19 53.19 53.19 53.19 53.19 77.12 77.12 77.12 79.78 79.78 79.78 35.46 35.46 17.73
component
Interest 32.77 34.43 36.10 37.76 39.42 41.08 43.12 45.53 47.94 50.39 52.88 55.38 57.18 58.29 59.12
Year Ending March 31 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
1 2 3 4 5 6 7 8 9 10 11 12 13 14
ITEMS
Nor
m
Primary fuel 2 month 48.88 102.06 106.56 111.25 116.15 121.27 126.62 132.20 138.04 144.14 150.51 157.16 164.11 171.38
Secondary 2 month
8.19 16.38 16.38 16.38 16.38 16.38 16.38 16.38 16.38 16.38 16.38 16.38 16.38 16.38
fuel
O&M 1 month
7.19 16.08 17.00 17.97 19.00 20.09 21.24 22.45 23.74 25.09 26.53 28.05 29.65 31.35
Expense
Maintenanc 20% O&M
e Spares (1%
17.27 38.59 40.80 43.14 45.60 48.21 50.97 53.89 56.97 60.23 63.67 67.31 71.16 75.23
of capital
cost)
Receivables 2 month
from Energy 152.23 304.46 304.46 304.46 304.46 307.06 309.01 311.20 313.63 316.30 319.23 322.44 299.22 306.83
Sales
WORKING CAPITAL
Total Working Capital 233.76 477.58 485.20 493.20 501.59 513.01 524.22 536.12 548.75 562.14 576.32 591.34 580.53 601.17
Increase In Working Capital 233.76 243.82 7.62 8.00 8.40 11.41 11.21 11.90 12.64 13.38 14.18 15.02 -10.81 20.64
WORKING CAPITAL DEBT
Working Capital Debt 175.32 358.19 363.90 369.90 376.20 384.76 393.16 402.09 411.56 421.60 432.24 443.51 435.40 450.88
Increase In Working Capital
175.32 182.86 5.71 6.00 6.30 8.56 8.41 8.92 9.48 10.04 10.64 11.27 -8.11 15.48
Debt
CURRENT ASSETS
Total Current Assets 226.57 461.50 468.20 475.22 482.59 492.92 502.98 513.67 525.02 537.04 549.79 563.30 550.88 569.82
Increase in Current Assets 226.57 234.93 6.70 7.03 7.37 10.33 10.06 10.68 11.35 12.03 12.75 13.50 -12.42 18.94
Year Ending March 31 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036
15 16 17 18 19 20 21 22 23 24 25
ITEMS
Norm
Primary fuel 2 month 178.97 186.90 195.18 203.84 212.89 222.34 232.22 242.54 253.33 264.60 276.38
Secondary fuel 2 month 16.38 16.38 16.38 16.38 16.38 16.38 16.38 16.38 16.38 16.38 16.38
O&M Expense 1 month 33.14 35.04 37.04 39.16 41.40 43.77 46.27 48.92 51.71 54.67 57.80
Maintenance 20% O&M
Spares (1% of 79.54 84.09 88.90 93.98 99.36 105.04 111.05 117.40 124.12 131.21 138.72
capital cost)
Receivables from 2 month
314.74 322.95 331.52 340.41 349.66 359.28 369.29 379.70 390.51 401.77 413.48
Energy Sales
WORKING CAPITAL
Total Working Capital 622.76 645.35 669.02 693.77 719.68 746.81 775.20 804.93 836.05 868.64 902.76
Increase In Working Capital 21.59 22.59 23.66 24.76 25.90 27.13 28.40 29.73 31.12 32.59 34.12
WORKING CAPITAL DEBT
Working Capital Debt 467.07 484.02 501.76 520.33 539.76 560.10 581.40 603.70 627.04 651.48 677.07
Increase In Working Capital Debt 16.19 16.94 17.75 18.57 19.43 20.35 21.30 22.30 23.34 24.44 25.59
CURRENT ASSETS
Total Current Assets 589.62 610.32 631.98 654.62 678.28 703.04 728.93 756.02 784.33 813.96 844.96
Increase in Current Assets 19.80 20.70 21.66 22.64 23.66 24.76 25.89 27.09 28.32 29.63 31.00
