Project Justification

Project Green 2 – Solar Electricity at CWP

July 14, 2022

 Document type : Project
Proposal

LOCATION: Cornwala Plant PAGE:- 1 of 14

Project Justification – Project Green

Contents

1 Executive Summary
2 Background 2
3 Project Proposal
4 Capex Detail
5 Cash Flows and Project evaluation Measures 8
6 Project Management and execution
7 Project milestones and deliverables
8 Project Technology and Equipment cost breakup
9 Environment Health and Safety
10 Building and storage facilities
11 Project Assumptions
12 Annexures

_____________________________________________________________________________________
This document is highly confidential and property of Rafhan Maize products Company Limited an affiliate
of Ingredion Incorporated. No third party exposure without prior approval from Rafhan
 Document type : Project
Proposal

LOCATION: Cornwala Plant PAGE:- 2 of 14

Project Justification – Project Green

1. Executive Summary

Since its inception in year 2004, the Cornwala Plant operation has been based
on electricity supplied by Faisalabad Electrical Supply Company (FESCO). The
sanctioned load at the plant is 8 MW, total connected load is 7.5 MW. Average
running load of the plant is 7.2 MW. In year 2017 the 12MW coal fired Co-gen
unit (installed at the site) was commissioned, which has been supplying
electricity for operations at CWP since then.

An exercise to review the existing Co-gen power generation requirements at

Cornwala Plant was completed this year, to assess the addition of a
photovoltaic power system and, it was established that the most viable, long-
term sustainable power supply option for the plant under within the current
site constraints is a 2.0MW AC capacity solar PV system. Following are the
highlights of the proposal:

1. System size recommended is 2.0MW (AC)

2. Capex required: US$ 1.36 Million, out of which 90% i.e. US$1.22m will be
funded by the subsidized Government loan, and 10% i.e. US$ 0.136m will be
equity.
3. This is a cost savings project, needed to fulfill the cost reduction and
sustainability agenda at Cornwala Plant.
4. The project will be substantially (90%) funded through State Bank of Pakistan
loan with maximum markup of 6% per annum. (Already approved – hence
financing has been arranged).
5. CO2 reduction of 6300 Tons / year will be attained.
6. Project NPV and IRR are USD 0.280m and 773% respectively. Payback period
is 2 months.

_____________________________________________________________________________________
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of Ingredion Incorporated. No third party exposure without prior approval from Rafhan
 Document type : Project
Proposal

LOCATION: Cornwala Plant PAGE:- 3 of 14

Project Justification – Project Green

2. Background

Cornwala Plant is located alongside the city of Jaranwala, which is part of Faisalabad
region.

Presently the grind capacity at CWP is 825 TPD. The plant produces Glucose, Different
grades of starches, feeds, and crude corn oil, and serves the industry / markets of the
country, along with sizable exports.

Almost all of the electricity consumption at Cornwala plant is generated at the Coal
fired Cogen unit located at site. The average monthly electricity provided to plant is
4,823,000 kWh. The total solar PV project size is 2.5MWp DC. The preliminary design
has been formulated in line with the maximum allowable solar generation per the safe
operational limits for Cogen unit capacity turndown. To fulfill this aim the space on both
the ground and the roof at the project site will be utilized.

The annual electricity consumption pattern is depicted in the graph as below:

_____________________________________________________________________________________
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of Ingredion Incorporated. No third party exposure without prior approval from Rafhan
 Document type : Project
Proposal

LOCATION: Cornwala Plant PAGE:- 4 of 14

Project Justification – Project Green

2021 Electricity Consumption

5,100,000

5,000,000

4,900,000

4,800,000
Electicity Consumption (kWh)

4,700,000

4,600,000

4,500,000

4,400,000

4,300,000

4,200,000
Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21 Oct-21 Nov-21 Dec-21

The total annual consumption at CWP is 58.0 million units, out which 3.73 million units are proposed to be
replaced by solar energy

3.0 Proposal
Inverters: As per the conceptual design of the project, the inverters used for the ground
component of the PV system are the Sungrow / Huawei / Equivalent SUN100 KTL
Inverters. The inverter has an AC output power rating of 100 kVA @40°C and a total of
21 inverters will be used. The DC/AC ratio for each inverter is 1.19 i.e. 119 kW (DC) on
each inverter (which is ideal considering the temperature profile of the site).

