Final Report (Ankit Doveriyal, 15)

SUMMER INTERNSHIP REPORT
PROJECT APPRAISIAL AND FINANCIAL MODELLING

OF A THERMAL POWER PLANT
UNDER THE GUIDANCE OF

Mrs Indu Maheshwari, Dy Director, CAMPS, NPTI
&
Mrs. Priya Kumar, Senior Manager, Project Division, Power Finance
Corporation Limited
At
Power Finance Corporation, New Delhi
Submitted By
Ankit Doveriyal
Roll No. 15
MBA (POWER MANAGEMENT)
(Under ministry of Power, Govt. of India)

Affiliated to
MAHARSHI DAYANAND UNIVERSITY, ROHTAK

AUGUST 2013
DECLARATION
I, Ankit Doveriyal, Roll No 15, student of MBA-Power Management (2012-14) at

National Power Training Institute, Faridabad hereby declare that the Summer Training
Report entitled PROJECT APPRAISIAL AND FINANCIAL MODELLING OF A
THERMAL POWER PLANT is an original work and the same has not been submitted
to any other Institute for the award of any other degree.
A
Seminar
presentation
of
the
Training
Report
was
made
on
________________________ and the suggestions as approved by the faculty were duly
incorporated.
Presentation In-Charge
(Faculty)
Signature of the Candidate
Countersigned
Director/Principal of the Institute
ACKNOWLEDGEMENT
It is often said that life is a mixture of achievements, failures, experiences, exposures and
efforts to make your dream come true. There are people around you who help you realize
your dream. I acquire this opportunity with much pleasure to acknowledge the invaluable
assistance of Power Finance Corporation and all the people who have helped me through
the course of my journey in successful completion of this project.
I wish to express my sincere gratitude to my Company Guide, Mrs. Priya Kumar
(Senior Manager, Project Appraisal Division, PFC) for her guidance, help and
motivation. Apart from the subject of my study, I learnt a lot from her, which I am sure,
will be useful in different stages of my life. I would like to thank Mrs. Shweta Vithal
(Dy Manager, Project Appraisal Division) for her help in understanding and formulating
the model design and methodology as well as help me in acquitting to the Power Sector
and clearing my concepts and Mr. Natesh Sarma (Officer, Project Appraisal Division)
for his review and helpful comments.
I would like to thank Mr. Rakesh Mohan, Senior Manager (HR) for providing me
with this wonderful opportunity to work at Power Finance Corporation. I express my
thanks to Mrs. Indu Maheshwari, Dy. Director, Faculty guide, NPTI for her kind cooperation during the period of my summer internship.
I feel deep sense of gratitude towards Mr S.K.Chaudhary, Principal Director,
CAMPS(NPTI), NPTI and Mrs. Manju Mam, Director, Mrs. Indu Maheshwari,
Dy. Director, NPTI for arranging my internship at Power Finance Corporation and
being a constant source of motivation and guidance throughout the course of my
internship.
I am grateful to my friends who gave me the moral support in my times of difficulties.
Last but not the least I would like to express my special thanks to my family for their
continuous motivation and support.
Regards,
Ankit Doveriyal
Class of 2012- 2014 (NPTI)
ii
EXECUTIVE SUMMARY
Rapid economic growth has increased the burden of Indias infrastructure, one of the
countrys week spots. An infrastructure deficit is widely considered to be one of the
factors that could severely affect the economic growth of the country. In the past few
years, policy makers have recognized the importance of infrastructure in economic
growth and have made concrete efforts to accelerate infrastructure development.
Power Sector continues to lag behind despite the introduction of progressive measures.
Power shortages, increased tariffs, shortage of coal and dependence on imported fuel are
on rise, while the poor health of the distribution continues to inhibit the inflows of
investments which have possessed growth risk for the Indian Electricity Sector.
India's demand for electricity is likely to cross 300 GW, in few years earlier than most
estimates. Meeting this demand will require a fivefold to tenfold increase in the pace of
capacity addition.
With the growing demand of power, there is huge potential of investment in power
sector of India. The power sector which is in the concurrent list of the Indian
Constitution is under the purview of both the central government and the state
government. The power sector which was earlier dominated by public sector undertaking
is now seeing effective participation of the private sector which is now accountable for
28% of power generation in the country.
Power Finance Corporation Ltd. (PFC) a public financial institution established In 1986
by the Ministry Of Power as a Financial Institution (FI) to provide financing solution to
large capital intensive power project across India including generation, transmission,
distribution and RM&U projects.
My Summer Internship Project is Project & Entity Appraisal of Thermal Power Plant.
It resolves around the appraisal of the power project promoted by the company ABC
Power Limited, which has come for financial assistance of its Capital Expenditure and
Working Capital Requirements. The project is being appraised after evaluating it on the
various parameters set by Central Electricity Regulatory Commission (CERC) and the
set parameters at PFC.
My work also include appraisal of Promoters of the project which is based on set
parameters at PFC .The aim of the appraisal is to finally arrive at the decision: whether
PFC should finance the project or not.
As per the guidelines of PFC the project is evaluated into two parts: Project Appraisal
and Entity Appraisal. The format of the project report will be in the form of Agenda
Note as per PFC norms.
Project Appraisal is carried out by Project Appraisal Department which evaluate the
financial and technical viability of the project.
iii
Entity Appraisal is carried out by Entity Appraisal Department and involves

evaluation of the promoter of the company on its financial flexibility and stability, the
analysis of their business operations and the competence of the management.
In the end the project involves the subjective analysis on both Project & Entity fronts and
come up with the risk involved.
The project reports ends with the Recommendations on whether to finance the project or
not.
iv
LIST OF ABBREVIATIONS
BTG
Boiler, Turbine & Generator
BU
Billion Units
CEA
Central Electricity Authority
CERC
Central Electricity Regulatory Commission
COD
Commercial Operation Date
DPR
Detailed Project Report
EPC
Engineering, procurement & construction Contract
FSA
Fuel Supply arrangement/agreement
FTA
Fuel Transport Agreement
GCV
Gross Calorific Value
GoI
Government of India
IPP
Independent Power Producer
IDC
Interest During Construction
Kcal
Kilo Calories
KV
Kilo Volts
KWh
Kilo Watt Hour
MoP
Ministry of Power
MoEF
Ministry of Environment & Forest
NOC
No Objection Certificate
O&M
Operations & Maintenance
PFC
Power Finance Corporation Ltd.
PGCIL
Power Grid Corporation of India Limited
PLF
Plant Load Factor
PPA
Power Purchase Agreement
REC
Rural Electrification Corporation
LIST OF FIGURES
Figure 1: Power Sector Structure...4
Figure 2: Energy Production in Billion kWh (2010)..5
Figure 3: All India Generation capacity.7
Figure 4: Business Strategy of PFC.13
Figure 5: Project Finance Structure..19
Figure 6: Actual power supply position in Tamil Nadu...40
vi
LIST OF TABLES
Table 1: All India Region wise generation capacity..6
Table 2: Different Rating by major rating agencies.11
Table 3: Sanctions & Disbursements for the respective financial years..14
Table 4: Major Projects Funded by PFC..14
Table 5: Financial Highlights for the year 2011-12.14
Table 6: Approvals and Agreement Status...22
Table 7: Preliminary appraisal.24
Table 8: Detailed Appraisal..26
Table 9: Approval and Agreement Status........38
Table 10: Project Cost Details..39
Table 11: Power requirement and availability for Tamil Nadu40
Table 12: Project details...41
Table 13: Snapshot of project financial projections.45
Table 14: Sensitivity analysis sheet.46
vii
TABLE OF CONTENTS
DECLARATIONi
ACKNOWLEDGEMENT ii
EXECUTIVE SUMMARY. iii
LIST OF ABBREVIATIONS... v
LIST OF FIGURES. vi
LIST OF TABLES.. vii
CHAPTER 1: INTRODUCTION...1
1.1 INDIAN POWER SECTOR....1
1.2 POWER SECTOR REFORMS2
1.3 INTRODUCTION TO INDIAN POWER SECTOR...5
1.4 POWER SECTOR: DEVELOPMENTS & CURRENT STATUS..7
1.5 MAJOR ISSUES..8
1.6 INITIATIVES..8
1.7 OPPORTUNITIES...9
CHAPTER 2: COMPANY PROFILE.....10

2.1 BACKGROUND........10
2.2 MISSION....10
2.3 CREDIT RATINGS...10
2.4 OBJECTIVE OF PFC.....11
2.5 CLIENTS OF PFC.....12
2.6 RANGE OF SERVICES12
2.7 REFORMS.13
2.8 SWOT ANALYSIS....15
CHAPTER 3: OBJECTIVE AND SCOPE..16

3.1 OBJECTIVE OF THE PROJECT..16
3.2 SCOPE........16
viii
CHAPTER 4: LITERATURE REVIEW AND RESEARCH

METHODOLOGY...17
4.1 LITERATURE REVIEW...17
4.2 PROJECT FINANCE.18
4.3 PROJECT APPRAISAL19
4.4 CALCULATION OF TARIFF...20
4.5 RESEARCH METHODOLOGY...21
CHAPTER 5: PROJECT APPRAISAL & FINANCIAL MODELLING....22

5.1 GUIDING PRINCIPAL FOR PROJECT APPRAISAL22
5.2 PROJECT & ENTITY APPRAISAL.23
5.3 FINANCIAL MODELLING..28
CHAPTER 6: CASE STUDY29

6.1 PROJECT PURPOSE & SCOPE...29
6.2 PROJECT DETAILS..29
6.3 PROJECT COST....38
CHAPTER 7: RISK ANALYSIS & SWOT ANALYSIS...47

7.1 RISK ANALYSIS..47
7.2 SWOT ANALYSIS49
7.3 LIMITATIONS..50
CHAPTER 8: CONCLUSION, RECOMMENDATION & LEARNING52
8.1 CONCLUSION..52
8.2 RECOMMENDATIONS...53
8.3 LEARNING....53
BIBILIOGRAPHY.....54
ANNEXURE...55
ix
CHAPTER 1: INTRODUCTION
1.1.
INDIAN POWER SECTOR
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.
At the time of independence in 1947, the country had a power generating capacity of
1,362 MW. Prior to independence the power sector was regulated by The Indian
Electricity Act, 1910 which was the first basic legal framework for the electricity sector
in the country. Supply of energy was the main concept around which various
provisions were woven. The act talked about the Licence for generating and supplying
electricity, Competition in generation and supply areas, Framework of wires and works,
Licensee and Consumer relationship, Safety Measures and Theft of electricity in the
power sector.
Post independence our priorities changed, the supply of electricity which was limited to
cities and towns was to be spread across the country, especially in rural areas. This was
seen as a social responsibility of the Government to provide electricity to all. Thus The
Electricity Supply Act, 1948 was passed in the Central legislature to facilitate the
establishment of regional co-ordination in the development of electricity which
envisaged formation of State Electricity Boards (SEB) as an arm of State Government to
discharge their responsibility of providing electricity to all. The act mandated that every
State shall constitute a SEB. SEBs were entrusted with the task of developing power
generation, transmission as well as distribution facilities. The Act also called for
formation of Central Electricity Authority (CEA), which was envisaged as the main
technical arm of the Central Government. It also had to perform the role of technical
advisor to the State Government, SEB, Generation Company or any other agency and
form regulations on certain aspects of which the most important was the technoeconomic clearance of generation projects.
However, in 1970s SEBs started making losses largely on account of political
interference, mismanagement and inefficiencies in operations. Flat rate tariff (near zero
usage charge) were introduced for the agricultural connections and high tariff was
imposed on industrial & commercial users, such cross-subsidy led to increase in theft
and the losses increased. As the boards were not able to make money, they became
increasingly dependent on the government for funding. Because of the shortage of funds,
SEBs were unable to increase generation capacity and were not maintaining their assets.
Therefore, SEBs went into a vicious cycle that led to further drop in the performance of
their operations and subsequently increased their losses. In 1980s, the SEBs were able to
show about 3% of statutory returns with the help of flawed accounting system but in
practice the accruals were not sufficient for growth and the boards sought assistance
from state governments. In this situation, the government decided to create central
generating utilities i.e. National thermal power corporation (NTPC) & National Hydro
Power Corporation (NHPC) to improve the condition of power sector. The government
also tried to connect the generating entities scattered all over the country non-uniformly
ProjectAppraisal&FinancialModeling
1|P a g e
by forming The National Grid and thus trying to overcome generation demand supply
gap prevalent in different states.
In response to the balance-of-payment crisis in 1991, the government of India decided to
open up various sectors in the economy including power sector. The power generation
sector was de-licensed and the private parties were allowed to setup generating facilities.
The change in notification gave numerous incentives to private sector such as 16% return
on equity for plants that operated at plant load factor (PLF) of 68.5%, five year tax
holiday, two part tariff, equity requirements as low as 20% of project cost and selective
guarantees from central government for payment default by SEBs. This liberal set of
policies initially created excitement among the private investors to setup plants.
However, the excitement soon subsided because of the large political risks and payment
capacity of the already bleeding SEBs. The state boards losses were increasing mainly
due to theft and had to increasingly depend upon government subsidy. Less than 17,000
MW were added vis--vis a planned addition 40,000 MW in the period 1971-1992.
Further, such generous incentives given by the government to the foreign investors
wherein almost all the risks were borne by the state board drew lot of criticism. SEBs
were earning 12.2% internal rate of return on their own plants and therefore paying 16%
return to IPPs which did not make sense.
Under the 1910 and 1948 Acts, powers of regulation including tariff regulations were
vested on the Government. This concentration of power in the Government and
Government organizations resulted in inefficiencies of various sorts, the most prominent
manifestation was being lack of rational and professional approach to tariff fixation. As
part of reforms strategy, it was, therefore, considered necessary to distance the sensitive
aspect of tariff regulation from the political executives on the independent Regulatory
Commissions. Thus, Government brought in The Electricity Regulatory Commissions
(ERC) act, 1998 which was the first step taken by the government to move itself away
from the regulatory aspect of the power sector and fixation of tariff for the energy being
used by the consumer. By this act the various losses occurring at the SEBs level and the
bottleneck caused due to bureaucracy prevalent in the government organizations and
political interference were tried to minimize by formation of Central Electricity
Regulatory Commissions (CERC) at central level and State Electricity Regulatory
Commissions (SERC) at every state. The CERC and SERC had main responsibility of
tariff determination for Central Government and State Government owned generating
stations respectively.
Bullish economic growth story of any country depends on a robust power generation &
delivery model.
1.2. POWER SECTOR REFORMS