Year Ending March 31 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
1 2 3 4 5 6 7 8 9 10 11 12 13
Tariff for CSEB Rs/Unit 2.55300 2.55300 2.55300 2.55300 2.55300 2.57480 2.59120 2.60950 2.62990 2.65230 2.67690 2.70380 2.57290
Effective Tariff Rs/unit 2.61240 2.62380 2.63543 2.64729 2.65939 2.68917 2.71487 2.74235 2.77177 2.80304 2.83635 2.87176 2.79568
Year Ending March 31 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036
14 15 16 17 18 19 20 21 22 23 24 25
Tariff for CSEB Rs/Unit 2.50910 2.63920 2.70810 2.77990 2.85450 2.93200 3.01270 3.09660 3.18390 3.27460 3.36900 3.46720
Effective Tariff Rs/unit 2.73018 2.86346 2.93362 3.00641 3.08174 3.15970 3.24054 3.32427 3.41105 3.50089 3.59403 3.69057
Capacity MW
Commissioned
880.00 1320.00 1320.00 1320.00 1320.00 1320.00 1320.00 1320.00 1320.00 1320.00 1320.00 1320.00
Energy Generated Million
Units
4914.36 9828.72 9828.72 9828.72 9828.72 9828.72 9828.72 9828.72 9828.72 9828.72 9828.72 9828.72
Energy Sold Million
Units
4472.07 8944.14 8944.14 8944.14 8944.14 8944.14 8944.14 8944.14 8944.14 8944.14 8944.14 8944.14
Capital Cost Rs
Component Crores
per
4255.12 6382.67 7091.86 7091.86 7091.86 7091.86 7091.86 7091.86 7091.86 7091.86 7091.86 7091.86
month
Equity Cost Rs
Component Crores
per
3191.34 4787.01 5318.89 5318.89 5318.89 5318.89 5318.89 5318.89 5318.89 5318.89 5318.89 5318.89
month
Debt Cost Rs
Component Crores
per
1063.78 1595.67 1772.96 1772.96 1772.96 1772.96 1772.96 1772.96 1772.96 1772.96 1772.96 1772.96
month
Yr Ending March 31 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036
13 14 15 16 17 18 19 20 21 22 23 24 25
Capacity MW
Commissioned
1320.00 1320.00 1320.00 1320.00 1320.00 1320.00 1320.00 1320.00 1320.00 1320.00 1320.00 1320.00 1320.00
Energy Generated Million
Units
9828.72 9828.72 9828.72 9828.72 9828.72 9828.72 9828.72 9828.72 9828.72 9828.72 9828.72 9828.72 9828.72
Energy Sold Million
Units
8944.14 8944.14 8944.14 8944.14 8944.14 8944.14 8944.14 8944.14 8944.14 8944.14 8944.14 8944.14 8944.14
Capital Cost Rs
Component Crores
per
7091.86 7091.86 7091.86 7091.86 7091.86 7091.86 7091.86 7091.86 7091.86 7091.86 7091.86 7091.86 7091.86
month
Equity Cost Rs
Component Crores
per
5318.89 5318.89 5318.89 5318.89 5318.89 5318.89 5318.89 5318.89 5318.89 5318.89 5318.89 5318.89 5318.89
month
Debt Cost Rs
Component Crores
per
1772.96 1772.96 1772.96 1772.96 1772.96 1772.96 1772.96 1772.96 1772.96 1772.96 1772.96 1772.96 1772.96
month
Year Ending March 31 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036
13 14 15 16 17 18 19 20 21 22 23 24 25
VARIABLE TARIFF
Energy Available for Million
8944.14 8944.14 8944.14 8944.14 8944.14 8944.14 8944.14 8944.14 8944.14 8944.14 8944.14 8944.14 8944.14
Sale Units
Variable Fuel Cost Rs Crores 985.12 1028.72 1074.28 1121.88 1171.61 1223.57 1277.87 1334.61 1393.90 1455.86 1520.61 1588.27 1658.97
Variable Fuel Cost Rs/KWH
1.10 1.15 1.20 1.25 1.31 1.37 1.43 1.49 1.56 1.63 1.70 1.78 1.85
per Unit
FIXED TARIFF