Solar Panels: The Solar panels used are standard monocrystalline mono-facial solar
panels from Trina Solar / Longi / Equivalent. There will be a total of 6470 solar panels of
540 W, each having a tilt angle of 15° and orientation true south to maximize total
power production. These panels also have a low open circuit voltage value along with a
low temperature coefficient; hence a greater number of panels can be connected in
series in a particular string, thereby reducing the number of total strings in the PV
system and the amount of DC cables that will be required for the project.

_____________________________________________________________________________________
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of Ingredion Incorporated. No third party exposure without prior approval from Rafhan
 Document type : Project
Proposal

LOCATION: Cornwala Plant PAGE:- 5 of 14

Project Justification – Project Green

The inverters will have an output range of 200 - 1000 V three phase AC voltage which
will be connected directly to the load side of the LV panel transmitted through horizontal
perforated cable tray.

Project Implementation: The implementation model considered for this project is the
EPC model in which Rafhan will have ownership of the project from the start and has
arranged financing for the equipment and EPC works contract.

Operational Labor/Manpower: 01 Electrical Engineer will be hired for the monitoring of

Operation & Maintenance of the Project (along with O&M contract). Cost is included in
the O&M cost taken for the project feasibility.

A site map showing the location of the plant and the total area that will be used for the
solar PV project is as shown below:

_____________________________________________________________________________________
This document is highly confidential and property of Rafhan Maize products Company Limited an affiliate
of Ingredion Incorporated. No third party exposure without prior approval from Rafhan
 Document type : Project
Proposal

LOCATION: Cornwala Plant PAGE:- 6 of 14

Project Justification – Project Green

The rooftops of Expeller, feed & Starch warehouses will be utilized for the rooftop PV
system, the construction of the roof of Feed, Expeller & Starch warehouses is double T-
Slab, which has been structurally evaluated for fitness for the installation.

4. Capex Detail:

1,075,7
Machinery and main Equipment (Including Imports)
38

Civil, Mechanical and Elect. Works

222,001

Contingency
64,887
Total
1,362,626

Expenditure schedule

- Total Expenditure: US$ 1.362 million

2022: US$ 0.26 million
2023: US$ 1.1 million

5. Cash flows and Project evaluation measures

The project will generate additional cash inflows mainly in the form of cost
savings. The project has good returns as mentioned below:
_____________________________________________________________________________________
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of Ingredion Incorporated. No third party exposure without prior approval from Rafhan
 Document type : Project
Proposal

LOCATION: Cornwala Plant PAGE:- 7 of 14

Project Justification – Project Green

KPI Value
Internal Rate of Return 773%
Net present Value US$0.28m

Detailed calculations have been given in the enclosed Annexure; Financial

Feasibility.

5.1 Project Income statement

The project will fetch pretax annual operating income of US$ 0.16m mainly in the
form of savings of electricity cost that is being generated at Cogen Plant by using
coal. (Detail calculations have been attached as annexure; financial feasibility).

6. Project Management and execution

The Project Equipment and associated systems shall be supplied by highly

reputed and well versed global and national companies. The Electrical
Department at CWP, in collaboration with the consultant and Projects
Department will facilitate import of equipment from overseas, supervise the
whole installation process, execute plant commissioning, and provide post
commissioning services. The civil, electrical & instrumentation and mechanical
installation work will be carried out by the reputed and tested contractors with
proven track record under the supervision of Rafhan.