1.2.1. THE ELECTRICITY ACT 2003: A REVOLUTION
Competition with regulatory oversight is the framework around which the Electricity
Act, 2003 is woven - competition to encourage efficiency in performance and regulatory
oversight, to safeguard consumers interest and at the same time ensure recovery of costs
for the investors. The journey of distancing of Government from regulations that started
in 1998 has culminated in The Electricity Act of 2003. According to the new law The
2|P a g e
Government is distanced from all forms of regulation, viz., licensing, control over
generation, captive generation, tariff fixation etc. Now the Government remains there
only as a facilitator.
The Act talks about the need and ways of implementing Competition in the power sector
while considering the concerns associated with it, about the electrification of rural areas
and about liberalization of power sector. While Liberalization is the mantra, the
Electricity Act does not encourage an unbridled growth for the sector. The regulatory
Commission have been envisaged as the watchdogs which have a responsibility to put a
check on the cost of generation through powers to regulate tariffs for supply of electricity
from a generating company to the distribution licensees on long term power purchase
agreements, as also with power to look into the costs of generation.
The act also provides the bases for formation of National Electricity Policy (NEP),
National Tariff Policy (NTP), Rural Electrification, Open access in transmission, phased
open access in distribution, Mandatory SERCs, licence free generation and distribution,
power trading, mandatory metering and stringent penalties for theft.
SERCs provide Regulatory guidelines on quality of service standards that are to be
achieved and maintained by the utility and ensure their compliance by providing for
Complaint Redressal Mechanism & Appointment of Ombudsman. SERCs mentions
about the consequences that are to be followed by the utility for non-compliance of the
guidelines.
1.2.2. NATIONAL ELECTRICITY POLICY
In pursuance of the provisions of the Electricity Act, 2003 the Central Government came
out with National Electricity Policy on 6th February 2005.
The policy prescribes the following objectives:
Providing universal access in next five years for which significant capacity
addition and expansion would be required.
Meeting the demand fully by 2012 and to have spinning reserves after meeting
peak requirements.
Bringing about improvements in quality of supply at reasonable rates.
Increasing per capita availability to over 1000 kWh per year by 2012.
Ensuring a minimum lifeline consumption of 365 kWh per year per household as
a merit good by 2012.
Financial turnaround and attainment of commercial viability of all entities in the
sector.
Protection of consumers interest.
1.2.3. NATIONAL TARIFF POLICY
In pursuance with section 3 of the Electricity Act 2003, the Central Government notified
the Tariff Policy on 6th January 2006. According to the Act, the CERC and SERCs are
to be guided by the Tariff Policy in framing its regulations.
It lays out the following objectives:
Ensuring availability of electricity to consumers at reasonable and competitive
rates;
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Ensuring financial
f
viaability of thee sector and
d attracting investmentss;
Promotingg transparen
ncy, consisteency and predictability
y in regulattory approaaches
across jurisdictions an
nd minimiziing perceptiion of regullatory risks;;
Promotingg competitio
on, efficienncy in operaations and improvemen
i
nt in qualitty of
supply.
1.2.4. R
RURAL EL
LECTRIFIICATION P
POLICY
Electriicity has beeen recogniized as a bbasic human
n need. It is the key to acceleraating
econom
mic growthh, generatio
on of empployment, elimination
n of povert
rty and hu
uman
development espeecially in ru
ural areas. T
The Rural Electrificatiion Policy was notifieed in
Augustt 2006, withh the objecttive of imprroving acceess and quallity of electtricity supplly in
rural aareas so as to ensure rapid
r
econoomic develo
opment by providing
p
eelectricity as
a an
input for producctive uses in
i agricultuure, rural industries etc. For thhis the Cen
ntral
governnment has launched in April, 20005 an ambittious schem
me Rajiv G
Gandhi Gram
meen
Vidhyuutikaran Yoojana (RGGVY) aimedd to establish
h
1. Rural Electricity Disstribution B
Backbone (REDB) with
w
at leasst a 33/11 KV
substation;
2. Village Electrificatio
E
on Infrastruucture (VE
EI) with at
a least onne Distribu
ution
transformeer in a villag
ge or hamleet;
3. Stand alonne grids with
h generationn where grid
d supply is not feasiblee.
penditure too the tune of
o 90% is channelized
c
d through REC,
R
Subsiddy towards capital exp
which is a nodaal agency for
f implem
mentation off the schem
me. Electriffication off unelectriffied Below Poverty Lin
ne (BPL) hhouseholds is
i financed with 100% capital sub
bsidy
@ 15000/- per connnection in all
a rural habbitations. Th
he Managem
ment of Ruural Distribu
ution
is undeertaken throough franchisees. A thrree-tier quallity monitorring has beeen built into
o the
schemee. RGGVY
Y has thuss resulted in huge investments
i
s in providding electrricity
connecctions in rurral India.
OWER SECTOR STR
RUCTURE
E
1.2.5. IINDIAN PO
Figure 1: P
Power Secto
or Structure
Sourrce: powerm
min.gov.in
al&FinanciaalModeling
ProjjectAppraisa
4|P a g e
1.3 INTRODUCTION TO INDIAN POWER SECTOR

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 meagre 1,362 MW in 1947 to
more than 225,113 MW by May 2013, a gain of almost 200 times in capacity addition.
India's per capita energy consumption is 778kWh in 2011 -- a rise of almost 400 percent
since 1980. 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. Over 65 per cent of
India's electricity is produced in thermal facilities using coal or petroleum products.
Almost 19 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 which
constitutes about 12 percent of the total energy generation.
Figure 2: Energy Production in Billion kWh (2010)

5,000
4,500
4,326 4,207
4,000
3,500
3,000
2,500
2,000
1,500
1,145 1,037
1,000
922
630
621
500
573
497
485
381
Source: wikipedia.org
India is one of the main manufacturers and users of energy. Globally, India is presently
positioned as the fifth largest manufacturer of energy, representing roughly 2.4% of the
overall energy output per annum. It is also the worlds fifth largest energy user,
comprising about 3.3% of the overall global energy expenditure per year. In spite of its
5|P a g e
extensive yearly energy output, Indian Power Sector is a regular importer of energy,
because of the huge disparity between oil production and utilization.
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 above 778 kWh per annum. Ever since 1990s, Indias gross domestic product
(GDP) has been increasing very rapidly and it is estimated that it will maintain the pace
in 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 2,25,133 MW as on May 2013.
Though, this is still not enough.
All the Regions in the Country namely Northern, Western, Southern, Eastern and NorthEastern 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 19.1% in the
Southern Region to 1.2% in the Western Region. As per CEAs forecast for 2013-2014
among the regions, only the Eastern region would have a surplus of 10.2%. Region-wise
picture in regard to actual power supply position in the country during the year 2013 -14
is given below:
Table 1: All India Region wise generation capacity
Sl
No.
1
2
3
4
5
Region
Coal
Gas
DSL
Northern 33073.50 5031.26 12.99

49584.51
8988.31
17.48
Western
Southern 25182.50 4962.78 939.32
23727.88
190.00
17.20
Eastern
60.00
1187.50
142.74
N.
Eastern
0.00
0.00
70.02
6
Islands
7
All India 131628.39 20359.85 1199.75
Source: Power ministry as on 31-5-2013
Total
Nuclear
Hydro
R.E.S
Total
38117.75
58590.30
31084.60
23935.08
1390.24
1620.00
1840.00
1320.00
0.00
0.00
15467.75
7447.50
11353.03
4113.12
1242.00
5589.25
8986.93
12251.85
454.91
252.68
60794.75
76864.73
56009.48
28503.11
2884.92
70.02
153187.99
0.00
4780.00
0.00
39623.40
6.10
27541.71
76.12
225133.10
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 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.
As per CEAs forecast for 2013-14 18,432 MW of capacity is expected to be added,
comprising 15,234 MW of thermal power, 1,198 MW of hydropower and 2000 MW of
nuclear power. Capacity addition during 2012-13 stood at 20,502 MW.
6|P a g e
1.4 POWER SECTOR: KEY DEVELOPMENTS AND CURRENT

STATUS
Indian government forecasted the economic growth to be 6.1% - 6.7% for the year 20132014 and to sustain this growth it is imperative for the power sector to grow with the
same pace. Therefore, it becomes essential to assess the power sector by analysing its
current status, the key challenges faced by it, and its future growth drivers.
Power is considered to be a core industry as it facilitates development across various
sectors of the Indian economy, such as manufacturing, agriculture, commercial
enterprises and railways. Though India currently has the fifth largest electricity
generation capacity in the world pegged at 2,25,133 MW, the growth of the economy is
expected to boost electricity demand in coming years.
Figure 3: All India Generation Capacity
250000
225133.1
200000
153188
150000
100000
39623
50000
34444.12
27542
4780
0
Thermal
Nuclear
Hydro
RES
Total
Captive
Source: powermin.gov.in
India saw a total capacity addition of approximately 54,000 MW during the 11th Five
Year plan, of which approximately 47 per cent was contributed by the central
government, 34 per cent from the state government, and a little over 19 per cent from the
private sector. As per the Planning Commission report capacity addition of 88000MW is
estimated in 12th five year plan. Some examples of top public sector companies include
National Thermal Power Corporation (NTPC), Damodar Valley Corporation (DVC) and
National Hydroelectric Power Corporation (NHPC). Some key companies in the private
sector include Tata Power and Reliance Energy Limited. In India, power is primarily
generated from thermal and nuclear fuels, hydro energy and renewable sources.
Indias power generation capacity has significantly increased since 2008, and is also
expected to show a strong growth in the future. However, India faced a power deficit of
approximately 8.5 per cent and a peak demand deficit of over 10 per cent in FY11
primarily due to fuel shortage. This shortage can be attributed to aggregate technical and
commercial (AT&C) losses, which is about 30 per cent with a high variance across
various utilities. Therefore, it is essential for the government to work proactively to
increase the sectors generation capacity in a sustainable manner by addressing key
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challenges, such as supply shortage and distribution losses without damaging the
environment, to attain a high growth rate during the 12th Five Year Plan.
To cope with the demand deficit, the Indian government has implemented various
progressive measures to maximise the countrys power generation capacity and improve
distribution. Some examples of such measures include rural electrification programmes
and ultra mega power projects. In particular, the inflow of foreign direct investments is
expected to step up capacity addition significantly. The government has allowed FDI of
up to 100 per cent through the automatic route in all segments of the power sector except
for nuclear energy. Consequently, the sector has drawn about US$ 4.6 billion investment
over the past decade, of which US$ 1.6 billion came in FY12 alone.
Hence, we can comfortably say that the Indian power sector has strong future growth
prospects. Consequently, we need to assess the various policy initiatives that have had a
positive impact on the sector, and capitalise upon them further to ensure a strong future
growth.
1.5 MAJOR ISSUES

The most important sector in infrastructure is the power sector. There is about 90 GW of
capacity under various stages of construction and attending to the outstanding issues
facing these projects must be given a high priority. However, given the time lag involved
in implementing power projects, it is necessary to ensure that projects which will be
commissioned only in the Thirteenth Plan can also move ahead satisfactorily. Almost
half the capacity in the Twelfth Plan is projected to come from the private sector and the
position is likely to be the same in the Thirteenth Plan. Private sector investors in power
generation have faced many problems in recent times. They include
(i) Inadequate supply of domestic coal and unanticipated increase in prices of imported
coal.
(ii) Difficulties with clearances for captive mines, as well as for generating stations.
(iii) Land availability
(iv) Poor financial health of some state electricity distribution companies which are the
main customers and which suffer from insufficient tariff adjustment plus
inefficiencies in collection.
(v) Inadequate availability of domestic natural gas.
(vi) Inadequate fuel supply agreements for coal.
(vii) More recently, difficulties in obtaining finance from both external and domestic
sources.
1.6 INITIATIVES
PPP IN POWER
To attract private sector participation, government has permitted the private sector to set
up coal, gas or liquid-based thermal, hydel, wind or solar projects with foreign equity
participation up to 100 per cent under the automatic route. The government has also
launched Ultra Mega Power Projects (UMPPs) with an initial capacity of 4,000 MW to
attract 160200 billion of private investment. Out of the total nine UMPPs, four UMPPs
at Mundra (Gujarat), Sasan (Madhya Pradesh), Krishnapatnam (Andhra Pradesh) and
Tilaiya Dam (Jharkhand) have already been awarded. The remaining five UMPPs,
8|P a g e
namely in Sundergarh District (Orissa), Cheyyur (Tamil Nadu), Girye (Maharashtra),

Tadri (Karnataka) and Akaltara (Chattisgarh) are yet to be awarded. To create
Transmission Super Highways, the government has allowed private sector participation
in the transmission sector. A PPP project at Jhajjar in Haryana for transmission of
electricity was awarded under the PPP mode. Further, to enable private participation in
distribution of electricity, especially by way of PPP, a model framework is being
developed by the Planning Commission.
ADVANCED TECHNOLOGIES
It has already been announced that 50 per cent of the Twelfth Plan target and the coalbased capacity addition in the Thirteenth Plan would be through super-critical units,
which reduce the use of coal per unit of electricity produced. Supercritical (SC) power
plants, which operate at steam conditions 560oC/250 bars, can achieve a heat rate of
2,235 kCal/kWh as against a heat rate of 2,450 kCal/kWh for sub-critical power plants.
The specific CO2 emission for super-critical plants is 0.83 kg/ kWh as against 0.93
kg/kWh for sub-critical plants. Super-critical technology is now mature and is only
marginally more expensive than sub-critical power plants. Determined efforts are needed
to achieve these results, and prioritisation of coal linkages will be necessary to
incentivise adoption of super-critical technology.
ULTRA SUPER CRITICAL
An Ultra Super Critical (USC) coal-based power plant has an efficiency of 46 per cent
compared with 34 per cent for a sub critical plant and 40 per cent for a Super Critical
(SC) plant. Thus, with an USC or SC plant, the savings in coal consumption and
reduction in CO2 emission can be substantial. A 10,000 MW power plant will generate
60 billion units of electricity per year at around 70 per cent load factor. It has a specific
heat of 1,870 kcal/kwh compared to 2,530 kcal/kwh for a sub-critical plant. Thus, every
unit generated with USC will save 0.165 kg [(2,530-1,870)/4,000] coal of 4,000 kcal/kg;
and 60 billion units will save 9.9 million tonnes of coal per year.
1.7 OPPORTUNITIES
1. Long-term health of power sector seriously undermined (losses Rs 70,000 crore per
year). However, aggregate technical and commercial (AT&C) losses are slowly
coming down. State Governments must push distribution reform.
2. Hydropower development seriously hindered by forest and environment clearance
procedures. Need to look at special dispensation for these States, especially
Arunachal Pradesh.
3. A time-bound plan to operationalize development and evacuation of hydropower
from NER required. Road connectivity is an issue for expeditious project completion.
4. Given limited connectivity of NER with other parts of the country (through Siliguri
corridor), access through Bangladesh needs to be explored.
5. Electricity tariffs not being revised to reflect rising costs. Regulators are being held
back from allowing justified tariff increases.
9|P a g e
CHAPTER 2: COMPANY PROFILE

2.1 BACKGROUND
PFC was established in July 1986 as a Development Public Financial Institution (PFI)
under Section 4A of the Companies Act, 1956. It is dedicated to the Power Sector. It is a
wholly owned by Government of India. A Nav-Ratna public Sector Undertaking. It has
highest safety ratings from domestic and international credit rating agencies and
also ISO 9001-2000 Certification for the Project Appraisal System.
PFC provides financial assistance to all types of power projects like Generation,
R&M, Transmission, Distribution, system improvement, etc. PFC encourages optimal
growth and balance development of all segments of power sector through assigning
priorities for financing different categories of projects. The state sector utilities are the
main beneficiary of PFCs financial assistance. PFC has also been funding private sector
projects for last 5-6 years.
2.2 MISSION
PFC's mission is to excel as a pivotal developmental financial institution in the power
sector committed to the integrated development of the power and associated sectors by
channelling the resources and providing financial, technological and managerial services
for ensuring the development of economic, reliable and efficient systems and
institutions.
* 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.
2.3 CREDIT RATINGS

Placed at Sovereign Rating by International Rating Agencies - Moodys and
Standard & Poors for long term foreign currency debt.
Placed at the highest safety ratings by accredited rating agencies in India - CRISIL and
ICRA
Domestic borrowings include term loans and bonds; External borrowings take the form
of Syndicated Loans, Fixed & Floating Notes.
Consistently rated Excellent by the Government of India (GOI) for overall performance
against the targets set in Memorandum of Understanding (MoU) between GOI and PFC.
10|P a g e
Table 2: Different
D
Raating by majjor rating agencies
a
DOM
MESTIC RA
ATING AG
GENCY
CRISIL
L
ICRA
Internaational Ratinng Agency
Moodyys
Finch
Standaard & Poorss
Sourcee: PFC webssite
RUPEE BO
ORROWING
G
Long
g Term
AAA
A
LA
AAA
Shoort Term
P1+
A1+
Baa3
BB
BBBB
BB-
At ppar with
sovereeign Rating
g
2.4 OBJECTIV
VE OF PF
FC
PFC inn its presentt role has thee followingg main objecctives:
To rise thee resources from internnational and

d domestic sources at tthe compettitive
rates and terms
t
and co
onditions annd on-ward lend these funds on opptimum bassis to
the power projects in India.
To act as catalyst to
o bring insttitutional, managerial,
m
operationaal and finan
ncial
improvement in the fu
unctioning oof the state power utilitties
To assist state
s
power sector in caarrying out reforms
r
and
d to support the state po
ower
sector duriing transitio
onal period oof reforms
ProjjectAppraisa
11|P a g e
2.5 CL
LIENTS OF PFC
State Electtricity Boards
State Poweer Utilities
State Electtricity/Poweer Departmeents
Other Staate Departm

ments (likee irrigation
n
Departmennt) engaged
d in the deveelopment of
the power project
Central Poower Utilitiees
Joint Secctor Powerr Utilities and Cooperative Societies