Interest Rs Crores 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Return on Equity Rs Crores 274.81 274.81 274.81 274.81 274.81 274.81 274.81 274.81 274.81 274.81 274.81 274.81 274.81
Depreciation Rs Crores 106.79 106.79 106.79 106.79 106.79 106.79 106.79 106.79 106.79 106.79 106.79 106.79 106.79
Cumulative Rs Crores
3187.07 3293.86 3400.64 3507.43 3614.21 3721.00 3827.79 3934.57 4041.36 4148.14 4254.93 4361.71 4468.50
Depreciation
O&M Expense Rs Crores 355.82 376.17 397.68 420.43 444.48 469.91 496.78 525.20 555.24 587.00 620.58 656.07 693.60
Interest on Working Rs Crores
54.42 56.36 58.38 60.50 62.72 65.04 67.47 70.01 72.68 75.46 78.38 81.43 84.63
Capital
Income Tax Rs Crores 387.67 336.23 336.38 335.48 333.68 331.01 327.53 323.31 318.32 312.59 306.06 298.76 290.64
Fixed Cost Rs Crores 1179.50 1150.36 1174.05 1198.01 1222.48 1247.56 1273.38 1300.12 1327.83 1356.65 1386.61 1417.86 1450.47
Fixed Cost per Unit Rs/KWH 1.32 1.29 1.31 1.34 1.37 1.39 1.42 1.45 1.48 1.52 1.55 1.59 1.62
Fixed Cost w/o ROE Rs Crores 904.69 875.55 899.24 923.20 947.67 972.75 998.57 1025.31 1053.02 1081.84 1111.80 1143.05 1175.66
Fixed Cost per Unit Rs/KWH
1.26 1.22 1.26 1.29 1.32 1.36 1.40 1.43 1.47 1.51 1.55 1.60 1.64
w/o ROE
Total Cost per Unit Rs/KWH
2.37 2.37 2.46 2.54 2.63 2.73 2.82 2.93 3.03 3.14 3.25 3.37 3.50
w/o ROE
Total Cost per Unit Rs/KWH 2.4202 2.4363 2.5137 2.5937 2.6767 2.7629 2.8524 2.9458 3.0430 3.1445 3.2504 3.3610 3.4765
Effective Tariff Rs/KWH 2.73018 2.79568 2.86346 2.93362 3.00641 3.08174 3.15970 3.24054 3.32427 3.41105 3.50089 3.59403 3.69057
PV Calculation
PV Factor 0.20 0.18 0.16 0.14 0.13 0.11 0.10 0.09 0.08 0.07 0.06 0.05 0.05
DISCOUNTED TARIFF
Variable Tariff Rs/KWH 0.22 0.21 0.19 0.18 0.16 0.15 0.14 0.13 0.12 0.11 0.10 0.09 0.09
Fixed Tariff Rs/KWH
0.27 0.23 0.21 0.19 0.17 0.15 0.14 0.13 0.11 0.10 0.09 0.08 0.08
including ROE
Total Tariff Rs/KWH
0.49 0.44 0.40 0.37 0.34 0.31 0.28 0.26 0.23 0.21 0.20 0.18 0.16
including ROE
Total Tariff w/o Rs/KWH
0.48 0.43 0.39 0.36 0.33 0.30 0.28 0.25 0.23 0.21 0.20 0.18 0.16
ROE
Effective Tariff Rs/KWH 0.56 0.51 0.46 0.42 0.38 0.34 0.31 0.28 0.26 0.23 0.21 0.19 0.17
1 2 3 4 5 6 7 8 9 10 11 12 13
Year ending March 31, 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Revenue from energy sale 913.38 1826.75 1826.75 1826.75 1826.75 1842.35 1854.08 1867.18 1881.77 1897.80 1915.40 1934.65 1795.34
to BEL
Revenue from energy sale 254.91 520.01 530.41 541.02 551.84 562.88 574.14 585.62 597.33 609.28 621.46 633.89 646.57
on Marchant Basis
Total Revenue 1168.28 2346.76 2357.16 2367.77 2378.59 2405.23 2428.22 2452.80 2479.10 2507.08 2536.87 2568.54 2441.91
Expenses
Fuel 283.55 590.99 615.88 641.84 668.90 697.11 726.53 757.19 789.17 822.51 857.26 893.51 931.30
O&M expenses 86.33 192.97 204.01 215.68 228.02 241.06 254.85 269.43 284.84 301.13 318.35 336.56 355.82
Depreciation 196.61 262.15 262.15 262.15 262.15 262.15 262.15 262.15 262.15 262.15 262.15 262.15 106.79
