4.

2 Project Cost
In the year 1991-1992, India gives the permission to the private foreign investors to invest in
its power sector. Enron and General Electric agrees to invest in India and joined hand with
Maharashtra State Electricity Board (MSEB) to build the Dabhol Power Project.
Share Percentage owned by different company in Dabhol Power Project are :

% of share

10%

10%

80%

Enron General Electric Bechtel

The Dabhol Power Plant was to be operated in 2 phase. Enron has initially invested $300
million in this project.
Phase 1 :
 Lenders / Debt Funds :
Bank of America - $150 m
Overseas Pvt Investing Corp - $100 m
IDBI and other Banks of India given a total of $95m
Exim Bank of USA - $298 m
TOTAL DEBT IN PHASE 1: $643m

 Purchases:
Power Purchase Agreement was based on the CAPACITY & ENERGY expenses.
Initial Enron put the cost as Rs. 2.40 per KwH (initially proposed)
It would produce 695 MW (project size) (initially proposed)

 Main Raw Materials

It was using Naphtha as their main raw materials.

 Equity Funds/Equity Investors

Enron Power Corporation invested $223m (80% of the project)
Bechtel Inc - $28 million (10%)
General Electric also invested $28m (10%)
TOTAL EQUITY IN PHASE 1 : $279m
  The Return % given to the investors were 25.22%.

 Cost :
Overall Capital cost = Rs. 4.49 crore per MW.
Overall cost of Energy = Rs. 2.40 crore per MW
Total cost (in $/Kw) = 1326.62
Total Capacity(Mw) = 695
TOTAL COST OF THE PROJECT IN PHASE 1 = $920m

Phase 2:
 Lenders/Debt Funds
Domestic & offshore lenders has given $497m
Overseas Pvt. Investing Corporation - $60m
IDBI plus other banks of India has given $333m
Exim Bank of Japan lend $258m
Commercial Banks has given $265.8m
TOTAL DEBTS IN PHASE 2 : $1413.8m

 Purchases
Power Purchase Agreement was based on the CAPACITY & ENERGY expenses.
Initial Enron put the cost as Rs. 2.40 per KwH (initially proposed)
It would produce 1320 MW (project size) (initially proposed)

 Raw Materials
In Phase 2 the company used Liquified Natural Gas (LNG)
Cost of LNG : $250m
Other material cost : $1620.5m
Total cost : $1870.5m

 Equity Funds/Equity Investors

Foreign Sponsors invested $457m
TOTAL EQUITY IN PHASE 2 : $457m

 Returns to the Investors

The Return % given to the investors were 25.22%.

 Cost
Total Capacity(Mw) = 1320
Total cost (in $/Kw) = $1417.02m
TOTAL COST OF THE PROJECT IN PHASE 2 = $1.88 billion

ANALYSIS