S
Municipal Bodies
Private Secctor Power Utilities
2.6 RA
ANGE OF SERVIICES
Fund Based
Rupee Terrm Loan
Foreign Cuurrency Terrm Loan
Buyers Liine of Crediit
Working Capital
C
Loan
n
Loan to Eqquipment manufacturer

m
rs
Debt Restrructuring/ Refinancing

R
Take out Financing

F
Bridge Loan
Lease Finaancing
Bill Discouunting
ProjjectAppraisa
12|P a g e
Noon-Fund Baased
Guarantees
Exchange Risk Manag

gement
2.7 RE
EFORMS
S & REST
TRUCTU
URING IN
NITIATIV
VES
PFC haas been actiively persuaading State Govt. to iniitiate reform
m and restruucturing of their
t
power sector in order to make
m
them commerciaally viable. In this reegard follow
wing
initiativves have beeen taken:
PFC is prroviding fin

nancial assiistance to reform-min
nded Statess under relaaxed
lending criiteria/expossure limit noorms.
PFC has decided

d
to provide techhnical/financcial assistan
nce to State Govts. / Po
ower
Utilities foor structurall reforms off the State Power
P
Secto
or.
Reform Group
G
constiituted in PF
FC to advicce and assissts the State
te Govt. /Po
ower
Utilities too formulate suitable resstructuring programmes
p
s.
Figure
F
4: Buusiness Stra
ategy of PFC
Sourcce: PFC Website

We
ProjjectAppraisa
13|P a g e
Table 3: Sanctions & Disbursements for the respective financial years

Particulars
Financial Year
2007-08
2008-09
2009-10
2010-11
2011-12
Sanctions
69498
57030
65466
75197
69024
Disbursement
16211
21054
25808
34121
41418
Source: PFC website

Table 4: Major Projects Funded by PFC
Name of the Project
Capacity (MW)
Cost (Crs)
Amount funded
Malwa TPS
2x500
4054
2730
Khaperkheda TPS Extn.
1x500
2191
1753
Kameng HEP
4x150
2485
1740
Koradi TPS
3x660
10019
6250
Mejia Extn. Unit
2x250
2800
1456
Sagardighi TPS PH1
2x300
2754
1925
Chandrapura Extn. Unit

7&8
2x250
2053
1435
Panipat TPS Stage V
2x250
1785
1428
Source: PFC website

Table 5: Financial Highlights for the year 2011-12
Profit after Tax
Rs 3032 Crore
Loans and Grants Sanctioned
Rs 69024 Crore
Loans and Grants Disbursed
Rs 41418 Crore
Net Worth
Rs 19493 Crore
Reserves and Surplus
Rs 19388 Crore
No. of Employees
379
Source: PFC website
14|P a g e
2.8 SWOT Analysis

Strengths
Govt. of Indias undertaking.
Good quality management
Well established, long standing relations in the power industry Implementing

agency for Mops schemes including AG &SP and APDRP Highest credit rating
(due to government ownership)
Weaknesses
Poor asset quality with most of the lending to SEBs, whose loan repayment
capabilities in the long run is doubtful.
Concentration risk attributed to lending in single sector.
Opportunities
Power sector presents significant investment opportunities.
Providing investment gateways & consultancy for domestic and external

financial agencies.
Having new business opportunities to cover the entire range of activities in the
Power sector.
Threats
PFC has significant exposures entities which are loss making, financially
weak an dare defaulting to most of their creditors. Delinquencies by these
entities to PFC could impair the currently sound Balance Sheet of PFC.
With increasing exposure to SEBs, their weak balance sheet may affect PFCs
creditworthiness.
15|P a g e
CHAPTER 3: OBJECTIVE AND SCOPE

3.1 OBJECTIVE OF THE PROJECT
The objective of the Project Report is:
1. Finding out the factors affecting a projects capital and operational expenditure
which in turn have an impact on the cash outlay and revenue flow of the project and
their study. Thus, performing Project Appraisal of a 660 MW Coal Based Supercritical Thermal Power Project.
2. A financial model of a 660 MW Coal Based Super-critical Thermal Power Project so
as to study the effect of above factors on tariff and revenue flows.
3. To find out probable values of IRR, DSCR among other ratios using the financial
model to study the feasibility and attractiveness of a 660 MW Coal Based Supercritical Thermal Project.
3.2 SCOPE
Scope of project covers installation, commissioning, operation and maintenance of 660
MW coal fired Thermal Power Plant and associated systems.
Indian power sector wants to ramp up the installed capacity to meet the growing demand.
Large Power Projects enjoy economics of scale and help in lowering the tariff of supply.
This project helps to find out the factors that will affect the project cost and thus have an
impact on total investment and operational expenses of the project. The assessment and
analysis of these factors will help in determining the project cost, the associated risks and
ultimately the tariff for supply from the project and thus the revenue and cash flows.
Such information is vital in making financial decisions and project appraisal. The study
may also help in understanding of ways to mitigate the risks.
16|P a g e
CHAPTER 4: LITERATURE REVIEW AND

RESEARCH METHODOLOGY
4.1. LITERATURE REVIEW
The literature survey was carried out by reviewing various journals on project appraisal
and financial model of a power plant. Few journals reviewed are:
P.L.Kingston [1973] in IBM System Journals suggested, The use of computers in
financial planning has become an area of increasing interest to financial management and
data processing users. Computing systems facilitate the use of financial models in that
they allow for the storage and retrieval of a representation of a financial plan and also for
the evaluation of the consequences of what if conditions. Thus a financial model is a
tool that can assist in the entire business planning process whether it be forecasting, cash
management, or projection of profits. This paper presents introductory concepts that
provide a basis for systems design and implementation of financial models. Described
are the terminology, the basic components of financial models, and two general
approaches to the construction of these models.
W Wetekamp [2011] suggests how Net Present Value (NPV) can be used as a proper
tool to ensure effective project management. The author proves that investment project's
appraisal methods, such as e.g. NPV, can and should be used as an ongoing monitor of
project health. What is more, even in case of project turbulences Net Present Value can
be used as a key instrument for finding the most appropriate solutions.
Robert Lundmark et al [2012] analyzed how market and policy uncertainties affect the
general profitability of new investments in the power sector, and investigate the
associated investment timing and technology choices. They developed an economic
model for new investments in three competing energy technologies in the Swedish
electric power sector. The model takes into account the policy impacts of the EU ETS
and the Swedish green certificate scheme. By simulating and modeling policy effects
through stochastic prices the results suggest that bio-fuelled power is the most profitable
technology choice in the presence of existing policy instruments and under our
assumptions. The likelihood of choosing gas power increases over time at the expense of
wind power due to the relative capital requirement per unit of output for these
technologies. Overall the results indicate that the economic incentives to postpone
investments into the future are significant.
Reports of similar projects for thermal power plants were also reviewed. The reports of
previous batches on similar topic and the referenced data were helpful in determining
data for this project. The literature available within the company helped a lot in
understanding Project Finance and factors of project cost which are summarized as:
17|P a g e
4.2 PROJECT FINANCE

Project financing is an innovative and timely financing technique that has been used on
many high profile corporate projects, including infrastructural and power. Employing a
carefully engineered financing mix, it has long been used to fund large scale natural
resource projects, from pipelines and refineries to electric-generating facilities and
hydroelectric projects. Increasingly, project financing is emerging as the preferred
alternative to conventional methods of financing infrastructure and other 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 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 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 loan transaction rather
the identification, analysis, allocation and management of every risk associated with the
project is given more importance.
Project finance is the financing of long term infrastructure and industrial projects based
upon a complex financial structure where project debt and equity are used to finance 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
operations. 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.
18|P a g e
Figure 5: Project Finance Structure

Debt
Equity
Sponser(s)
Lenders
Dividend
DebtService
O&M
Support
ElectricityPayments
ProjectCompany
EquipmentProvider
Connections
Construction
Contracts
Licenses
Certification
CivilWorks
ZoningLocal
Permits
Electricity
Deliveries
RegulatoryAuthorities
PowerPurchaser
Obligationto
buyelectricity
Tariffforsuch
electricity
Source: PFC Library

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.
4.3 PROJECT APPRAISAL

It is an assessment of a project in terms of its economic, social and financial viability. A
lending financial institution makes an independent and objective assessment of various
aspects of an investment proposition. It is defined as taking a second look critically and
carefully at a project by a person who is in no way involved or connected with its
preparation. He is able to take independent, dispassionate and objective view of the
project in totality, along with its various components. There are some steps for Project
appraisal.
Management Appraisal: Management appraisal is related to the technical and

managerial competence, integrity, knowledge of the project, managerial competence of
the promoters etc. The promoters should have the knowledge and ability to plan,
implement and operate the entire project effectively. The past record of the promoters is
to be appraised to clarify their ability in handling the projects.
19|P a g e
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.
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,
preoperative 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 ratio and current
ratio.
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.
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.
Environmental Analysis: Environmental appraisal concerns with the impact of

environment on the project. The factors include the water, air, land, sound, geographical
location etc.
4.4 CALCULATION OF TARIFF BASED ON CERC REGULATIONS

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).
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.
20|P a g e
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 1 months for pit-head generating
stations and two months for non-pit-head generating stations.
Cost of secondary fuel oil for two months.
Operation and maintenance expenses for one month.
Maintenance spares @ 20% of operation and maintenance expenses.
Receivables equivalent to two months of capacity charges and energy charges for
sale of electricity.
Energy Cost: It is also calculated on norms of CERC, the yearly consumption of

primary fuel and secondary fuel is taken for the calculation.
DPR (Detailed Project Report) of various projects of similar kinds helped in
understanding the project technically. Reports and notifications available on various
websites listed in bibliography also helped in adding value to the project. The data
mainly obtained by interviews with experts and experience of plant operations and form
the basis of assumptions taken for modelling. The data thus analysed was processed in
model for finding out the required ratios and check the project feasibility.
4.5 RESEARCH METHODOLOGY

Methodology used for the project:
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.
Calculating the cost of generation and relevance
Calculation of DSCR, IRR and sensitivity analysis.
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
21|P a g e
CHAPTER 5: OVERVIEW OF PROJECT

APPRAISAL & FINANCIAL MODELLING
5.1. GUIDING PRINCIPAL FOR PROJECT APPRAISAL AT PFC
Offering credit is an operation fraught with risk. Before offering credit to an
organization, its financial health must be analysed. Credit should be disbursed only after
ascertaining satisfactory financial performance. Based on the financial health of an
organization, PFC assigns integrated ratings. These credit ratings are used to fix the
interest rate, exposure limit and security criteria.
5.1.1. ENTITY ELIGIBILITY CRITERIA: While considering the eligibility of an
entity, last two year Auditors 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.
5.1.2. 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.
Clearances/Agreements required for implementation of project:
1. Land Acquisition
2. Water Availability
3. Stack Height: Airport Authority of India
4. Forest Clearance: Such that no sanctuary, reserve, national park within the project
5. No defence establishment
6. Ministry of environment and Forest
7. Fuel Supply Arrangement/Agreement through various coal linkages
8. Fuel Transportation Arrangement
9. PPA for selling Electricity
10. Transmission agreement with Transmission agency
11. Pollution Control Board
Table 6: Approvals and Agreement Status
Major Clearances/ Agreements
S No
Requirement
Agency
Status
Consent to establish /
NoC
Tuticorin Airport
Certified
Environment Clearance
MoEF
Forest clearance
MoEF
Water Drawl
SG
The Company has

applied for the
clearance.
The Company has
applied for the clearance
Agreement made
22|P a g e
Airport Authority of
India (AAI)
Tamil Nadu
Pollution control
board (TNPCB)
Stack height Clearance
Pollution control board

NOC for power plant
Land Availability
State Government
Primary Fuel
Coal India Limited
Transportation of Fuel
Aspinwall Co Ltd
10
Transmission Line
PGCIL
EPC / package contract
Consolidated
Construction
Consortium Ltd.
11
Approved
All the required
standards of Pollution
control board are met
600 acres has been
acquired
Long term agreement
made on 15 April 2010
Fuel Transport
Agreement made
Open Access and
Transmission
Agreement made
Agreement made on 18
June 2010
5.1.3. 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
and the price contingencies 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.
5.1.4. PROJECT COST-BENEFIT ANALYSIS: Calculate Financial Internal rate of
return (FIRR). Techno-economically sound with Financial IRR not less than the
minimum required rate. Sensitivity analysis is also done.
5.1.5. PROJECT ANALYSIS: The project is evaluated on various parameters and then
ranked according to the PFC guidelines. The method is explained later on.
5.2. PROJECT & ENTITY APPRAISAL

The Project Analysis is intended for arriving at a relative measure of merit for the
project. This model involves:
1. Entity rating
2. Project rating
5.2.1. ENTITY APPRAISAL METHODOLOGY
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 set of measures.
23|P a g e
It is a two-stage process i.e. preliminary evaluation and detailed evaluation in which all
the promoters are evaluated for their ability to contribute equity, carry the project to
completion and operate the project as per the contracts.
PRELIMINARY APPRAISAL
In this, the scrutiny is based on the analysis of quantitative parameters, so as to access
the financial strength of the promoters, track record of the project implementation and
the credit worthiness. 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 two categories for Preliminary
Evaluation:
Business analysis
Financial flexibility
I. 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:
a) Market Position
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.
b) Financial Risk
It evaluates the past financial performance of the promoting companies. Performance
of at least the last three years is evaluated. Financial risk parameter is represented by 5
ratios, which cover various aspects of companys financial performance:
Table 7: Preliminary appraisal
Ratios
Meaning of Scoring
Attribute
Return on Capital Employed
Quantitative
Return on Investment
(ROCE)
Operating Margin
Quantitative
Profitability of the Business
Debt Service Coverage Ratio
Quantitative
Coverage Ratio
(DSCR)
Total Debt to Net Worth
Quantitative
Gearing
Cash Flow From Operation
Quantitative
Cash Flow
to Total Debt
Source: PFC Library
Return on Capital Employed (ROCE)

ROCE = PBIT/ Opening capital employed
24|P a g e
Here, Capital Employed = (Capital + Reserves + Short term debt + Long term debt
evaluation 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
Debt Service Coverage Ratio (DSCR)

DSCR = (PBIT Taxes)/ (Repayment due to Long term Loan + Interest on long
term and Short term loans)
Total Debt/Total Net Worth

Total debt/ total net worth = (Long term loans + Short term loans + Working
Capital loans)/(Capital + Reserves Revaluation reserve Loss brought forward
Intangible Assets)
Cash Flow from Operation / Total Debt

Cash flow from operations/ Total debt = Cash flow from Operations/ (Long term
loans + Short term loans + Working Capital Loans from Banks)
II. 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
Ratios
Equity Funding Potential
Bridge Finance Ability
Track Record of Fund raised
Aggregate Project cost
Handled
Meaning
Quantitative
Quantitative
Attribute being Evaluated

Equity Raising Potential
Quarterly cash surplus from
operations
Funds raised in last 10 years
Projects established in last 10
years
Quantitative
Quantitative
Source: PFC Library
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.
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.
25|P a g e
Track Record of Fund Raised: This technique is basically used to judge the
promoters 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.
DETAILED APPRAISAL
It involves Qualitative Analysis of Promoter Company. The scoring of all the factors is
on a four-point scale. The factors are judgmental and the model provides broad
guidelines for the evaluation for the same. It involves analysis under two categories
parameters for Detailed Evaluation:
Management risk
Management past experience
I. MANAGEMENT RISK
It evaluates two factors:
Table 8: Detailed Appraisal
Ratios
Managerial Competency
Business and Financial
Policy
Source: PFC Library
Meaning
Quantitative
Competency in running the

business
Risk Propensity
Quantitative
II. MANAGEMENT EXPERIENCE

Ratios
Meaning
Experience in Power Sector
Quantitative
Experience in Setting the

Project Size
Quantitative
Experience in India
Quantitative
Experience in dealing with

Developed Economies
Quantitative
Preparedness of the group to

Execute the Project
Project Preparedness

Power Sector Experience
Project Management Capability
Source: PFC Library
26|P a g e
5.2.2. PROJECT RATING

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 parameters point and their
allocation are also discussed on the set of standards.
Quantitative Parameters
First full year cost of generation w/o RoE.
Levellised tariff/ cost of generation with RoE and tax
Average DSCR
Qualitative Parameters
Power off take
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
Experience of the EPC contractor
Commercial terms of Contract
O&M
o Past Experience
o Management Team and efforts
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.
27|P a g e
5.3. FINANCIAL MODELING: A TOOL FOR PROJECT

APPRAISAL
In every project finance deal, where everyones financial security rests on the future
performance of a new undertaking, a thorough analysis of the projects finances under a
arrange of assumptions is prerequisite for arranging debt and equity funding, financial
model play a crucial role in decision-making.
5.3.1. 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.
5.3.2. 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.
An indication of tariff levels required for achieving appropriate returns.
Preparation of sensitivity analysis.
28|P a g e
CHAPTER 6: CASE STUDY