Interest payments 179.21 687.85 623.38 558.94 494.53 430.41 366.26 302.17 238.15 174.20 110.32 58.73 53.58
Total expenditure 745.71 1733.96 1705.43 1678.61 1653.60 1630.73 1609.79 1590.95 1574.31 1559.99 1548.09 1550.95 1447.48
Profit before tax, PBT 422.58 612.80 651.74 689.16 724.99 774.49 818.43 861.85 904.79 947.09 988.78 1017.59 994.43
PBT+Deprn on books 619.19 809.41 913.89 951.31 987.14 1036.65 1080.58 1124.00 1166.95 1209.24 1250.93 1279.74 1256.58
PBT for IT purposes -99.93 -98.58 220.17 419.58 578.03 720.54 835.16 932.42 1016.50 1090.32 1156.26 1203.81 1195.19
Payable tax 47.88 69.43 74.84 142.61 196.47 244.91 283.87 316.93 345.51 370.60 393.01 409.18 406.25
Applicable tax 47.88 69.43 74.84 142.61 196.47 244.91 283.87 316.93 345.51 370.60 393.01 409.18 406.25
Corporate tax -33.97 -33.51 74.84 142.61 196.47 244.91 283.87 316.93 345.51 370.60 393.01 409.18 406.25
MAT 47.88 69.43 73.84 78.08 82.14 87.75 92.73 97.65 102.51 107.31 112.03 115.29 112.67
PAT 374.70 543.37 576.90 546.55 528.52 529.58 534.56 544.92 559.29 576.49 595.76 608.41 588.18
Accumulated PAT 374.70 918.07 1494.97 2041.51 2570.03 3099.61 3634.17 4179.09 4738.38 5314.87 5910.64 6519.05 7107.23
Depreciation as per IT Act 719.12 907.99 693.71 531.74 409.11 316.11 245.43 191.58 150.45 118.92 94.67 75.93 61.38
Machinery depreciation 658.53 823.17 617.38 463.03 347.27 260.46 195.34 146.51 109.88 82.41 61.81 46.36 34.77
Machinery, WDV 3292.67 2469.50 1852.13 1389.09 1041.82 781.37 586.02 439.52 329.64 247.23 185.42 139.07 104.30
Buildings depreciation 60.59 84.82 76.34 68.71 61.83 55.65 50.09 45.08 40.57 36.51 32.86 29.58 26.62
Buildings, WDV 848.21 763.39 687.05 618.35 556.51 500.86 450.78 405.70 365.13 328.62 295.75 266.18 239.56
14 15 16 17 18 19 20 21 22 23 24 25
Year ending March 31, 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036
Revenue from energy sale
1840.99 1888.43 1937.73 1989.10 2042.48 2097.94 2155.68 2215.71 2278.18 2343.08 2410.62 2480.89
to BEL
Revenue from energy sale
659.50 672.69 686.14 699.87 713.87 728.14 742.71 757.56 772.71 788.16 803.93 820.01
on Marchant Basis
Total Revenue 2500.49 2561.12 2623.87 2688.97 2756.35 2826.08 2898.38 2973.27 3050.89 3131.24 3214.55 3300.90
Expenses
Fuel 970.70 1011.79 1054.63 1099.31 1145.90 1194.48 1245.14 1297.98 1353.07 1410.54 1470.46 1532.96
O&M expenses 376.17 397.68 420.43 444.48 469.91 496.78 525.20 555.24 587.00 620.58 656.07 693.60
Depreciation 106.79 106.79 106.79 106.79 106.79 106.79 106.79 106.79 106.79 106.79 106.79 106.79
Interest payments 55.45 57.41 59.45 61.59 63.83 66.17 68.62 71.18 73.86 76.66 79.59 82.66
Total expenditure 1509.11 1573.67 1641.30 1712.17 1786.42 1864.22 1945.74 2031.18 2120.72 2214.56 2312.92 2416.02
Profit before tax, PBT 991.38 987.45 982.57 976.81 969.93 961.86 952.64 942.09 930.17 916.68 901.63 884.88
PBT+Deprn on books 1098.17 1094.24 1089.36 1083.59 1076.72 1068.65 1059.43 1048.88 1036.96 1023.47 1008.42 991.67
