Solar Power Plant

5 MW Photo voltaic

2010
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CONFIDENTIAL AND PROPRIETARY Any use of this material without specific permission of Sunshakti Energy Solution Pvt. Ltd. is strictly prohibited

Index
___________________________________________________________________ Executive Summery
Solar Energy Sector Renewable Energy Opportunity & Energy Mix Forecast Investment in Renewable Solar Growth Drivers Global Market Size & Global Market by Geography Indian Solar Industry Financials Financial Structuring Company Structuring Exit Options Available Risk Analysis Technology Govt. Role and Project phases Execution Team Background
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Executive Summery _________________________________________________________________________

The Primary reason a Solar power plant is financially viable is due to the tremendous amount of subsidy provided by Govt. of India. Currently electrical power is sold at ` 3.5/unit by power plants to the govt. Under the Jawaharlal Nehru National Solar Mission any electricity produced by PV solar power plants is bought by the govt. at the rate of ` 15/unit. The equity funding is required to be released only once the Power Purchase agreement has been signed with the Govt. hence reducing the risk exposure of the equity partner. The solar power plant is proposed to be established in Rann of Kutch , Gujarat , India . The primary reason for the site selection is the intensity of the solar irradiation at the proposed location . The other influencing factors include favorable govt. support, hard packed soil (reducing maintenance cost),strong electricity infrastructure availability , lack of socio economical turbulence etc. The technology providers engineers work closely with us to develop the PV solar power plant. IT Benefit-Section 80 I [Indian tax code][from 2011]
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Solar Energy Sector

Solar Energy Sector

-Renewable Energy Opportunity

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Solar Energy Sector

-Evolution of Worlds Energy Mix

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Source : EPIA

Solar Energy Sector

-Investment

_________________________________________________________________ Investment - Global Trends

Global Investment in Renewable Energy Sector

Solar Energy Sector

-Solar Growth Drivers

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Each hour the sun delivers to Earth the amount of energy used by humans in a whole year Sun radiation onto earth corresponds to 120,000 TW Total human energy need in 2020: 20TW
Source : EPIA

Solar Energy Sector

-Global Market Size

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Source : EPIA

The expected growth rate is in the range of 20% - 30%, mainly fueled by pro solar policies being announced by various governments around the world.

Solar Energy Sector

- Global Market by Geography

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Solar Energy Sector

-Indian Solar Industry

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National Solar Mission - The objective of the Jawaharlal Nehru National Solar Mission (JNNSM) under the brand Solar India is to establish India as a global leader in solar energy, by creating the policy conditions for its diffusion across the country as quickly as possible. The Mission aims at : 20,000 MW (20GW) of installed solar generation capacity by 2022 100,00 MW by 2030 Solar power cost reduction to achieve grid tariff parity by 2022 Achieve parity with coal based thermal power generation by 2030 4-5 GW of installed solar manufacturing capacity by 2017

Solar Energy Sector

-Indian

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Indias growing economy is one of the primary drivers for the field of alternative energy investments .

India is also currently one of the top 2 carbon credit generators globally .

Solar energy sector in India is in a pole position because of India's geographical location .

Financials

Financials -Financial Structuring _________________________________________________________________ Financial Structure Debt Financing 60%=42 cr. approx Equity Financing 40%=28 cr. approx Break Even Period approx. 5-5 years Financial agreement & Guarantee - Govt. of India [Power Purchase Agreement {PPA} ] Insurance cover against a)Natural Calamities- Earthquake, Hurricane, Flooding etc b)Unforeseen damage Cash infusion required only after a PPA(power purchase agreement ) has been signed by the Govt. of India PPA is a promissory by the Govt. to buy the electricity at a fixed rate for the next 25 years irrespective of the global or domestic price movement /fluctuation in the unit cost of electricity. The repayment is guaranteed by the Govt. of India.

Financials - Company Structure _______________________________________________________________________ Archeron

Manufacturing

Consulting

Alternative Energy

Foreign Market Entry

Sun Shakti Energy Solutions Pvt. Ltd. Photovoltaic Solar Power Plant

Board of Directors Equity Partners Technology Partners

Carbon Credits Trading Solar Panels & Inverters Assembly & Manufacturing Power Plant Designing & Commissioning
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Financials -Exit Options Available __________________________________________________________________ We have all the Exit-Options categorized into 2 Time lines Early Exit[EE] Mid term Exit[MTE] Exit options QIP*--[EE] & [MTE] Sellout --[EE] & [MTE] Buyback by promoters -- [MTE] IPO--[MTE] Securitization --[EE]
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* QIP-Qualified Institutional Placements [Govt. regulations allow the equity partners to exit as early as 1 month into the project-only the promoters (Sun Shakti ) has to hold min. 26% for at least 5 years]