6.1 PROJECT PURPOSE AND SCOPE
PURPOSE
To bridge the nations energy deficit, both average and peak load, by capacity addition of
660 MW by setting-up Coal fired Thermal Power Project based on super critical
technology at Tamil Nadu, India.
SCOPE
Scope of this project covers installation, commissioning, operation and maintenance of
660 MW with Super critical & Pulverised Coal fired boiler and associated systems.
The Scope shall broadly cover:
660 MW power plant and associated systems.
Construction and commissioning of the Balance of Plants (BoP) required for
efficient reliable and safe operation of the plant.
Installation of BTG, their auxiliaries and commissioning.
Construction of water intake system for the project site.
Transportation Arrangement for Coal to the Project site.
Power evacuation system including transmission lines.
Construction of facilitation infrastructure such as administration building.
6.2 PROJECT DETAILS

6.2.1 LOCATION
The location of the proposed plant is in Tamil Nadu. The project site is located at a
distance of about 14 kms from the National High way and 15 kms from Trichendur town.
The site elevation is +12 m above mean sea level. The site terrain is generally plain
requiring minimum efforts to grade them suitable for construction of the project.
The site was selected considering the followings:
SNo
Geographic Items
Location
Tamil Nadu State
Nearest Railway Station
Thoothukkudi
Road Approach
Madurai Tiruchendur- Manapad
Altitude
+12 m above MSL
Nearest Airport
Thoothukkudi
Details
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Nearest Port
Thoothukkudi
Rainfall (Annual)
600 mm
Climatic Conditions
Tropical Climate
Latitude / Longitude
8o48N / 78o10E
10
Soil bearing capacity
25 T/M
There is no cultivation in the project site and rehabilitation of resident population from
the project site does not arise. Around the project site there is no reserve forest within 15
Km radius.
6.2.2 LAND
The project is being implemented in Tamil Nadu. The company has already acquired 600
acres of land and site development works will commence shortly. The land is currently
not in use and there are no inhabitants requiring rehabilitation or resettlement.
Specifications
Land area(Acres)
Plant area
260
Ash disposal
130
Colony
10
Green belt others
100
Others
100
Total
600
The site identified for the Project is generally plain requiring minimum efforts to grade
them suitable for construction of the project. . Around the project site there is no reserve
forest within 15 Km radius. The Company has paid Rs. 50 Crore towards allotment of
land and development works.
The Company proposes to use the allotted land for setting up Main Power Plant, colony
and Ash Dyke requiring about 400 acres. The remaining allotted land, about 100 acres,
would be used for Green Belt development. The balance land of about 100 acres would
be acquired by the Company in due course. 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. 20 Crore.
6.2.3 WATER
The requirement of water for the plant will be for meeting the requirement of make up
for the water system, dust suppression system in coal handling plants, ash disposal
30|P a g e
system and the D.M. water plant which will be supplying the power cycle make up
requirements. In addition the water requirements will be for drinking and service
purposes.
The total requirement of water for the plant will be around 150 m/hr for the project.
Water requirement for the plant
Sl No.
Item
Quantity (m/hr)
ACW System make up
80
Power Cycle make up
45
Service Water Requirement
15
Portable Water Requirement
10
Total
150
ABC Ltd. has made an agreement of minimum SG portable water supply of 4000m3/day
of SG portable water by SG. A raw water reservoir of 25200m3 capacity to hold 7 days
requirement for plant requirement of water will be constructed at the plant site. Air
cooled condenser for turbine is proposed. Water drawl approval has been obtained by the
company.
The basic features of the sweet water system and auxiliary cooling water for the
proposed station will be proposed to buy from prospective water suppliers. Air cooled
condenser is proposed for condensing steam. At the Plant, a water reservoir will be
installed to meet 7 days requirement of the plant.
The overall cost of water arrangement as estimated by the Company is about Rs. 90
Crore and has been considered in the Project cost.
6.2.4 SUPER CRITICAL TECHNOLOGY
The Proposed Project is based on Super Critical Boiler Technology instead of more
prevalent Sub-Critical Boiler Technology in India. The basic difference between the two
technologies is the steam pressure at which the boiler is operated. In case of Sub Critical
Technology the operating pressure in boiler is less than 19 MPa as against 24 MPa in
typical subcritical power plant. The supercritical power plant can achieve considerably
higher cycle efficiencies with resulting savings in fuel costs and reductions in CO2 and
other emissions.
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 subcritical technology based plant, due to fewer thick section
components allowing increased load change rates. Typical average availability of super
31|P a g e
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.
6.2.5 TECHNOLOGY
Thermodynamic cycle
Thermodynamic reheat cycle. The thermodynamic reheat cycle consists of steam
generator, steam turbine generator with condenser, the Condensate extraction and boiler
feed pumps along with H.P & L.P feed water heaters & deaerator.
Technical and performance parameters
This project is based on supercritical technology. The critical pressure point of water and
steam is 22.1 MPa, below this pressure it is called sub-critical pressure and above this
pressure it is called as supercritical pressure. In the supercritical region, co-existence of
water and steam is not present, therefore in the absence of steam/water mixture, the
recalculating boiler technology adopted for subcritical pressure could not be used. This
was the key to the advancement of cycle efficiency through the adoption of economic
and reliable once-through supercritical boilers.
The drive for enhancing the efficiency of generating plants in and environmentally
friendly manner has been realized mainly through advancing the steam conditions, i.e.
increasing pressure and temperature. This led to the development of some new power
generation technologies like integrated gasification combined cycle (IGCC) and
pressurized fluidized bed boilers (PFB).
Boiler Feed Pump
Three nos., horizontal, multistage, centrifugal type boiler feed pumps will be provided.
Two nos. pumps will be turbine driven with steam extracted from turbine & one no
pump will be motor driven as standby. Each boiler feed pump will have one matching
capacity single stage booster pump. The booster pump will take suction from feed water
storage tank and discharge into the suction of corresponding main boiler feed pump
32|P a g e
which in turn, will supply feed water to boiler through the high pressure heaters and feed
control station.
Condensate extraction pumps
The condensate extraction pumps will be vertical, multi stage enclosed canister type with
flanged connection driven by electric motor. Two nos. condensate extraction pumps are
used in this system.
Supercritical Boilers
Different boiler technology is used which is the critical requirement in the adoption of
supercritical pressure and temperature. With supercritical pressure boiler need to increase
the wall thickness of the pressure components and also use advanced materials for its
effective working.
Super critical steam turbine
Steam turbine is of 3000rpm and is designed for main steam parameters of 247kg/cm2 &
540C before emergency stop. High pressure steam turbines must be designed to
withstand the higher pressure and temperature. Typical feedwater temperatures are
around 275C to 290C compared to around 235C to 250C for sub-critical plants. With
supercritical pressures, because of the greater steam pressure range in the turbine from
inlet through to the condenser, there is greater scope for including an extra stage or
stages of feedwater heating. This will further increase the cycle efficiency.
6.2.6 PRIMARY FUEL
The primary fuel for the Proposed Project would be domestic coal. The Company
proposes to use coal available from CIL mines.
Coal India Limited has made a LoA with the company for use of coal in the Proposed
Project. The Company has approved the agreement. The average calorific value of the
coal is expected to be about 3400 kcal/kg. Considering this Gross Calorific Value and
PLF of 85% the coal requirement of the Project works out to be about 3771700 TPA.
The Company has estimated the capital investment of Rs. 900 per tonne at an escalation
of 5% p.a and the same has been incorporated in the overall Project Cost.
6.2.7 SECONDARY FUEL
HFO, which is the secondary fuel for pulverized coal, will be used for flame stabilisation
at low loads and for supporting purposes. Heavy fuel oil will be supplied from oil depot
by means of truck. Two HFO storage tanks each of capacity 1000m with necessary
heating arrangement within the tank will be provided. The estimated maximum annual
requirement of HFO is 4914 KL. Capital investment of Rs 50 per kg at an escalation of
4% p.a has been estimated.
LDO system will be designed for 7.5 % of BMCR, which will be considered sufficient to
introduce heavier grade fuel. The light diesel oil will have provision for supply to the
steam generator for startup purpose. The estimated maximum annual requirement of
LDO is 1000 KL.
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6.2.8 TRANSPORTATION
Coal will be transported from the Indian Coal fields to the Paradeep Port by Rail and
from the port to the Manappadu Port located near to the project site by ship. Coal
unloaded from ship will be stored in a separate coal yard to be set up by prospective Coal
sellers at Manappadu port and coal will be supplied at the plant boundary by conveyors.
Calorific value of Indian F grade coal will be in the range of 3400 kcal/kg. Rail route
already exists upto Tiruchendur. About 12 km of rail route from Tiruchendur to project
site is under approval. For transportation of coal, the Company would enter into Coal
Transportation Arrangement (CTA) with the Indian Railways.
Due to the availability of port facilities for transportation of coal from the mines, it is
convenient and economical to unload and transport the coal to the plant. Coal will be
also be transported from the port to the Manappadu Port located near to the project site
by ship. Alternatively trucks will also be used for coal transfer from port to plant.
Company has made a logistic agreement with Aspinwall Co Ltd for transportation of
coal from port and railway station to the plant.
6.2.9 EPC CONTRACT
Under an EPC contract, the contractor designs the installation, procures the necessary
materials and builds the project, either directly or by subcontracting part of the work.
EPC contract for this project is been given to Consolidated Construction Consortium
Ltd. It is proposed to entrust the entire work of project execution covering all civil
works, electrical and mechanical systems to a single EPC (Engineering, Procurement and
Construction) Contractor who will take overall responsibility for timely project
execution and plant performance and provide guarantees for the same.
SCOPE
The EPC Contractors scope of work includes design, engineering, manufacture,

supply, erection, testing and commissioning within the Power Plant site.
The EPC Contractor would be responsible for all basic and conceptual
engineering, detailed system engineering, design & drawings for all mechanical
and electrical systems, detailed designs and construction drawings for all civil
works, manufacture of equipment as applicable, procurement of sub-contracted
equipment and materials, review of sub-contractors design and engineering,
inspection and expediting of sub- contracted equipment, transport of equipment
and materials to site, stores management at site, overall site management
covering construction, erection and commissioning activities and performance
testing for the complete Power Plant.
The contractor agrees to provide all civil and structural works including supplies
of cement, reinforcement steel and structural steel etc.
The lump sum amount of Rs 524 crore represents the lump sum fixed price towards the
services to be provided by the contractor, pursuant to the scope of work under this
Agreement. The contractor shall complete all the works as per project schedule approved
by owner, pursuant to various conditions of this agreement, within 30 months from the
start of project commencement date.
34|P a g e
6.2.10 OPERATION AND MAINTENANCE

In order to ensure a high level of performance of the power station, it is proposed to
entrust the operation and maintenance of the power station to an experienced O&M
Contractor. In order to ensure that the design and construction of the power station
incorporates all necessary features required for easy and efficient operation and
maintenance of the proposed power plant, the proposed O&M Contractor will also be
consulted during the review of EPC contract documents, plant design features,
operational and maintenance features of plant systems and equipment.
O&M Contractors general manager would have primary responsibility for the operation
& maintenance of the power station. O&M Contractors site organisation is expected to
comprise four broad functional areas viz. operations, maintenance, engineering and
administration.
Operation of Power Plant, coal and ash handling systems, water systems including water
treatment system, switchyard and other auxiliary plant. Operations manager would be
overall in charge of operations, all other operation personnel would work on three - shift
basis. Shift personnel manpower planning for key areas has been generally done on
(3+1) concept to take into account leave taken by shift personnel.
Maintenance of all mechanical and electrical plant, control systems, buildings, roads,
drainage and sewage systems, etc., operation of the plant workshop, planning for
scheduled maintenance works and deciding requirement of spare parts.
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.
6.2.11 INFRASTRUCTURAL REQUIREMENTS
Construction Power
The company has received approval for drawl of construction power from nearby
substation of Tamil Nadu Power Distribution Company Ltd. (TNPDCL).
Construction Water
The total water requirement for the project is 2000 m3/day. This water will be sourced
from nearby desalination plant. The requirement of construction water for potable and
service purposes will be met by the nearby desalination plant located within the allotted
land for the Project. The Company has taken over the desalination plant along with the
auxiliary and paid about Rs. 50 Crore for the same.
6.2.12 EVACUATION OF POWER
The power generated from the plant will be evacuated at 400 KV through PGCIL /
TNEB grid lines. Three / Four 400 KV transmission line circuits are proposed from
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400KV switch yard to Udangudi STPP Substation for further connectivity to southern
grid. Companys generation project shall implement, maintain and operate dedicated
transmission system for immediate evacuation of power from their generation projects.
a)
Companys Power generation switchyard-tuticorin pooling station 400kV D/c

quad/high capacity line.
b)
Two nos of 400kV bays each at Companys switchyard & Tuticorin Pooling
POWERGRID station.
The cost of the transmission line is estimated by the Company is about Rs. 52 Crore.
6.2.13 ENVIRONMENTAL ASPECTS
The project site is located at a distance of about 14 kms from the National High way and
15 kms from Trichendur town. There is no cultivation in the project site and
rehabilitation of resident population from the project site does not arise. Around the
project site there is no reserve forest within 15 Km radius.
Since all necessary pollution control measures to maintain the emission levels of dust
particles and sulphur dioxide within the permissible limits would be taken and necessary
treatment of effluents would be carried out, there would be no adverse impact on either
air or water quality in and around the power station site on account of installation of the
proposed plant.
Ash Handling System
The fly ash generated in thermal power stations has commercial value because of its
usage in cement and construction industries in various forms. Fly ash generated from the
proposed power plant would be commercially utilized in one or more of the following
industries, to the extent possible
a. Manufacture of fly ash bricks
b. Manufacture of aerated wall blocks and panels
c. Fly ash Aggregate
d. Land reclamation
e. Ready Mixed Fly Ash Concrete
f. Utilisation in Roads/Paving
g. Use in cement manufacturing using fly ash in combination
h. Manufacture of fly ash bricks
i. Export of Fly ash to countries like Bangladesh and Middle East.
Water Handling System

Hydrochloric acid and caustic soda would be used as reagents in the proposed water
treatment plant. The acid and alkali effluents generated during the regeneration process
of the ion exchangers would be drained into an underground neutralising pit. The
effluent would be neutralised by the addition of either acid or alkali to achieve the
required pH.
36|P a g e
Waste water from the Coal yard suppression system and leaching water is collected in
the settling tank. The clear water will be disposed to the nallah through CEMS. The
Sludge will be dried in a Drying Pond and then Reused.
Sewage water from power plant and canteen will be collected in the Anaerobic
treatment pond and from there it will be sent to the clarifier. The treated water will be
used for horticulture purpose. The oily waste water will be treated in an Oily Water
Separator. The clear water is disposed through CEMS and the Oily Sludge is disposed
offsite.
Air Handling System
The height of the stack which disperses the pollutants have been fixed based on the
above guidelines of the Indian Emission Regulations. The electrostatic precipitators
which remove most of the fly ash from the flue gas, thereby limiting the quantity of fly
ash emitted to atmosphere.
By selecting a suitable furnace and burner for the steam Generator, NOx formation has
been avoided and no additional equipment for NOx control is required. Although there is
no statutory stipulation for regulation of NOx emission, the boiler will be designed for
maximum of 750 mg/Nm3 with provision of low NO burners. Dust nuisance due to Coal
handling would be minimised by providing suitable dust suppression/extraction systems
at crusher house, junction towers etc. For the coal stockyard, dust suppression system
would be provided. Boiler bunkers would be provided with ventilation system with bag
filters to trap the dust in the bunkers.
Noise Handling System
As per State Pollution Control Board, Ambient noise level for Industrial area will be
Sl. No
Time
dB (A)
1.
2.
Day Time 6 AM to 9 PM
Night Time 9 PM to 6 AM
75
70
The above noise level at plant boundary during normal operation is ensured by proper
selection of the system. Controlled noise level from originating equipment and green
belts around the plant area. Project clearances received from statutory authorities, Tamil
Nadu State Pollution Control Board (TNPCB) and the concerned agencies of the
Government of Tamil Nadu and India.
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.
Clearances/Agreements required for implementation of project:
1. Land Acquisition
2. Water Availability
3. Stack Height: Airport Authority of India
4. Forest Clearance: Such that no sanctuary, reserve, national park within the project
5. No defense establishment
37|P a g e
6. Ministry of environment and Forest