The Suppliers will extend full guarantee on critical equipment and processes
including but not limited to:

 Solar panels
 Instrumentation, Sensors, and allied electronics
 Invertors
 Transformer

Permit / Regulatory requirements: These are being summarized as below:

_____________________________________________________________________________________
This document is highly confidential and property of Rafhan Maize products Company Limited an affiliate
of Ingredion Incorporated. No third party exposure without prior approval from Rafhan
 Document type : Project
Proposal

LOCATION: Cornwala Plant PAGE:- 8 of 14

Project Justification – Project Green

(a) Regulatory approvals of the Project footprint layout: This is not

required as all modifications and installations will be made in the existing civil
structure, and no modification will be required in the existing building
footprint

(b) Environmental No Objection Certificates (NOC) from EPA: A solar

project NOC will be needed from EPA, which is per the norms, part of the
work scope of EPC contractor.

(c) FESCO approvals / certificates and any other certification that is

applicable will also be part of scope of the EPC contractor.

7.0 Project Milestones and Deliverables

Project schedule / plan is as below

Start Date Project Approval.

1st to - Purchase Requisition Issuance for the imported

2nd equipment/material.
- LC Opening & Contract Signing for imported material.
Mont
- Start of design/drawing work and BOQ preparation for
h Mechanical, E&I etc.

- Complete detailed Engineering for Mechanical and E&I

3rd Month Works
- LC Opening & Contract Signing for imported equipment.

- Local equipment starts arriving at site.

5th to 8th - Inquiries and order placing for Mechanical and E & I
Month works.
- Civil works in progress.
th th
7 to 9 - Imported material starts arriving

_____________________________________________________________________________________
This document is highly confidential and property of Rafhan Maize products Company Limited an affiliate
of Ingredion Incorporated. No third party exposure without prior approval from Rafhan
 Document type : Project
Proposal

LOCATION: Cornwala Plant PAGE:- 9 of 14

Project Justification – Project Green

- Inquiries and order placing for Mechanical and E & I

Month works.
- Civil works in progress.

9th to 11th - Continuation and completion of installation works.

Month - Completion of civil works

11th to 13th - Start of Commissioning activities & Trial Start-Up.

Month Commercial Production.

The major milestones for the project are:

- Project Approval: Month 1

- LC opening for imported equipment: Month 3
- Imported Items delivery at site: Month 7
- Project complete: Month 11
- Project Commissioning: Month 12
- Project commercial operation: Month 13

6.0 Project Technology and Equipment Cost Breakup:

The project will be based on Latest solar technology. The electrical and control
equipment will meet Ingredion and Pakistan Standards. The critical equipment
cost break up is given below:

S.N
Item Cost (USD)
o
1 Solar Panels 740,000

2 Inverters 114,000

3 Datalogger 1,850

4 Weather Station 4,344

_____________________________________________________________________________________
This document is highly confidential and property of Rafhan Maize products Company Limited an affiliate
of Ingredion Incorporated. No third party exposure without prior approval from Rafhan
 Document type : Project
Proposal

LOCATION: Cornwala Plant PAGE:- 10 of 14

Project Justification – Project Green

6 Mechanical Structure Supply 175,220

7 Civil Works 22,928

8 DC Cable 70,958

9 AC Cable (inverter to LV) 61,137

10 Grounding system and cables 11,816

11 LV Panels 4,912

Electrical supplies (conduits, pipes and

12 66,721
accessories)

13 Electrical and Mech Labor 15,225

14 Detailed Engineering and Project Management 8,628

Subtotal 1,297,739

Contingency 64,887
Total 1,362,626

9.0 Environment Health and Safety

The management is fully cognizant of the EHS aspects of the project. All safety
measures will be taken to make the area safe for working. Ingredion EHS
standards including Electrical Arc Flash, Combustible Dust, noise control, fire
protection and machine safeguarding will be implemented. All heated surfaces
will be insulated and covered. Electrical cabinets, isolators, and equipment will be
protected with electrical overload circuit breakers. All construction and
installation will be as per required quality standard suggested for such types of
_____________________________________________________________________________________
This document is highly confidential and property of Rafhan Maize products Company Limited an affiliate
of Ingredion Incorporated. No third party exposure without prior approval from Rafhan
 Document type : Project
Proposal

LOCATION: Cornwala Plant PAGE:- 11 of 14

Project Justification – Project Green

operations. All National Environment Quality Standards will be fully maintained

and adhered to. The standard lux and noise levels will be met in the area.
There will no increase in pollution load on the existing environmental control /
treatment systems that are operational at the plant site.