PBT for IT purposes 1048.14 1053.12 1055.29 1055.13 1052.75 1048.31 1042.06 1033.94 1024.03 1012.23 998.60 983.05
Payable tax 356.26 357.96 358.69 358.64 357.83 356.32 354.19 351.44 348.07 344.06 339.42 334.14
Applicable tax 356.26 357.96 358.69 358.64 357.83 356.32 354.19 351.44 348.07 344.06 339.42 334.14
Corporate tax 356.26 357.96 358.69 358.64 357.83 356.32 354.19 351.44 348.07 344.06 339.42 334.14
MAT 112.32 111.88 111.33 110.67 109.89 108.98 107.93 106.74 105.39 103.86 102.16 100.26
PAT 635.12 629.50 623.88 618.17 612.10 605.54 598.45 590.66 582.10 572.63 562.21 550.74
Accumulated PAT 7742.35 8371.85 8995.73 9613.90 10226.00 10831.54 11429.99 12020.64 12602.74 13175.37 13737.58 14288.32
Depreciation as per IT Act 50.03 41.12 34.07 28.46 23.97 20.33 17.37 14.94 12.92 11.24 9.82 8.62
Machinery depreciation 26.07 19.56 14.67 11.00 8.25 6.19 4.64 3.48 2.61 1.96 1.47 1.10
Machinery, WDV 78.22 58.67 44.00 33.00 24.75 18.56 13.92 10.44 7.83 5.87 4.41 3.30
Buildings depreciation 23.96 21.56 19.40 17.46 15.72 14.15 12.73 11.46 10.31 9.28 8.35 7.52
Buildings, WDV 215.60 194.04 174.64 157.18 141.46 127.31 114.58 103.12 92.81 83.53 75.18 67.66
Inflow
Equity 1772.96 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Debt 5551.01 241.85 7.28 7.63 8.00 11.00 10.76 11.42 12.13 12.84 13.60 14.41 -11.47
Term loan 5318.89 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
WC debt 232.11 241.85 7.28 7.63 8.00 11.00 10.76 11.42 12.13 12.84 13.60 14.41 -11.47
PBT 422.58 612.80 651.74 689.16 724.99 774.49 818.43 861.85 904.79 947.09 988.78 1017.59 994.43
Depreciation 196.61 262.15 262.15 262.15 262.15 262.15 262.15 262.15 262.15 262.15 262.15 262.15 106.79
Total cash inflow 7746.55 1116.80 921.16 958.94 995.14 1047.64 1091.35 1135.42 1179.07 1222.08 1264.53 1294.15 1089.74
Outflow
Project expenditure 7091.86 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
WC expenditure 224.92 232.96 6.36 6.66 6.98 9.91 9.61 10.21 10.84 11.48 12.17 12.89 -13.07
Tax 47.88 69.43 74.84 142.61 196.47 244.91 283.87 316.93 345.51 370.60 393.01 409.18 406.25
Loan repayments 0.00 398.92 531.89 531.89 531.89 531.89 531.89 531.89 531.89 531.89 531.89 132.97 0.00
Total cash outflow 7364.66 701.31 613.08 681.16 735.34 786.71 825.37 859.03 888.24 913.97 937.07 555.04 393.17
Excess / shortfall 381.89 415.49 308.08 277.78 259.81 260.93 265.97 276.40 290.83 308.11 327.46 739.11 696.57
Opening balance 0.00 381.89 797.38 1105.46 1383.25 1643.05 1903.98 2169.96 2446.36 2737.19 3045.30 3372.76 4111.87
Closing balance 381.89 797.38 1105.46 1383.25 1643.05 1903.98 2169.96 2446.36 2737.19 3045.30 3372.76 4111.87 4808.44
14 15 16 17 18 19 20 21 22 23 24 25
Year ending, March 31 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036
Inflow
Equity 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Debt 19.94 20.85 21.80 22.82 23.86 24.95 26.12 27.32 28.59 29.90 31.30 32.76
Term loan 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