7. Fuel Supply Arrangement/Agreement through various coal linkages
8. Fuel Transportation Arrangement
9. PPA for selling Electricity
10. Transmission agreement with Transmission agency
11. Pollution Control Board
Table 9: Approval and Agreement Status
Major Clearances/ Agreements
S No
Requirement
Agency
Status
Consent to establish /
NoC
Tuticorin Airport
Certified
Environment Clearance
MoEF
Forest clearance
MoEF
Water Drawl
SG
Stack height Clearance
Pollution control board

NOC for power plant
Land Availability
State Government
Primary Fuel
Coal India Limited
Transportation of Fuel
Aspinwall Co Ltd
10
Transmission Line
PGCIL
11
EPC / package contract
Consolidated
Construction
Consortium Ltd.
The Company has applied

for the clearance.
The Company has applied
for the clearance
Agreement made
Airport Authority of
India (AAI)
Tamil Nadu Pollution
control board
(TNPCB)
Approved
All the required standards
of Pollution control board
are met
600 acres has been
acquired
Long term agreement
made on 15 April 2010
Fuel Transport
Agreement made
Open Access and
Transmission Agreement
made
Agreement made on 18
June 2010
6.3 PROJECT COST

6.3.1 COMPONENTS OF PROJECT COST
The Project is estimated to be set up at an aggregate cost of Rs. 4251 Crore comprising
of expenditure towards Land, EPC Cost, Transmission Line, Coal Transportation
Arrangement, Water Arrangement, Preliminary & Preoperative Expenditure,
Contingencies, Interest During Construction Period and Margin Money for Working
Capital. A summary of the components of Project cost is presented below:
38|P a g e
Table 10: Project Cost Details

Sl No.
Particulars
Total Cost
Land & Site Development
50
Total Plant & Equipment
2038.48
Civil Works
545
Electric Works
135
Miscellaneous
146.5
Total Hard Cost
2914.98
Overhead & Pre-Op. Expenses
114.59
656.20
Working Capital Margin
565.43
Total Soft Cost
1336.22
(in crore) Total Project Cost
4251
6.3.2 FINANCING PLAN

The tentative financial plan for the proposed project is as follows:
Particulars
Cost (Rs
Crore)
Percentage
Debt Equity Ratio
3.00
Equity
25%
1062.80
Debt
75%
3188.40
Upfront Equity
51.5%
547.342
Total
100%
4251
6.3.3 DEMAND AND SUPPLY

Inspite of 18,382 MW of installed capacity the state of Tamil Nadu is struggling to fulfil
its electricity demand. The electricity demand in the State had increased but the capacity
of the generating facilities had dropped due to inefficiencies resulting in shortfall. Most
of the districts in Tamil Nadu face power cuts lasting over six hours. Between April 2012
and February 2013, the energy and peak shortage of power in Tamil Nadu were 17.4 %
and 12.3 % respectively of the demand.
39|P a g e
Electricity deficit in the state has increased from 1% in 2005-06 to 11% in 201112. Between 2005-06 and 2011-12, electricity requirement grew at CAGR of 9%, while
availability only grew at around 7% leading to increasing electricity deficits.
Figure6:ActualpowersupplypositioninTamilNadu
Requirement
Availability
%deficit
90000
12%
11%
80000
10%
70000
8%
8%
20000
85685
76705
69668
64208
61499
60445
47872
47570
30000
54194
53853
40000
76293
71568
6%
80314
75101
7%
50000
65780
63954
MU
60000
4%
3%
2%
2%
10000
1%
6%
1%
0%
0
FY2005
FY2006
FY2007
FY2008
FY2009
FY2010
FY2011
FY2012
Source: CEA website
Table 11: Power requirement and availability for year 2012-2013 for Tamil Nadu
Peak
Peak
Energy
Energy
Energy
Peak
Availabilit Deficit/Surp Requiremen Availabilit Deficit/S
Period
Demand
y
lus
t
y
urplus
(MW)
(MW)
(MW)
(MU)
(MU)
(MW
Apr 12
12499
9841
-2658
7583
5817
-1766
May 12
11967
10182
-1785
6796
5840
-956
June 12
12296
11053
-1243
7868
6834
-1034
July 12
12269
10877
-1392
8043
7333
-710
Aug 12
12004
10566
-1438
7840
6763
-1077
Sep 12
12606
10348
-2258
7990
6606
-1384
Oct 12
12538
10269
-2269
8233
6574
-1659
Nov 12
11755
8306
-3449
7110
5254
-1856
Dec 12
12323
9409
-2914
7450
5831
-1619
Jan 13
12038
9698
-2340
7859
6668
-1191
40|P a g e
Feb 13
11803
10021
-1782
7288
5998
-1290
Mar 13
12736
10556
-2180
8242
6643
-1599
76161
-16141
TOTAL
134565
121126
-13439
92302
Source: CEA, Load Generation Balance Report (2012-2013)
6.3.4 COST BENEFIT ANALYSIS
Table 12: Project details sheet
No. of units
Capacity per unit
Total project capacity
1
660
660
MW
MW
Without IDC
IDC
With IDC
3595
656
4251
Rs Crore
Rs Crore
Rs Crore
1062.80
3188.40
547.34
13.25%
13.25%
13%
Rs Crore
Rs Crore
Rs Crore
p.a.
p.a.
p.a.
12
6
01-Jul-14
01-Jan-26
01-Jan-14
01-Jan-26
Years
Months
Date
Date
Date
Date
70%
As per CERC
based tariff
25
Rs/unit
30%
3.5
25
5%
Rs/unit
years
Equity (25%)
Debt (75%)
Upfront Equity (51.5%)
Interest Rate pre COD
Interest rate post COD
Working Capital
Repayment Period
Moratorium Period
Principle Repayment Start Date
Principle Repayment End Date
Interest Repayment Start Date
Interest Repayment End Date
MOU with PTC (including all units)
% of total capacity
PPA Tariff
No. of years
Selling through Merchant Basis (including all
units)
% of total capacity
PPA Tariff
No. of years
Escalation per year
Corporate Tax
MAT
years
33.99%
20.96%
41|P a g e
GSHR
Auxiliary Consumption
Plant Load Factor
O&M Escalation
O&M Expense
2392
7%
85%
5.72%
0.155
kCal/kwh
%
%
%
crore/MW
Fuel Price
Price Escalation
900
5%
3400
Rs/tonne
p.a.
kCal/kg
Secondary Fuel Price

Secondary Fuel Consumption
Specific Gravity value of Secondary Fuel
Price Escalation
Transportation & Handling Charges
Escalation
50
10280
1
0.95
4%
Rs/kg
kCal/kg
ml/kwh
2
2
1
1
2
Months
Months
Month
Year
Months
Coal Stock
Secondary Fuel
O&M Expenses
Maintenance Spares (20% of O&M Expense)
Receivables from Energy Sales
Rate For Tariff Calculation
Land
Civil Works & Building
Plant & Machinery
Max Depreciable Value
5.28%
0%
3.34%
5.28%
90%
Machinery
Building
15%
10%
Discount Rate
Return on Equity
Return on Equity pre tax (first 12 years)
Return on Equity pre tax (last 13 years)
Project Life
Total units generated
p.a.
13.10%
15.50%
19.38%
22.95%
25
4914.36
%
%
%
%
years
MU
42|P a g e
6.3.5 FINANCIAL MODELLING AND PROJECTIONS

After doing through study of the information Memorandum and all the contracts and the
agreements signed by ABC Ltd. the Financial Analysis is performed. Various parameters
that need to be calculated as a part of the financials of the project are:
INTEREST DURING CONSTRUCTION
In the Interest during construction phase is the period were the power plant is in the
process of making and during this time it generates no revenues. The complete infusion
of term loan and the equity by the financers and promoters respectively is done in this
phase. This period starts from the date when the sub debt and then the upfront equity
starts flowing into the project (upto 51.5 % of the total equity) by the promoters, when
the Upfront Equity part finishes Upfront Debt starts flowing till the time Debt Equity
ratio becomes 75:25. Once, the ratio is achieved the Matching Debt and Matching Equity
flows simultaneously in the ratio of 75:25. During the construction period the project has
to pay the interest on the debt fused till that month. The interest rates depends on the Pre
COD Rates and sub debt rates are specified by the leading Financial Institution (FI),
which is also the syndicator of the project.
(IDC Sheet Attached in Annexure III)
DEBT PAYMENT
When the project is commissioned then the borrower company has to pay the interest on
the Term Loan. The interest rate used is the weighted average of Post COD Rates and
sub debt rates are specified by the leading Financial Institution (FI), which is also the
syndicator of the project.
The First Six months after the project commissioning is the Moratorium Period that is
during this period no principle repayment will be done but the interest will be charged
according to the Post COD Rates. After the Moratorium period the project has to pay
both the principle repayment and interest on the term loan.
(Sheet is attached in the Annexure V)
FUEL REQUIREMENT
The main objective of this part is to calculate the requirement of fuel for the project and
thus calculate overall cost of fuel required per annum for each of the next 25 years of
operation of the plant from the date of start of operations, which is assumed as the life of
the Thermal Power plant.
Here we first calculate the primary fuel cost and secondary fuel cost on yearly basis for
25 years depending upon the energy exported and GCV of the fuel that will be charged
to the project. While calculating the fuel cost we consider the Fuel Charges Escalation
(as mentioned in Power Purchase Agreement).For this we calculate the amount of units
that the project will be producing every year for 25 years. This is done on the basis of
installed capacity (MW) from the point the very first unit becomes operational to the
point 25 years ahead of the last commissioning of last unit. Plant Load factor (PLF) is
also taken into consideration. This collectively gives the amount of fuel required to
generate the stipulated amount of power. After knowing the amount of fuel required and
the cost for 25 years we calculate the fuel cost on yearly basis.
(Fuel requirement sheet is attached in Annexure VI)
43|P a g e
TARIFF
This is among the most important parameters of the project. In this the main objective is
to calculate the Variable Cost and Fixed Cost of generation of one unit of electricity.
This cost is the cost to the company. This cost is compared with the Quoted Tariff, as
specified in the PPA so as to figure it that whether the company is selling the electricity
on profit and loss.
VARIABLE TARIFF:
Variable tariff only takes into account the primary fuel cost. This is obtained by using
formula:
Variable Cost
Electricity Units sold
FIXED TARIFF:
As per CERC norms, the fixed cost takes the following parameters into consideration:
Secondary Fuel Cost
Interest on Loan Capital
Return on Equity
Depreciation
O&M Expenses
Interest on Working Capital
Fixed tariff is calculated as:
Fixed Cost
Electricity Units sold
The sum of variable cost and the fixed cost gives the total Tariff that should be charged
to get the desire return on Equity.
(Tariff sheets attached in Annexure VIII)
DEPRECIATION
Depreciation is calculated on the Machinery and Building strictly according to the CERC
Guidelines. Depreciation shall be calculated on straight line method and at rates
specified in the CERC guidelines for the assets of the generating station but the company
files the tax according to IT ACT section 80.
(Tariff sheets attached in Annexure IV)
WORKING CAPITAL REQUIREMENT
The working capital requirements as specified in the CERC guidelines are as follows:
Working Capital Limits
Primary Fuel Stock
Months
Secondary Fuel Stock
Months
44|P a g e
O&M Expense
Maintenance Spares
Receivables from energy sales
Month
20%
O&M
Months
(Detailed Working Capital requirement sheets is attached in Annexure VII)

CASH FLOW
The Objective of this part is to calculate the total cash flow Inflow and Outflows, and
then to calculate the excess/shortfall.
(Detailed Cash flow sheets is attached in Annexure X)
PROFIT AND LOSS ACCOUNT
The main aim of this part is to calculate the Profit & Loss of the project for the 25 years
after the commissioning of first unit. In case of PTC (long term) the levelised cost of
electricity is Rs 2.475/kWh and that for short term is Rs 3.5/kWh. The sale of electricity
to PTC is done at the rate of Rs 2.475/kWh for aggregate cap of 70% and rest at variable
cost of Rs 0.63/kWh.
(Detailed P&L is attached in Annexure IX)
BALANCE SHEET
This part accounts for the assets and liabilities per year for the project for 25 years from
COD.
(Detailed Balance sheet is attached in Annexure XI)
RATIOS
This part is used to calculate the relevant ratios in order to determine the financial
viability of the project. The Minimum, average and maximum Debt Service Coverage
Ratio is calculated along with Internal Rate of Return and Net present Value are
calculated.
(Detailed Ratios sheet is attached in Annexure XII)
6.3.6 SNAPSHOT OF FINANCIAL PROJECTIONS
The financial projections, based on the capital/project cost as specified by the borrower,
would be as below:
Table 13: Snapshot of project financial projections

Particular Value
Value
Parameters
DSCR
Minimum
1.403
Average
2.106
45|P a g e
Maximum
4.212
Project IRR, 25 years
18.54%
Equity IRR, 25 years
21.41%
Levelised cost of generation
2.475 Rs/kwh
6.3.7 SENSITIVITY ANALYSIS

A sensitivity analysis of the Companys financial position has been carried to ascertain
the robustness of its financials. Various scenarios for which the sensitivities was carried
out and the results are as follows:
Scenario
Table 14: Sensitivity analysis sheet

Project IRR
Min DSCR
Avg DSCR
(%)
Equity IRR
(%)
Base Case
1.403
2.106
18.54
21.41
Case 1: PLF at 65%
1.238
1.784
16.44
18.12
Case 2: Increase Fuel

cost by 20%
1.371
2.043
18.20
20.81
Case 3: Increase project

cost by 10%
1.332
1.974
17.70
20.35
Case 4: Decrease in
calorific value of coal by
1000 kcal/kg
1.336
1.975
17.83
20.13
Case 5: Increase interest

rate by 100 bps
1.373
2.068
18.73
21.25
It may be observed from above mentioned results that project financials are quite robust
in various scenarios and the DSCR levels are above satisfactory.
46|P a g e
CHAPTER 7: RISK ANALYSIS AND SWOT

ANALYSIS
7.1 RISK ANALYSIS
i)
PRE CONSTRUCTION
Sno
ii)
Risk
Mitigation / Allocation
Grant of approvals /
Clearances
Obtain all statutory and non statutory clearances

including the MOEF clearance, Pollution Control Board
NOC and agree to comply with all the conditionality of
these clearances.
Finalization of
Contracts
The Company has already awarded the EPC Contract

Project. The service contract has also been awarded by
the Company. The EPC contract has provided for
liquidated damages in case of delay in implementation
and for plants various performance parameters below
stipulated level.
Procurement of land
Land has been already acquired which is sufficient for

the main power block, Ash Dyke and Raw Water
Reservoir.
CONSTRUCTION
Sno
Risk
Mitigation/Allocation
Cost estimate
Since the technology is based on super critical parameters,

it is difficult to fairly compare costs and to estimate the cost
precisely.
Cost increase and

price Escalation
Package contracts are expected to have suitable 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.
Completion delay
and Equipment
Supply delay
The package contract is expected to have suitable provision

for timely project completion. Also, LDs have been
stipulated for delay in equipment supply.
47|P a g e
iii)
Equity infusion
The equity in company will be infused by promoters

Group as also by raising funds from financial/strategic
investors.
POST CONSTRUCTION
Sno
1
Risk
Fuel supply risk
Mitigation/Allocation
The Company has made a long term fuel agreement with
CIL. Hence, fuel supply risk is perceived to be moderate.
The fuel supply agreement is yet to be signed.
Fuel price risk
Performance
shortfall
The EPC Contract is expected to provide suitable defect

liabilities / warranties. LD clauses would also be stipulated
for ensuring performance. As a preventive measure, the
design shall be subject to review by both the Owners
Engineer and LIE.
Technology risk
EPC contract have been awarded to a contractor having

super critical technology and sufficient experience.
Company is also implementing other project on the same
technology, which again reduces the risk.
Force Majeure
The risk will have to be borne by the project Company, and

may prove to be damaging for the project and by extension
the lenders. This may be mitigated to some extent by
ensuring adequate security for the lenders.
Off take risk
The Company would sell 70% of net power to State