10.0 Sustainability
Due to net replacement of 3.73 million kWhrs per annum of Cogen produced
electricity (generated using coal fuel) with solar electricity, it is estimated that
approximately 6300 tons per annum CO2 will get reduced from the existing
carbon footprint of the facility, and this is in line with our long-term sustainability
agenda, to substantially reduce the CO2 emissions.
Annual additional COD to WWTP: There will be no COD load from the project to
the Cornwala Plant WWTP.
Annual Solid Waste: Solar electricity is clean energy and solid waste resulting
from installation and operation of the solar project will be negligible.

11.0 Project Assumptions

(a) Project will be installed on 5 acres of land presently available unutilized at

CWP. Additionally roofs of some of the existing buildings will also be utilized for
solar panels installation.
(b) Project capacity is based on current operational limitation of maximum 2.0
MW turndown of Cogen unit.
(c) Project will not include reverse metering and hence no approval from
electricity regulatory authorities (like NEPRA etc) will be required.
(d) The utilities required (cleaning water and its drainage) are adequately
available to cover the proposed project.
(e) Project will be financed 90% on the basis Governmental scheme for bank loans
for solar projects (already approved and available). 10 % will be Ingredion
equity.
_____________________________________________________________________________________
This document is highly confidential and property of Rafhan Maize products Company Limited an affiliate
of Ingredion Incorporated. No third party exposure without prior approval from Rafhan
 Document type : Project
Proposal

LOCATION: Cornwala Plant PAGE:- 12 of 14

Project Justification – Project Green

The following assumptions (summarized in Table 6) have been applied to the

business case:

Description Assumptions

FX Rate Fx Rate (PKR 225/USD) is used for calculation

HESCO Tarif Rate $
kept constant Off peak rate used as per solar operation timeline
0.08/Kwh
Solar Tarif Sale $ 0.01/Kwh Kept constant
Solar Output Solar output reduced 0.4% year on year basis as consultant share
we avail financing facility from State Bank @ 5% as per State Bank
Weighted average cost of
of Pakistan loan policy. Application submitted through National bank
Capital
of Pakistan, and approved by State Bank of Pakistan
Financing Model Six month grace period and 10 Year 40 equal instalment
Maintenance Maintenance cost part of Solar Tarif that will be around $ 0.01/Kwh

Initial Year Depreciation
allowance- Solar Panel
Tax depreciation - Plant and
Machinery
90% as per Tax law Government of Pakistan set a special 90%
allowance
15% on Reducing Balance Method

Tax depreciation – Building 10% on Reducing Balance Method

01 Electrical Engineer will be hired for O&M of the project. Head

Additional Headcount count cost already included in Solar tariff $ 0.01/Kwh Or PKR 1.15
/Kwh
Increasing SG&A considered in the financial case since under
existing Pakistan Labor laws, every Manufacturing company must pay
SG&A
5% of its Profit before Tax to workers as worker's profit Participation
and further contribute 2 % Worker welfare fund
Note:-

Cash flows remained positive for 10 Year. So, IRR above than 100% and Payback period is less than
one year.

12.0 Annexures

Financial Feasibility and Calculations

_____________________________________________________________________________________
This document is highly confidential and property of Rafhan Maize products Company Limited an affiliate
of Ingredion Incorporated. No third party exposure without prior approval from Rafhan
 Document type : Project
Proposal

LOCATION: Cornwala Plant PAGE:- 13 of 14

Project Justification – Project Green

_____________________________________________________________________________________
This document is highly confidential and property of Rafhan Maize products Company Limited an affiliate
of Ingredion Incorporated. No third party exposure without prior approval from Rafhan