Exit options _________________________________________________________________ The IPO valuation is above 323 cr. ` (without hype) because of the following reasons : The Govt of Indias payment guarantee is 200 cr. ` plus. The sale of carbon credits generate another 40-60 cr.`(at current average price ) and the price of carbon credits rise continuously [i.e. todays carbon credit price is 12-13 euro per unit and around 24-36 months back it was 28 -30 Euros per unit ]. The trading division (i.e. Carbon Credit Trading ) of sun shakti will generate revenue from 2011 and the valuation of any trading firm is done at a very high exponential premium rating. We have deals with foreign solar panel manufacturers who will have a joint venture with sun shakti The implementation is two fanged primary : manufacturing activity ; secondary-Product Marketing activities . This adds another important chunk for the IPO valuation .

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Risk Analysis

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Risk Analysis _________________________________________________________________ Risk Mitigation Measure _______

Development Risk Promoter Risk The risk which is higher for the promoters is not going to be shared or transferred to the Equity or Debt partner , all the responsibility and onus of securing the Ppa lies with Sun Shakti . Pre PPA Risk : High Once the contract/ppa has been secured with the Govt. the equity and debt partner come into play hence drastically reducing their risk exposure . Post PPA Risk :Low

Financing Risk

The equity contribution for the project is proposed to be funded through the promoters contribution, private equity investments and unsecured loans. The company is in discussion with various potential private equity investors for tying up the requisite equity contribution. The risk assessment is based on the fact that ppa has been secured or not . Risk low

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Risk Analysis _________________________________________________________________ _______ Risk Mitigation Measure

Construction Risk Project Management Risk Sun Shakti proposes to adopt lump sum turnkey execution as implementation scheme and this approach reduces the project management risk. It handles project planning, supervision, erection & commissioning projects, etc. For this we are in current negotiations with multiple firms which have the requisite know how and global experience ,for example JUWI [Germany] Risk low The Company proposes to award the contracts on fixed cost basis to experienced and reputed technology suppliers. The Company will ensure to keep relevant provision for liquidated damages in case of delay of project. Such liquidated damages would partially offset the adverse impact of cost overrun. A provision of 5% contingency is kept in the Project Cost to meet any cost overrun due to unforeseen events. Further sensitivity to increase in capital cost of Project cost, up to an extent of 5%, has been analyzed and debt servicing has been found to be Comfortable. Risk low

Cost & Time Overrun Risk

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Risk Analysis _________________________________________________________________ _______ Risk Mitigation Measure

Construction Risk Infrastructure Risk The project site has adequate transport infrastructure and connectivity to ensure smooth and timely transportation of heavy plant and machinery at Site. Risk Low

Technology Risk

The basic technology risk the project faces is probable breakthroughs in the field of Photovoltaic's in the next 8-12 years ,hence making the current technology obsolete . Risk Medium

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Risk Analysis _________________________________________________________________ _______ Risk Mitigation Measure

Performance Risk Fall of Performance Risk 25 years performance guarantee from both our Execution partners and from the firms we are procuring our cells . Risk : Low

Maintenance Risk Operational Risk

The company has already brought in experienced executives into the Project

Maintenance Risk

The company is bringing in experienced executives into the Project Management team. After successful execution of Project, the Company will strengthen the team by bringing in relevant manpower to operate the plant by adopting prudent practices. The project also has provision for sending relevant employees and operators for necessary training for managing and running the plant operations efficiently.

Risk Low

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Technology

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Technology ___________________________________________________________________
ABC of Photo Voltaic Solar cells sunlight [photons] hit the solar panel and are absorbed by semiconducting materials Electrons ( - ve charged) are knocked loose from their atoms, allowing them to flow through the material to produce electricity.

A photovoltaic module is a packaged interconnected assembly of solar cells.

Over 95 % of all solar cells are made from Silicon (Si). It is a basic P-N Junction

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Technology _________________________________________________________________
Solar Cells today are classified into three generations :

First Generation
1st generation accounts for 89% of 2007 -08s total production. Large-area, high quality and single junction devices , Silicon based standard PV cells . Single junction silicon devices are approaching the theoretical limiting efficiency of 33%. High production costs -unlikely to achieve cost parity with fossil fuel energy generation.

Second Generation
Second gen. uses new manufacturing techniques (vapour deposition, electroplating). 2nd generation technologies are faulted for poor conversion efficiencies and despite high Si prices were unable to gain significant market share. Most successful 2nd generation materials have been cadmium telluride (CdTe), copper indium gallium selenide, amorphous silicon, and micromorphous silicon. Materials are applied in thin films to supporting substrates (glass, ceramics) reducing material mass and costs In 2007-08 CdTe production represented 4.7% of total market share, thin film silicon 5.2%

Third generation
Third generation technologies enhance poor electrical performance of thin film technologies while maintaining low production costs. Current research is targeting conversion efficiencies of 3060%. There are a few approaches to achieving these high efficiencies: Multiple junction devices. Modifying incident spectrum (concentration). Use of excess thermal generation to enhance voltages or carrier collection.