Discom through a long term PPA at a levelized tariff and
rest at Rs 3.5 per unit on merchant basis with escalation of
3% p.a.
Price risk
The cost of generation, is lower than the assumed average

purchase price of power. The risk may be perceived to be
low.
Payment risk
Payment risk is perceived to be low as the major portion of

power is being sold to State Discom under a long term take
or pay PPA.
The fuel supply agreement shall be subject to review by

Lenders / Lenders agencies.
48|P a g e
Also, LDs have been specified in the PPA for payment

security.
9
Environmental
Hazards
Obtained MOEF Clearance and Pollution Control Board

NOC.
10
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.
7.2 SWOT ANALYSIS

STRENGTH
The Project has long term fuel supply agreement with Coal India Limited of Coal
for use in the Project.
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 600 Ha land which is adequate for the main
power plant block. The work on site may start immediately without any delay.
Promoting Group has demonstrated its infrastructure project development and

execution skills in the port sector and is on the verge of completion of the power
project.
The Project is based on Super Critical Technology which is expected to provide

efficiency gains to the Company resulting in lower cost of generation. Use of
Super Critical Technology will reduce the pollution and the Project may be
qualified to get CER under CDM. This would act as additional revenue stream
for the Project and improve the financials of the Company.
WEAKNESS
Company shall be selling 30% of power on Merchant Basis and may get lower
return than the levelised cost of generation.
Environment and Forest Clearances still to be obtained.
49|P a g e
OPPORTUNITY
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.
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
A part of power generated will be sold on Merchant basis and may get lower
return than the levelised cost of generation.
Fuel supply agreement with Coal India Limited may result in delay
7.3 LIMITATIONS
This analysis is limited to an examination of annualized expenses and revenue and
represents a prototypical year of operations. This analysis should examine alternative pay
as- you-go and debt financed scenarios, be conducted in year-of-expenditure, 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:
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.
Cash flows not really known until the project is in service no history of cash
flows.
50|P a g e
Value of debt and equity driven by cash flow.
Measure the value of different securities supported by project cash flow.
Risk analysis depends on contracts used to allocate risk to different parties.
51|P a g e
CHAPTER 8: CONCLUSION,
RECOMMENDATIONS AND LEARNING
8.1 CONCLUSION
Company has proposed to set-up 660 MW 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 Competitive Bidding
Process.
The Project requires about 3771700 TPA coal based on average GCV of 3400 kcal/kg
and PLF of 85%. The company made an FSA with CIL for the Proposed Project.
Appropriate arrangements are proposed to be done. The Project will require about 150
cubic meter per hour make-up water during operation. A raw water reservoir of 25200m3
capacity to hold 7 days requirement for plant requirement of water will be constructed at
the plant site.
Of the total 462 MW of power is proposed to be sold as PPA as per CERC tariff.
Balance 198 MW will be sold on Merchant basis at Rs 3.5 per unit with an escalation of
3% p.a. Considering the cost of generation of Rs. 2.475 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. Thus, loan amount should be granted by PFC equal to
the request of the borrower.
52|P a g e
8.2 RECOMMENDATIONS
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.
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.
8.3 LEARNING
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:
A practical exposure of financial world.
Learnt about investment scenario in power generation.
Know about various complicacies in power generation and their mitigation.
Know about project implication and investment.
Learnt financing aspect of various investment related parameters.
Learnt the formulation and analysis of various financials sheets through model.
Learnt corporate culture.
53|P a g e
BIBILIOGRAPHY
1. Chandra Prasanna, Project Management, 4th Edition, 2005
2. I.M.Pandey, Financial Management, 9th Edition, 2010
3. PFC website: www.pfcindia.com
4. www.cerc.gov.in
5. www.powermin.nic.in
6. Operational policy statement of PFC
7. Project Appraisal Manual
8. Load Generation Balance Report for 2013-14, CEA
9. Integrated Project Rating Model Manual
10. Detailed Project Report of the Company
11. www.powergrid.com
12. Power Finance Corporation, Project Term Loan and Short Term Loans
54|P a g e
ANNEXURE
55|P a g e
ANNEXURE I: ASSUMPTION SHEET

Project Capacity
No. of units
Capacity per unit
Total project capacity
1
660
660
MW
MW
Project Cost
Without IDC
IDC
With IDC
3595
656
4251
Rs Crore
Rs Crore
Rs Crore
Financing Plan
Equity (25%)
Debt (75%)
Upfront Equity (51.5%)
Interest rate post COD
Working Capital
1062.80
3188.40
547.34
13.25%
13.25%
13%
Rs Crore
Rs Crore
Rs Crore
p.a.
p.a.
p.a.
Repayment Details
Repayment Period
Moratorium Period
Principle Repayment Start Date
Principle Repayment End Date
Interest Repayment Start Date
Interest Repayment End Date
12
6
01-Jul-14
01-Jan-26
01-Jan-14
01-Jan-26
Years
Months
Date
Date
Date
Date
PPA Details
PPA with PTC (including all units)

% of total capacity
70%
As per CERC
based tariff
25
Rs/unit
30%
3.5
25
5%
Rs/unit
years
PPA Tariff
No. of years
Selling through Merchant Basis (including all
units)
% of total capacity
PPA Tariff
No. of years
Escalation per year
years
Tax Rates
Corporate Tax
MAT
33.99%
20.96%
Technical Parameters
GSHR
Plant Load Factor
O&M Escalation
O&M Expense
2392
7%
85%
5.72%
0.155
kCal/kwh
%
%
%
crore/MW
Fuel : Primary Fuel
Fuel Price
Price Escalation
900
5%
3400
Rs/tonne
p.a.
kCal/kg
Secondary
Fuel Price
Secondary Fuel Consumption
Specific Gravity value of Secondary Fuel
Price Escalation
Transportation & Handling Charges
Escalation
Working Capital Limits
Coal Stock
Secondary Fuel
O&M Expenses
Maintenance Spares (20% of O&M Expense)
Receivables from Energy Sales
Depreciation
Rate For Tariff Calculation

Land
Civil Works & Building
Plant & Machinery
Max Depreciable Value
Depreciation Rate for IT
Machinery
Building
Miscellaneous
Discount Rate
Return on Equity
Return on Equity pre tax (first 12 years)
Return on Equity pre tax (last 13 years)
Project Life
Total units generated
50
10280
1
0.95
4%
Rs/kg
kCal/kg
ml/kwh
2
2
1
1
2
Months
Months
Month
Year
Months
p.a.
5.28%
0%
3.34%
5.28%
90%
15%
10%
13.10%
15.50%
19.61%
23.48%
25
4914.36
%
%
%
%
years
MU
ANNEXURE II: PROJECT COST

Sl No.
1
2
3
4
5
6
7
8
Particulars
Total Plant & Equipment
Civil Works
Electric Works
Miscellaneous
Total Hard Cost
Base Amount
50
2038.48
545
Escalation
0%
0%
0%
Overhead & Pre-Op. Expenses

Working Capital Margin
Total Soft Cost
114.59
656.20
565.43
1336.22
Total Project Cost
4251
MEANS OF FINANCE
Particulars
Debt Equirt Ratio
Equity
Debt
Upfront Equity
Total
Total Cost
50
2038.48
545
135
146.5
2914.98
Percentage
3.00
25%
75%
51.5%
100%
Cost (Rs Crore)

1062.80
3188.40
547.34
4251
PROJECT COST BREAKUP

i)
ii)
iii)

Particulars
Land
Site Development
TOTAL
Civil Construction
Particulars
Civil & Construction Works
TOTAL
Plant & Equipment

Particulars
Steam generators (boilers) &
Steam turbine generators with all
auxiliaries
Coal handling system
Ash handling plant
CW System
Amount (In Crore)

30
20
50
Amount (In Crore)

545
545
Amount (In Crore)

1431.5
50
50
10.5
DM plant including all accessories
5.05
Air conditioning plants

Fire protection system
Miscellaneous pumps
CW treatment plant
IDCT Electro-Mechanical
Effluent treatment system
2.15
4.25
2.5
3.3
6
2.38
Chemical laboratory equipment
1.5
Cranes and hoists
2.23
Air compressors and accessories
2.05
Instrumentation and Control

system
Computers and software
Emergency D.G. Sets
Fuel unloading, storage and
forwarding system
Workshop Equipment
Cost of Mechanical Spares
Freight and Insurance
Excise and Central Sales tax
Erection testing and
commissioning
Transmission Line
Service tax
TOTAL
5
1.05
3.05
6.2
2.75
4
15.95
199.53
159.15
52
16.39
2038.48
iv)
v)
Overheads & Preoperative Expenses

Particulars
Start-up fuel
Design, engineering, construction
supervision, inspection and
expediting and project
management
Pre-operative Expenses
Insurance during construction
TOTAL
Amount (In Crore)

14.57
56.3
29.15
14.57
114.59
Electric Works Expenses
Particulars
Power transformers
GCB
Other electric equipments
Cost of Electrical Spares
Miscellaneous
TOTAL
vi)
Amount (In Crore)

21
8
76.98
2.65
26.37
135
Miscellaneous
Particulars
Coal conveyor from Port
Railway siding
Water intake
Amount (In Crore)

12
55
29.5
Desalination plant and auxiliaries
50
TOTAL
Date of Commencement
No. of quarters of construction
Period of Construction
End of Construction
Commercial operation period
146.5
01-Apr-10
15
45 months
31-Dec-13
01-Jan-14
ANNEXURE III: INTEREST DURING CONSTRUCTION

Particulars
Project Cost without IDC
IDC
Project Cost with IDC
Interest Rate post COD
Amount
3595
656
4251
13.25%
13.25%
Equity
Debt
Upfront
25%
75%
51.50%
Jun-10
2010
3
Jul-10
2010
4
Total
1062.801
3188.402
Upfront
547.34
1642.03
Balance
515.46
1546.38
Aug-10
2010
5
Sep-10
2010
6
Oct-10
2010
7
PROJECT PHASING
Month
Financial Year
Apr-10
2010
1
Total
100%
4251
Percentage
Amount
May-10
2010
2
Nov-10
2010
8
Dec-10
2010
9
Jan-11
2011
10
Feb-11
2011
11
Mar-11
2011
12
Apr-11
2011
13
May-11
2011
14
Jun-11
2011
15
Jul-11
2011
16
1.50%
1.50%
1.50%
2.00%
2.00%
2.00%
2.00%
2.00%
1.00%
1.00%
2.00%
2.00%
2.00%
2.00%
2.00%
2.00%
63.76804 63.76804 63.76804 85.02406 85.02406 85.02406 85.02406 85.02406 42.51203 42.51203 85.02406 85.02406 85.02406 85.02406 85.02406 85.02406
Upfront Equity
Upfront Debt
547.34 63.76804 63.76804 63.76804 85.02406 85.02406 85.02406 85.02406

15.94
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
1642.03
0.000
0.000
0.000
0.000
0.000
0.000
0.000
69.08205 42.51203 42.51203 85.02406 85.02406 85.02406 85.02406 85.02406 85.02406
Matching Equity
Matching Debt
515.46
1546.38
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
Total Equity
Total Debt
1062.80
3188.40
63.768
0.000
63.768
0.000
63.768
0.000
85.024
0.000
85.024
0.000
85.024
0.000
85.024
0.000
Total Senior Debt

Total Sub Debt
3188.402
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
69.082
0.000
42.512
0.000
42.512
0.000
85.024
0.000
85.024
0.000
85.024
0.000
85.024
0.000
85.024
0.000
85.024
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
69.082
69.082
69.082
42.512
111.594
111.594
42.512
154.106
154.106
85.024
239.130
239.130
85.024
324.154
324.154
85.024
409.178
409.178
85.024
494.202
494.202
85.024
579.226
579.226
85.024
664.250
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.381
0.997
1.467
2.171
3.110
4.049
4.987
5.926
6.865
Opening Balance
Monthly Disbursement
Closing Balance
656.203
YEARLY PHASING
Year Ending on 31 March
Total Expenditure
IDC
Expenditure less IDC
Total Equity
Debt
2010
2011
2012
4251.2 658.9364 977.7766 1254.105
656.203
1.379
76.982
219.945
3595.000 657.558 900.794 1034.160
1062.801 547.342
0.000
175.362
3188.402 111.594 977.777 1078.743
2013
1360.385
357.897
1002.488
340.096
1020.289
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
15.942
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
69.08205 42.51203 42.51203 85.02406 85.02406 85.02406 85.02406 85.02406 85.02406
Aug-11
2011
17
Sep-11
2011
18
Oct-11
2011
19
Nov-11
2011
20
Dec-11
2011
21
Jan-12
2012
22
Feb-12
2012
23
Mar-12
2012
24
Apr-12
2012
25
May-12
2012
26
Jun-12
2012
27
Jul-12
2012
28
Aug-12
2012
29
Sep-12
2012
30
Oct-12
2012
31
Nov-12
2012
32
Dec-12
2012
33
Jan-13
2013
34
Feb-13
2013
35
Mar-13
2013
36
2.00%
2.00%
2.00%
2.00%
2.00%
2.50%
2.00%
2.50%
2.50%
2.50%
2.50%
2.50%
2.50%
2.50%
2.50%
2.50%
2.50%
3.00%
2.50%
2.50%
85.02406 85.02406 85.02406 85.02406 85.02406 106.2801 85.02406 106.2801 106.2801 106.2801 106.2801 106.2801 106.2801 106.2801 106.2801 106.2801 106.2801 127.5361 106.2801 106.2801
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
85.02406 85.02406 85.02406 85.02406 85.02406 106.2801 85.02406 106.2801 106.2801 106.2801 42.5120
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
85.02406 85.02406 85.02406 85.02406 85.02406 106.2801 85.02406 106.2801 106.2801 106.2801
85.024
0.000
85.024
0.000
85.024
0.000
664.250
85.024
749.274
749.274
85.024
834.299
834.299
85.024
919.323
7.804
8.743
9.681
85.024
0.000
85.024
0.000
106.280
0.000
85.024
0.000
106.280
0.000
106.280
0.000
106.280
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
15.942
47.826
26.570
79.710
26.570
79.710
26.570
79.710
26.570
79.710
26.570
79.710
26.570
79.710
31.884
95.652
26.570
79.710
26.570
79.710
15.942
90.338
26.570
79.710
26.570
79.710
26.570
79.710
26.570
79.710
26.570
79.710
26.570
79.710
31.884
95.652
26.570
79.710
26.570
79.710
90.338
0.000
79.710
0.000
79.710
0.000
79.710
0.000
79.710
0.000
79.710
0.000
79.710
0.000
95.652
0.000
79.710
0.000
79.710
0.000
919.323 1004.347 1089.371 1195.651 1280.675 1386.955 1493.235 1599.515 1689.853 1769.563 1849.273 1928.983 2008.693 2088.403 2168.113 2263.766 2343.476
85.024
85.024
106.280
85.024
106.280 106.280 106.280 90.338
79.710
79.710
79.710
79.710
79.710
79.710
95.652
79.710
79.710
1004.347 1089.371 1195.651 1280.675 1386.955 1493.235 1599.515 1689.853 1769.563 1849.273 1928.983 2008.693 2088.403 2168.113 2263.766 2343.476 2423.186
10.620
11.559
12.615
13.671
14.728
15.901
17.075
18.160
19.099
19.979
20.859
21.739
22.619
23.500
24.468
25.436
26.316
ANNEXURE IV: DEPRECIATION