WC debt 19.94 20.85 21.80 22.82 23.86 24.95 26.12 27.32 28.59 29.90 31.30 32.76
PBT 991.38 987.45 982.57 976.81 969.93 961.86 952.64 942.09 930.17 916.68 901.63 884.88
Depreciation 106.79 106.79 106.79 106.79 106.79 106.79 106.79 106.79 106.79 106.79 106.79 106.79
Total cash inflow 1118.11 1115.09 1111.16 1106.41 1100.58 1093.60 1085.54 1076.20 1065.55 1053.37 1039.72 1024.42
Outflow
Project expenditure 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
WC expenditure 18.24 19.05 19.90 20.82 21.74 22.71 23.75 24.82 25.94 27.10 28.34 29.63
Tax 356.26 357.96 358.69 358.64 357.83 356.32 354.19 351.44 348.07 344.06 339.42 334.14
Loan repayments 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Total cash outflow 374.51 377.01 378.60 379.45 379.57 379.03 377.94 376.25 374.01 371.16 367.76 363.77
Excess / shortfall 743.60 738.08 732.56 726.96 721.01 714.57 707.60 699.95 691.53 682.21 671.95 660.66
Opening balance 4808.44 5552.05 6290.12 7022.68 7749.64 8470.65 9185.21 9892.81 10592.76 11284.29 11966.50 12638.46
Closing balance 5552.05 6290.12 7022.68 7749.64 8470.65 9185.21 9892.81 10592.76 11284.29 11966.50 12638.46 13299.11
1 2 3 4 5 6 7 8 9 10 11 12 13
Year ending; March 31, 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Liabilities
Shareholders' equity 2147.66 2691.03 3267.93 3814.48 4342.99 4872.58 5407.14 5952.06 6511.35 7087.84 7683.60 8292.01 8880.19
Equity capital 1772.96 1772.96 1772.96 1772.96 1772.96 1772.96 1772.96 1772.96 1772.96 1772.96 1772.96 1772.96 1772.96
Reserves and surplus 374.70 918.07 1494.97 2041.51 2570.03 3099.61 3634.17 4179.09 4738.38 5314.87 5910.64 6519.05 7107.23
Loan funds 5551.01 5393.94 4869.33 4345.07 3821.18 3300.29 2779.16 2258.69 1738.93 1219.88 701.60 583.03 571.56
Term loan 5318.89 4919.98 4388.09 3856.20 3324.31 2792.42 2260.53 1728.64 1196.75 664.86 132.97 0.00 0.00
WC loan 232.11 473.96 481.24 488.87 496.87 507.87 518.63 530.05 542.18 555.02 568.62 583.03 571.56
Total liabilities 7698.67 8084.97 8137.26 8159.55 8164.18 8172.86 8186.30 8210.75 8250.28 8307.72 8385.20 8875.04 9451.76
Assets
Project assets 7091.86 6829.71 6567.56 6305.40 6043.25 5781.10 5518.95 5256.80 4994.64 4732.49 4470.34 4208.19 4101.40
Depreciation 196.61 262.15 262.15 262.15 262.15 262.15 262.15 262.15 262.15 262.15 262.15 262.15 106.79
Current assets 224.92 457.88 464.24 470.90 477.87 487.78 497.39 507.60 518.44 529.93 542.10 554.98 541.91
Coal stock 47.24 98.45 102.60 106.92 111.43 116.13 121.03 126.14 131.46 137.02 142.81 148.85 155.14
Secondary fuel 8.19 16.38 16.38 16.38 16.38 16.38 16.38 16.38 16.38 16.38 16.38 16.38 16.38
Maintenance spares 17.27 38.59 40.80 43.14 45.60 48.21 50.97 53.89 56.97 60.23 63.67 67.31 71.16
Receivables from energy sale 152.23 304.46 304.46 304.46 304.46 307.06 309.01 311.20 313.63 316.30 319.23 322.44 299.22
Cash 381.89 797.38 1105.46 1383.25 1643.05 1903.98 2169.96 2446.36 2737.19 3045.30 3372.76 4111.87 4808.44