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Technology _________________________________________________________________

In 2007-08 first generation solar cells accounted for 89.6% of commercial production, though the market share of these solar cells are declining. The manufacturing processes that are used to produce first generation cells are inherently expensive, meaning that these cells may take years to pay for their purchasing costs. A standard example of second generation cells would be the solar cells made by Nanosolar, which uses a special machine to print the cells at an extremely fast rate. Though these cells have only 10-15% conversion efficiency, the decreased cost more than makes up for this deficit and it is thought that second generation solar cells will surpass first generation cells in market share sometime around 2010. Second generation solar cells have the potential to be more cost effective than fossil fuel, though this may not occur until 2016 (est.) or later. The great advantage of second generation, thin-film solar cells, along with low cost, is their flexibility. Thin-film technology has spurred lightweight, aesthetically pleasing solar innovations such as solar shinglesand solar panels that can be rolled out onto a roof or other surface. Third generation solar cells are just a research target, and do not really exist yet. The goal of third generation solar cell research are low-cost, high efficiency cells. Some analysts predict that third generation cells could start to be commercialized sometime around 2020, but this is just a guess. Technologies associated with third generation solar cells include multi junction photovoltaic cells, tandem cells, nano structured cells to better pick up incident light, and using excess l thermal generation to enhance voltages or carrier collection. identia f n o C Strictly

Technology _________________________________________________________________
Solar cells Efficiency issues

Solar cell efficiencies vary from ~ 6% for amorphous silicon-based solar cells to ~ 41% with multiple-junction research lab cells.

Solar cell energy conversion efficiencies for commercially available multi crystalline Si solar cells are ~ 14-19%.

High efficiency cells are not always the most economical.

30% efficient multi junction cell based on exotic materials might well cost one hundred times as much as an 8% efficient amorphous silicon cell in mass production, while only delivering about four times the electrical power.

There are still operational and life span issues that have to resolved for 2nd and 3rd generation cells .

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Technology _________________________________________________________________ _______

Technology _________________________________________________________________

Technology chosen is based on not only the efficiency of the systems but also the long term survivability of the systems in harsh desert climates .

The system integration is a major factor in increasing the overall efficiency of the system .
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Government Role & Project Phases

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Government Role ______________________________________________________________________ Govt. of India and its various state governments have started playing a primary role in the development of the solar energy sector in India. This can easily be portrayed by the stated aims of the Jawaharlal Nehru Solar mission . The solar photovoltaic power plants are financially viable and profitable at todays technological stage only because of heavy Govt. subsidies ; starting from California to Germany to India . In the clearance department the Solar Power projects have an inherent advantage over other sectors .The primary clearances required by the solar power plant is an No objection certificate for the land usage and a Evacuation availability from GETCO s nearest 66KVA or higher substation. Govt. of India in 2010s budget has reduces and in some cases waivered the excise duty for the equipment used in alternative energy segment . CERC has made it mandatory for all power utilities to purchase 6% of tpower l iden ia f n o C generated by green technologies , for example solar, wind etc t ly Stric

Phase

Project Phrases _________________________________________________________________ _______

Activity Involved Parties Prerequesits 1Submission of Expression of interest Promoter N/A Promoters Background Successfully short listing of letter of interest Financial criteria Technical criteria Demand Draft of 50Lakh Application fees 4Application submission 5Letter of intent 6PPA Sign 7Power Plant Implementation 8Power generation 9Backward integration - Phrases Completed - Current Phrase
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2Acknowledgement On submitted letter of Interest GEDA 3 Invitation for Application GEDA

Promoters GEDA Successful short listing based on application

Successful evidence on finance & GEDA & Promoters technology Promoters Promoters PPA signed Timely Construction of the facility

Project Control Structure _________________________________________________________________

Board of Directors C.E.O. Scientific Advisor* Department Heads Financial Advisory Technology Partners

* Scientific Advisor is from Dept. of Energy Govt. of United States of America Solar research division

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Summery
_________________________________________________________________ The 5 MW solar PV power project . Cash infusion required only after the PPA [power purchase agreement ] has been signed with the Govt. ,guaranteeing us a steady cash flow for the next 25 years . The Power project is phase-I of sun shaktis expansion plan , Phase-II of the plan includes a growth of above 30% annually . A robust management team with a wide spectrum of experience . The complete proprietary details of Phase II will be provided only after first round of discussions . The segment in which Sun Shakti is operating is the fastest growing investment segment in the market .

Thank You

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