Depreciation as per IT act
Civil Works
Opening Balance
Depreciation
Closing Balance
Plant & Machinery
Opening Balance
Depreciation
Closing Balance
Total Dep as per IT
Depreciation rate after

taking the weighted avg.
Depreciation
Cumulative Depreciation
0
545.00
13.625
531.38
1
531.38
53.1375
478.24
2
3
4
5
6
7
478.24
430.41
387.37
348.64
313.77
282.39
47.82375 43.04138 38.73724 34.86351 31.37716 28.23945
430.41
387.37
348.64
313.77
282.39
254.16
8
254.16
25.4155
228.74
9
10
228.74
205.87
22.87395 20.58656
205.87
185.28
11
185.28
18.5279
166.75
2038.48 1962.037 1667.731 1417.572 1204.936 1024.196 870.5662 739.9813 628.9841 534.6365 454.441 386.2749
76.443 294.3056 250.1597 212.6358 180.7404 153.6293 130.5849 110.9972 94.34762 80.19547 68.16615 57.94123
1962.037 1667.731 1417.572 1204.936 1024.196 870.5662 739.9813 628.9841 534.6365 454.441 386.2749 328.3336
90.068
347.4431 297.9835 255.6771 219.4776 188.4929 161.9621 139.2366 119.7631 103.0694 88.75271 76.46913
4.89%
0
1
2
3
4
5
6
7
8
9
10
11
31.53483 126.1393 126.1393 126.1393 126.1393 126.1393 126.1393 126.1393 126.1393 126.1393 126.1393 126.1393
31.53483 157.6742 283.8135 409.9529 536.0922 662.2315 788.3709 914.5102 1040.65 1166.789 1292.928 1419.068
12
166.75
16.67511
150.08
13
150.08
15.0076
135.07
14
15
16
17
18
19
20
21
22
23
24
25
135.07
121.56
109.41
98.46
88.62
79.76
71.78
64.60
58.14
52.33
47.10
42.39
13.50684 12.15616 10.94054 9.846486 8.861837 7.975654 7.178088 6.460279 5.814252 5.232826 4.709544 3.178942
121.56
109.41
98.46
88.62
79.76
71.78
64.60
58.14
52.33
47.10
42.39
39.21
328.3336 279.0836 237.2211 201.6379 171.3922 145.6834 123.8309 105.2562 89.4678 76.04763 64.64049 54.94442 46.70275 39.69734
49.25005 41.86254 35.58316 30.24568 25.70883 21.85251 18.57463 15.78844 13.42017 11.40715 9.696073 8.241662 7.005413 4.465951
279.0836 237.2211 201.6379 171.3922 145.6834 123.8309 105.2562 89.4678 76.04763 64.64049 54.94442 46.70275 39.69734 35.23139
65.92516 56.87014
49.09
42.40184 36.64937 31.69899 27.43647 23.76409 20.59826 17.86742 15.51032 13.47449 11.71496 7.644893
12
13
14
15
16
17
18
19
20
21
22
23
24
25
89.18573 89.18573 89.18573 89.18573 89.18573 89.18573 89.18573 89.18573 89.18573 89.18573 89.18573 89.18573 89.18573 66.88929
1508.253 1597.439 1686.625 1775.81 1864.996 1954.182 2043.368 2132.553 2221.739 2310.925 2400.111 2489.296 2578.482 2645.371
ANNEXURE V: DEBT SERVICING

Year
Quarters
Loan Opening Balance
Quarterly Interest
Principle Amount
Loan Repayments
Outstanding Balance
Year
Quarters
Quarterly Interest
Principle Amount
Loan Repayments
Outstanding Balance
Year
Quarters
Quarterly Interest
Principle Amount
Loan Repayments
Outstanding Balance
2015
2016
2017
2014
1
2
3
0
Jan-Mar Apr-Jun Jul-Sept Oct-Dec Jan-Mar Apr-Jun Jul-Sept Oct-Dec Jan-Mar Apr-Jun Jul-Sept Oct-Dec
3188.40 3188.40 3188.40 3119.09 3049.78 2980.46 2911.15 2841.84 2772.52 2703.21 2633.90 2564.58
105.62 105.62 105.62 103.32 101.02
98.73
96.43
94.14
91.84
89.54
87.25
84.95
0.00
0.00
69.31
69.31
69.31
69.31
69.31
69.31
69.31
69.31
69.31
69.31
105.62 105.62 174.93 172.63 170.34 168.04 165.74 163.45 161.15 158.86 156.56 154.26
3188.40 3188.40 3119.09 3049.78 2980.46 2911.15 2841.84 2772.52 2703.21 2633.90 2564.58 2495.27
2018
2019
2020
2017
4
5
6
3
2495.27 2425.96 2356.65 2287.33 2218.02 2148.71 2079.39 2010.08 1940.77 1871.45 1802.14 1732.83
82.66
80.36
78.06
75.77
73.47
71.18
68.88
66.58
64.29
61.99
59.70
57.40
69.31
69.31
69.31
69.31
69.31
69.31
69.31
69.31
69.31
69.31
69.31
69.31
151.97 149.67 147.38 145.08 142.78 140.49 138.19 135.90 133.60 131.30 129.01 126.71
2425.96 2356.65 2287.33 2218.02 2148.71 2079.39 2010.08 1940.77 1871.45 1802.14 1732.83 1663.51
2021
2022
2023
2020
7
8
9
6
1663.51 1594.20 1524.89 1455.57 1386.26 1316.95 1247.64 1178.32 1109.01 1039.70 970.38 901.07
55.10
52.81
50.51
48.22
45.92
43.62
41.33
39.03
36.74
34.44
32.14
29.85
69.31
69.31
69.31
69.31
69.31
69.31
69.31
69.31
69.31
69.31
69.31
69.31
124.42 122.12 119.83 117.53 115.23 112.94 110.64 108.35 106.05 103.75 101.46
99.16
1594.20 1524.89 1455.57 1386.26 1316.95 1247.64 1178.32 1109.01 1039.70 970.38 901.07 831.76
Year
Quarters
Quarterly Interest
Principle Amount
Loan Repayments
Outstanding Balance
2024
2025
2026
2023
10
11
12
9
831.76 762.44 693.13 623.82 554.50 485.19 415.88 346.57 277.25 207.94 138.63
69.31
27.55
25.26
22.96
20.66
18.37
16.07
13.78
11.48
9.18
6.89
4.59
2.30
69.31
69.31
69.31
69.31
69.31
69.31
69.31
69.31
69.31
69.31
69.31
69.31
96.87
94.57
92.27
89.98
87.68
85.39
83.09
80.79
78.50
76.20
73.91
71.61
762.44 693.13 623.82 554.50 485.19 415.88 346.57 277.25 207.94 138.63
69.31
0.0
ANNEXURE VI: ENERGY CHARGE

PRIMARY FUEL (COAL)
Gross station heat rate (kCal/kwh)
Gross Calorific value of Secondary Fuel oil (kCal/L)
Heat contribution from secondary fuel oil (kCal/kwh)
Heat contribution from primary fuel oil (kCal/kwh)
Gross calorific value for coal (kCal/kg)
Coal required to produce 1 unit of electricity (kg/kwh)
Cost of Coal (Rs/kg)
Coal price to produce 1 unit of electricity (Rs/kwh)
2392
10280
10.28
2381.72
3400
0.7005
0.9
0.63
SECONDARY FUEL
Secondary Fuel Oil Consumption (L/kwh)
Specific gravity of Secondary Fuel Oil
Secondary Fuel Oil Consumption (kg/kwh)
Secondary Fuel Oil cost (Rs/kg)
Secondary Fuel Oil cost per unit of electricity (Rs/kwh)
Total Fuel Oil consumption per annum (Rs Crs)
0.001
0.95
0.00095
50
0.0475
23.34
ENERGY CHARGE
Variable charges for single unit (Rs/kwh)
Rate of Energy delivered to Ex Bus
Year
Total Coal cost per annum
(in crs)
Total secondary fuel oil cost
per annum (in crs)
0.63
7%
0.59
10
11
12
77.457
325.320
341.586
358.665
376.598
395.428
415.200
435.960
457.758
480.646
504.678
529.912
556.407
5.84
24.277
25.248
26.258
27.308
28.401
29.537
30.718
31.947
33.225
34.554
35.936
37.373
13
14
584.2277 613.4391
38.86816 40.42289
15
644.111
42.0398
16
17
18
676.3166 710.1324 745.639054
43.72139 45.47025 47.2890603
19
782.9210065
49.18062275
20
21
22
23
24
25
822.0671 863.1704 906.3289 951.6454 999.2276 786.8918
51.14785 53.19376 55.32151 57.53437 59.83575 46.67188
ANNEXURE VII: WORKING CAPITAL

Year
2014
0
2015
1
2016
2
2017
3
2018
4
2019
5
2020
6
2021
7
2022
8
2023
9
2024
10
ITEMS
Primary Fuel
Months
12.910
54.220
56.931
59.778
62.766
65.905
69.200
72.660
76.293
80.108
84.113
Secondary Fuel
Months
0.973
4.046
4.208
4.376
4.551
4.733
4.923
5.120
5.324
5.537
5.759
O&M Expense
Month
8.498
8.984
9.498
10.042
10.616
11.223
11.865
12.544
13.261
14.020
14.822
20%
O&M
20.396
21.563
22.796
24.100
25.479
26.936
28.477
30.105
31.828
33.648
35.573
Months
56.723
231.998
235.202
238.503
242.191
246.287
250.810
255.784
261.229
267.172
273.636
99.500
99.500
74.625
9.701
320.812
221.312
240.609
31.279
328.635
7.823
246.476
32.042
336.798
8.163
252.599
32.838
345.603
8.805
259.203
33.696
355.084
9.481
266.313
34.621
365.275
10.191
273.956
35.614
376.213
10.938
282.160
36.681
387.936
11.723
290.952
37.824
400.485
12.549
300.364
39.047
413.902
13.418
310.427
40.355
91.001
91.001
311.827
220.826
319.137
7.309
326.756
7.620
334.987
8.231
343.861
8.873
353.410
9.549
363.669
10.259
374.674
11.006
386.465
11.790
399.080
12.616
Maintenance
Spares
Receivables
WORKING CAPITAL
Total Working Capital
Increase in Working Capital
Working Capital Debt
Interest on Working Capital
CURRENT ASSETS
Total Current Assets
Increase in Current Assets
2025
11
2026
12
2027
13
2028
14
2029
15
2030
16
2031
17
2032
18
2033
19
2034
20
2035
21
2036
22
2037
23
2038
24
2039
25
88.319
92.735
97.371
102.240
107.352
112.719
118.355
124.273
130.487
137.011
143.862
151.055
158.608
166.538
131.149
5.989
6.229
6.478
6.737
7.007
7.287
7.578
7.882
8.197
8.525
8.866
9.220
9.589
9.973
7.779
15.670
16.566
17.514
18.515
19.575
20.694
21.878
23.129
24.452
25.851
27.330
28.893
30.546
32.293
34.140
37.607
39.759
42.033
44.437
46.979
49.666
52.507
55.510
58.686
62.042
65.591
69.343
73.309
77.503
81.936
280.648
288.731
299.635
312.800
326.635
341.172
356.448
372.500
389.368
407.092
425.718
445.291
465.858
487.471
349.734
428.233
14.331
321.175
41.753
444.019
15.786
333.014
43.292
463.030
19.011
347.273
45.145
484.730
21.699
363.547
47.261
507.547
22.817
380.660
49.486
531.539
23.992
398.654
51.825
556.767
25.228
417.575
54.285
583.294
26.528
437.471
56.871
611.189
27.895
458.392
59.591
640.522
29.333
480.391
62.451
671.367
30.845
503.525
65.458
703.802
32.435
527.851
68.621
737.910
34.108
553.432
71.946
773.777
35.868
580.333
75.443
604.737
-169.041
453.553
58.962
412.564
13.483
427.453
14.889
445.517
18.064
466.214
20.698
487.972
21.758
510.844
22.872
534.889
24.044
560.165
25.276
586.737
26.572
614.671
27.934
644.037
29.366
674.909
30.872
707.364
32.455
741.485
34.120
570.597
-170.888
ANNEXURE VIII: TARIFF

Year
Variable Tariff
Energy Available
for Sale
Variable Fuel Cost
Variable Fuel Cost per
Unit
Fixed Tariff
Interest
Return on Equity
Depreciation
Cumulative
Depreciation
O&M Expense
Interest on Working
Capital
Fixed Cost
Fixed Cost per unit
Total Cost per unit
2014
0
2016
2
2017
3
2018
4
2019
5
2020
6
2021
7
2022
8
2023
9
2024
10
2025
11
2026
12
2027
13
2028
14
2029
15
2030
16
2031
17
2032
18
2033
19
2034
20
2035
21
2036
22
2037
23
2038
24
2039
25
Million
1228.59 4914.36 4914.36 4914.36 4914.36 4914.36 4914.36 4914.36 4914.36 4914.36 4914.36 4914.36 4914.36 4914.36 4914.36 4914.36 4914.36 4914.36 4914.36 4914.36 4914.36 4914.36 4914.36 4914.36 4914.36 3685.77
Units
Rs Crore 77.46 325.32 341.59 358.67 376.60 395.43 415.20 435.96 457.76 480.65 504.68 529.91 556.41 584.23 613.44 644.11 676.32 710.13 745.64 782.92 822.07 863.17 906.33 951.65 999.23 786.89
Rs/kwh
0.63
0.66
0.70
0.73
0.77
0.80
0.84
0.89
0.93
0.98
1.03
1.08
1.13
1.19
1.25
1.31
1.38
1.45
1.52
1.59
1.67
1.76
1.84
1.94
2.03
2.13
Rs Crore
Rs Crore
Rs Crore
105.62
52.10
31.53
415.58
208.42
126.14
381.14
208.42
126.14
344.40
208.42
126.14
307.66
208.42
126.14
270.93
208.42
126.14
234.19
208.42
126.14
197.46
208.42
126.14
160.72
208.42
126.14
123.98
208.42
126.14
87.25
208.42
126.14
50.51
208.42
126.14
13.78
249.56
89.19
0.00
249.56
89.19
0.00
249.56
89.19
0.00
249.56
89.19
0.00
249.56
89.19
0.00
249.56
89.19
0.00
249.56
89.19
0.00
249.56
89.19
0.00
249.56
89.19
0.00
249.56
89.19
0.00
249.56
89.19
0.00
249.56
89.19
0.00
249.56
89.19
0.00
187.17
66.89
Rs Crore
31.53
157.67
283.81
409.95
536.09
662.23
788.37
914.51 1040.65 1166.79 1292.93 1419.07 1508.25 1597.44 1686.62 1775.81 1865.00 1954.18 2043.37 2132.55 2221.74 2310.92 2400.11 2489.30 2578.48 2645.37
Rs Crore
25.50
107.81
113.98
120.50
127.39
134.68
142.38
150.53
159.14
168.24
177.86
188.04
198.79
210.16
222.19
234.89
248.33
262.53
277.55
293.43
310.21
327.96
346.72
366.55
387.51
Rs Crore
9.70
31.28
32.04
32.84
33.70
34.62
35.61
36.68
37.82
39.05
40.36
41.75
43.29
45.15
47.26
49.49
51.83
54.28
56.87
59.59
62.45
65.46
68.62
71.95
75.44
58.96
Rs Crore
Rs/kwh
Rs/kwh
224.45
1.83
2.46
889.23
1.81
2.47
861.72
1.75
2.45
832.30
1.69
2.42
803.31
1.63
2.40
774.79
1.58
2.38
746.75
1.52
2.36
719.22
1.46
2.35
692.24
1.41
2.34
665.83
1.35
2.33
640.02
1.30
2.33
614.86
1.25
2.33
594.61
1.21
2.34
594.05
1.21
2.40
608.19
1.24
2.49
623.13
1.27
2.58
638.90
1.30
2.68
655.56
1.33
2.78
673.17
1.37
2.89
691.76
1.41
3.00
711.41
1.45
3.12
732.16
1.49
3.25
754.08
1.53
3.38
777.24
1.58
3.52
801.70
1.63
3.66
338.63
0.92
3.05
1.00
0.8842
0.7818
0.69121
0.6112
0.5404
0.4778
0.4224
0.3735
0.3302
0.292
0.2582
0.2283
0.2018
0.1785
0.1578
0.1395
0.1233
0.1091
0.0964
0.0853
0.0754
0.0667
0.0589
0.0521 0.046072
0.6305
1.8269
2.4574
0.5853
1.5999
2.1852
0.5434
1.3708
1.914
0.50447
1.17064
1.67511
0.4683
0.999
1.4673
0.4348
0.8519
1.2867
0.4037
0.726
1.1296
0.3747
0.6182
0.993
0.3479
0.5261
0.874
0.323
0.4474
0.7704
0.2999
0.3803
0.6801
0.2784
0.323
0.6014
0.2584 0.2399
0.2762 0.244
0.5346 0.4839
2.475
0.2228
0.2208
0.4436
0.2068
0.2001
0.4069
0.192
0.1814
0.3734
0.1782
0.1645
0.3428
0.1655
0.1494
0.3149
0.1536
0.1357
0.2894
0.1426
0.1234
0.266
0.1324
0.1123
0.2447
0.1229
0.1023
0.2252
0.1141
0.0932
0.2073
0.1059 0.098361
0.085 0.042328
0.191 0.140689
PV Calculation
PV Factor
Discounted Tariff
Variable Tariff
Fixed Tariff
Total tariff
Levelised Tariff
2015
1
Rs/kwh
Rs/kwh
Rs/kwh
Rs/kwh
25.60
ANNEXURE IX: PROFIT & LOSS