Total assets 7698.67 8084.97 8137.26 8159.55 8164.18 8172.86 8186.30 8210.75 8250.28 8307.72 8385.20 8875.04 9451.76
Difference 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
14 15 16 17 18 19 20 21 22 23 24 25
Year ending; March 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036
31,
Liabilities
Shareholders' 9515.32 10144.81 10768.69 11386.86 11998.96 12604.50 13202.95 13793.61 14375.71 14948.33 15510.54 16061.29
equity
Equity capital 1772.96 1772.96 1772.96 1772.96 1772.96 1772.96 1772.96 1772.96 1772.96 1772.96 1772.96 1772.96
Reserves and 7742.35 8371.85 8995.73 9613.90 10226.00 10831.54 11429.99 12020.64 12602.74 13175.37 13737.58 14288.32
surplus
Loan funds 591.50 612.35 634.15 656.97 680.83 705.78 731.89 759.21 787.80 817.70 849.00 881.76
Term loan 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
WC loan 591.50 612.35 634.15 656.97 680.83 705.78 731.89 759.21 787.80 817.70 849.00 881.76
Total liabilities 10106.82 10757.16 11402.84 12043.83 12679.79 13310.28 13934.84 14552.82 15163.51 15766.04 16359.55 16943.05
Assets
Project assets 3994.62 3887.83 3781.04 3674.26 3567.47 3460.69 3353.90 3247.12 3140.33 3033.54 2926.76 2819.97
Depreciation 106.79 106.79 106.79 106.79 106.79 106.79 106.79 106.79 106.79 106.79 106.79 106.79
Current assets 560.15 579.21 599.11 619.93 641.67 664.38 688.13 712.94 738.89 765.99 794.33 823.96
Coal stock 161.71 168.55 175.69 183.13 190.89 198.99 207.43 216.23 225.41 234.98 244.96 255.38
Secondary fuel 16.38 16.38 16.38 16.38 16.38 16.38 16.38 16.38 16.38 16.38 16.38 16.38
Maintenance 75.23 79.54 84.09 88.90 93.98 99.36 105.04 111.05 117.40 124.12 131.21 138.72
spares
Receivables from 306.83 314.74 322.95 331.52 340.41 349.66 359.28 369.29 379.70 390.51 401.77 413.48
energy sale
Cash 5552.05 6290.12 7022.68 7749.64 8470.65 9185.21 9892.81 10592.76 11284.29 11966.50 12638.46 13299.11
Total assets 10106.82 10757.16 11402.84 12043.83 12679.79 13310.28 13934.84 14552.82 15163.51 15766.04 16359.55 16943.05
Difference 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
916.36 876.16 696.57 743.60 738.08 732.56 726.96 721.01 714.57 707.60 699.95 691.53 682.21 671.95 660.66
916.36 876.16 696.57 743.60 738.08 732.56 726.96 721.01 714.57 707.60 699.95 691.53 682.21 671.95 660.66
5910.64 6519.05 7107.23 7742.35 8371.85 8995.73 9613.90 10226.00 10831.54 11429.99 12020.64 12602.74 13175.37 13737.58 14288.32
5910.64 6519.05 7107.23 7742.35 8371.85 8995.73 9613.90 10226.00 10831.54 11429.99 12020.64 12602.74 13175.37 13737.58 14288.32
1 2 3 4 5 6 7 8 9 10 11
Year ending March 31 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Debt servicing sources 544.78 1146.21 1418.23 1322.78 1239.65 1175.62 1115.50 1060.77 1010.05 962.17 916.36
Debt servicing requirements 162.89 1042.34 1110.15 1045.00 979.84 914.68 849.53 784.37 719.21 654.06 588.90
DSCR 3.34 1.10 1.28 1.27 1.27 1.29 1.31 1.35 1.40 1.47 1.56
Minimum DSCR 1.10
Average DSCR 1.35
Maximum DSCR 3.34
REFERENCES