Year
Revenue from Energy Sale
to PTC
Revenue from energy sale
on Merchant basis
Total Revenue
0
2014
1
2015
2
2016
3
2017
4
2018
5
2019
6
2020
7
2021
8
2022
9
2023
10
2024
211.336
850.182
842.311
833.672
825.936
819.150
813.363
808.627
804.998
802.532
801.292
129.002
541.8082
568.8986
597.3435
627.2107
658.5712
691.4998
726.0748
762.3785
800.4975
840.5223
340.338
1391.990
1411.210
1431.016
1453.147
1477.721
1504.863
1534.702
1567.376
1603.030
1641.814
Expenses
Fuel
O&M Expenses
Depreciation
Interest payments
Total Expenditure
77.457
325.320
25.495
107.813
31.53483 126.1393
115.32
446.85
249.804 1006.127
341.586
113.980
126.1393
413.18
994.883
358.665
120.500
126.1393
377.24
982.542
376.598
127.393
126.1393
341.36
971.490
395.428
134.679
126.1393
305.55
961.795
415.200
142.383
126.1393
269.81
953.528
435.960
150.527
126.1393
234.14
946.763
457.758
159.138
126.1393
198.54
941.578
480.646
168.240
126.1393
163.03
938.056
504.678
177.864
126.1393
127.60
936.284
Profit before tax, PBT
90.534
385.863
416.327
448.474
481.657
515.926
551.334
587.939
625.798
664.974
705.530
PBT+Dep on books
122.069
512.002
542.466
574.613
607.796
642.065
677.474
714.078
751.938
791.113
831.669
PBT for IT purposes
32.001
164.559
244.483
318.936
388.318
453.572
515.512
574.842
632.174
688.044
742.917
18.97593
10.87709
18.97593
80.87692
55.93375
80.87692
87.2621
83.09967
87.2621
94.00017
108.4064
108.4064
100.9552
131.9894
131.9894
108.138
154.1692
154.1692
115.5597
175.2224
175.2224
123.232
195.3887
195.3887
131.1673
214.8761
214.8761
139.3785
233.866
233.866
147.8791
252.5174
252.5174
71.558
304.986
329.065
340.068
349.667
361.757
376.112
392.550
410.922
431.108
453.013
MAT
Corporate Tax
Payable Tax
Profit after tax, PAT
11
2025
12
2026
13
2027
14
2028
15
2029
16
2030
17
2031
18
2032
19
2033
20
2034
21
2035
22
2036
23
2037
24
2038
25
2039
801.340
805.709
824.798
855.142
887.065
920.652
955.988
993.165
1032.279
1073.433
1116.731
1162.287
1210.219
1260.651
787.862
882.5484
926.6759
973.0097
1021.66
1072.743
1126.38
1182.699
1241.834
1303.926
1369.122
1437.578
1509.457
1584.93
1664.177 1310.539
1683.889
1732.385
1797.807
1876.802
1959.809
2047.032
2138.687
2234.999
2336.205
2442.555
2554.309
2671.744
2795.149
2924.828 2098.401
529.912
188.037
126.1393
92.26
936.353
556.407
198.793
89.18573
57.07
901.454
584.228
210.164
89.18573
45.15
928.723
613.439
644.111
676.317
710.132
745.639
782.921
822.067
863.170
906.329
951.645
999.228 786.892
222.186
234.895
248.330
262.535
277.552
293.428
310.212
327.956
346.715
366.547
387.514
25.605
89.18573 89.18573 89.18573 89.18573 89.18573 89.18573 89.18573 89.18573 89.18573 89.18573 89.18573 66.88929
47.26
49.49
51.83
54.28
56.87
59.59
62.45
65.46
68.62
71.95
75.44
58.96
972.071 1017.677 1065.658 1116.138 1169.248 1225.126 1283.916 1345.771 1410.851 1479.325 1551.371 938.348
747.536
830.931
869.084
904.730
942.132
981.374
1022.549
1065.751
1111.080
1158.639
1208.539
1260.894
1315.824
1373.457 1160.053
873.675
920.117
958.270
993.916
1031.317
1070.560
1111.735
1154.937
1200.266
1247.825
1297.725
1350.079
1405.010
1462.643 1226.943
797.206
854.192
901.400
944.826
988.915
1033.911
1080.036
1127.501
1176.501
1227.227
1279.857
1334.569
1391.536
1450.928 1219.298
156.6835
270.9702
270.9702
174.1632
290.3398
290.3398
182.1601
306.3858
306.3858
189.6315
321.1463
321.1463
197.4708
336.1324
336.1324
205.6961
351.4263
351.4263
214.3264
367.1043
367.1043
223.3815
383.2375
383.2375
232.8823
399.8929
399.8929
242.8508
417.1343
417.1343
253.3097
435.0234
435.0234
264.2833
453.62
453.62
275.7968
472.9829
472.9829
287.8766 243.1472
493.1704 414.4393
493.1704 414.4393
476.565
540.591
562.698
583.584
605.999
629.948
655.445
682.514
711.187
741.505
773.515
807.274
842.841
880.287
745.614
ANNEXURE X: CASH FLOW

Year
0
2014
1
2015
2
2016
3
2017
4
2018
5
2019
6
2020
7
2021
8
2022
9
2023
10
2024
11
2025
12
2026
Inflow
Equity
Debt
Term Loan
WC Debt
PBT
Depreciation
Total cash inflow
1062.80
3271.53
3188.40
83.12
90.534
31.535
4456.40
0
0
0
0
0
166.46
6.39
6.66
7.18
7.71
0
0
0
0
0
166.46
6.39
6.66
7.18
7.71
385.863 416.327 448.474 481.657 515.926
126.139 126.139 126.139 126.139 126.139
678.47 548.85 581.28 614.98 649.78
0
8.29
0
8.29
551.334
126.139
685.77
0
8.87
0
8.87
587.939
126.139
722.95
0
9.51
0
9.51
625.798
126.139
761.45
0
10.17
0
10.17
664.974
126.139
801.28
0
10.86
0
10.86
705.530
126.139
842.53
0
11.60
0
11.60
747.536
126.139
885.27
0
12.74
0
12.74
830.931
89.186
932.86
Outflow
Project expenditure
Increase in WC
Tax
Loan repayments
Total cash outflow
4251.20
99.500
18.976
0.000
4369.68
0
0
0
0
0
221.312 7.823
8.163
8.805
9.481
80.877 87.262 108.406 131.989 154.169
207.939 277.252 277.252 277.252 277.252
510.13 372.34 393.82 418.05 440.90
0
10.191
175.222
277.252
462.67
0
10.938
195.389
277.252
483.58
0
11.723
214.876
277.252
503.85
0
12.549
233.866
277.252
523.67
0
13.418
252.517
277.252
543.19
0
14.331
270.970
277.252
562.55
0
15.786
290.340
207.939
514.06
Excess/Shortfall
Opening Balance
Closing Balance
86.718 168.338 176.516 187.454 196.933 208.873 223.101 239.373 257.598 277.617 299.345 322.720 418.791
0.000 86.718 255.056 431.572 619.026 815.959 1024.832 1247.934 1487.306 1744.905 2022.522 2321.867 2644.587
86.718 255.056 431.572 619.026 815.959 1024.832 1247.934 1487.306 1744.905 2022.522 2321.867 2644.587 3063.378
13
2027
14
2028
15
2029
16
2030
17
2031
0
15.20
0
15.20
869.084
89.186
973.47
0
17.28
0
17.28
904.730
89.186
1011.20
0
18.16
0
18.16
942.132
89.186
1049.48
0
0
0
0
0
0
0
0
0
19.11
20.11
21.15
22.24
23.40
24.61
25.89
27.24
28.64
0
0
0
0
0
0
0
0
0
19.11
20.11
21.15
22.24
23.40
24.61
25.89
27.24
28.64
981.374 1022.549 1065.751 1111.080 1158.639 1208.539 1260.894 1315.824 1373.457
89.186
89.186
89.186
89.186
89.186
89.186
89.186
89.186
89.186
1089.67 1131.85 1176.08 1222.51 1271.22 1322.34 1375.97 1432.25 1491.28
0
19.011
306.386
0.000
325.40
0
21.699
321.146
0.000
342.85
0
22.817
336.132
0.000
358.95
0
23.992
351.426
0.000
375.42
0
25.228
367.104
0.000
392.33
18
2032
0
26.528
383.237
0.000
409.77
19
2033
0
27.895
399.893
0.000
427.79
20
2034
0
29.333
417.134
0.000
446.47
21
2035
0
30.845
435.023
0.000
465.87
22
2036
0
32.435
453.620
0.000
486.06
23
2037
0
34.108
472.983
0.000
507.09
24
2038
25
2039
0
-124.93
0
-124.93
1160.053
66.889
1102.01
0
1
35.868 -169.041
493.170 414.439
0.000
0.000
529.04
246.40
648.071 668.355 690.531 714.256 739.514 766.318 794.719 824.757 856.470 889.911 925.160 962.246 855.614
3063.378 3711.450 4379.805 5070.335 5784.591 6524.105 7290.423 8085.142 8909.899 9766.37 10656.28 11581.44 12543.69
3711.450 4379.805 5070.335 5784.591 6524.105 7290.423 8085.142 8909.899 9766.37 10656.28 11581.44 12543.69 13399.30
ANNEXURE XI: BALANCE SHEET

0
2014
1
2015
2
2016
3
2017
4
2018
5
2019
6
2020
7
2021
8
2022
9
2023
10
2024
11
2025
Liabilities
Equity Capital
Reserve and Surplus
Loan Funds
Term Loan
Working Capital loan
Total Liabilities
1062.801
71.558
3263.027
3188.402
74.625
4397.39
1062.801
376.544
3221.072
2980.463
240.609
4660.42
1062.801
705.609
2949.687
2703.210
246.476
4718.10
1062.801
1045.677
2678.557
2425.958
252.599
4787.03
1062.801
1395.344
2407.908
2148.706
259.203
4866.05
1062.801
1757.100
2137.767
1871.453
266.313
4957.67
1062.801
2133.213
1868.157
1594.201
273.956
5064.17
1062.801
2525.763
1599.108
1316.949
282.160
5187.67
1062.801
2936.685
1330.648
1039.696
290.952
5330.13
1062.801
3367.793
1062.808
762.444
300.364
5493.40
1062.801
3820.805
795.618
485.192
310.427
5679.22
1062.801
4297.371
529.114
207.939
321.175
5889.29
Assets
Project Asset
Depreciation
Current Asset
Coal Stock
Secondary Fuel
Maintenance Spares
Receivables
Cash
Total Assets
4219.67
31.535
91.001
12.910
0.973
20.396
56.723
86.718
4397.39
4093.53
126.139
311.827
54.220
4.046
21.563
231.998
255.056
4660.41
3967.39
126.139
319.137
56.931
4.208
22.796
235.202
431.572
4718.10
3841.25
126.139
326.756
59.778
4.376
24.100
238.503
619.026
4787.03
3715.11
126.139
334.987
62.766
4.551
25.479
242.191
815.959
4866.06
3588.97
126.139
343.861
65.905
4.733
26.936
246.287
1024.832
4957.66
3462.83
126.139
353.410
69.200
4.923
28.477
250.810
1247.934
5064.18
3336.69
126.139
363.669
72.660
5.120
30.105
255.784
1487.306
5187.67
3210.55
126.139
374.674
76.293
5.324
31.828
261.229
1744.905
5330.13
3084.41
126.139
386.465
80.108
5.537
33.648
267.172
2022.522
5493.40
2958.27
126.139
399.080
84.113
5.759
35.573
273.636
2321.867
5679.22
2832.14
126.139
412.564
88.319
5.989
37.607
280.648
2644.587
5889.29
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
Year
Difference
12
2026
13
2027
14
2028
15
2029
16
2030
17
2031
18
2032
19
2033
20
2034
21
2035
22
2036
23
2037
24
2038
25
2039
1062.801
4837.962
333.014
0.000
333.014
6233.78
1062.801
5400.660
347.273
0.000
347.273
6810.73
1062.801
5984.244
363.547
0.000
363.547
7410.59
1062.801
6590.244
380.660
0.000
380.660
8033.70
1062.801
7220.192
398.654
0.000
398.654
8681.65
1062.801
7875.637
417.575
0.000
417.575
9356.01
1062.801
8558.151
437.471
0.000
437.471
10058.42
1062.801
9269.338
458.392
0.000
458.392
10790.53
1062.801
10010.843
480.391
0.000
480.391
11554.03
1062.801
10784.358
503.525
0.000
503.525
12350.68
1062.801
11591.632
527.851
0.000
527.851
13182.28
1062.801
12434.473
553.432
0.000
553.432
14050.71
1062.801
13314.760
580.333
0.000
580.333
14957.89
1062.801
14060.37
453.553
0.000
453.553
15576.73
2742.95
89.186
427.453
92.735
6.229
39.759
288.731
3063.378
6233.78
2653.76
89.186
445.517
97.371
6.478
42.033
299.635
3711.450
6810.73
2564.58
89.186
466.214
102.240
6.737
44.437
312.800
4379.805
7410.60
2475.39
89.186
487.972
107.352
7.007
46.979
326.635
5070.335
8033.70
2386.21
89.186
510.844
112.719
7.287
49.666
341.172
5784.591
8681.64
2297.02
89.186
534.889
118.355
7.578
52.507
356.448
6524.105
9356.01
2207.84
89.186
560.165
124.273
7.882
55.510
372.500
7290.423
10058.42
2118.65
89.186
586.737
130.487
8.197
58.686
389.368
8085.142
10790.53
2029.46
89.186
614.671
137.011
8.525
62.042
407.092
8909.899
11554.03
1940.28
89.186
644.037
143.862
8.866
65.591
425.718
9766.369
12350.68
1851.09
89.186
674.909
151.055
9.220
69.343
445.291
10656.280
13182.28
1761.91
89.186
707.364
158.608
9.589
73.309
465.858
11581.440
14050.71
1672.72
89.186
741.485
166.538
9.973
77.503
487.471
12543.685
14957.89
1606.83
66.889
570.597
131.149
7.779
81.936
349.734
13399.30
15576.73
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
ANNEXURE XII: RATIOS

2010
2011
2012
2013
Cash Outflow
Cash Inflow
PAT
Add: Depreciation
Add: Interest on loan
Add: Interest on WC
Add: Tax
Total cash inflow
Cash to the project
Project IRR
-657.558
-900.794
-1034.16
-1002.49
0
0
0
0
0
0
-657.558
18.49%
0
0
0
0
0
0
-900.794
0
0
0
0
0
0
-1034.16
0
0
0
0
0
0
-1002.49
Cash Outflow
Cash Inflow
Cash to equity holder
Equity IRR
-547.342
0
-547.342
21.37%
0
0
0
-175.362
0
-175.362
-340.10
0
-340.10
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
71.558
31.535
105.616
9.701
18.976
237.386
237.386
304.986
126.139
415.575
31.279
80.877
958.857
958.857
329.065
126.139
381.135
32.042
87.262
955.643
955.643
340.068
126.139
344.399
32.838
108.406
951.851
951.851
349.667
126.139
307.663
33.696
131.989
949.156
949.156
361.757
126.139
270.928
34.621
154.169
947.613
947.613
376.112
126.139
234.192
35.614
175.222
947.280
947.280
392.550
126.139
197.456
36.681
195.389
948.215
948.215
410.922
126.139
160.720
37.824
214.876
950.481
950.481
431.108
126.139
123.984
39.047
233.866
954.144
954.144
71.558
304.986
329.065
340.068
349.667
361.757
376.112
392.550
410.922
431.108
71.558086 304.98623 329.06473 340.06764 349.66729 361.75651 376.11202 392.5503 410.92209 431.10764
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
453.013
126.139
87.248
40.355
252.517
959.273
959.273
476.565
126.139
50.512
41.753
270.970
965.940
965.940
540.591
89.186
13.776
43.292
290.340
977.185
977.185
562.698
89.186
0.000
45.145
306.386
1003.415
1003.415
583.584
89.186
0.000
47.261
321.146
1041.177
1041.177
605.999
89.186
0.000
49.486
336.132
1080.803
1080.803
629.948
89.186
0.000
51.825
351.426
1122.385
1122.385
655.445
89.186
0.000
54.285
367.104
1166.020
1166.020
682.514
89.186
0.000
56.871
383.237
1211.808
1211.808
711.187
89.186
0.000
59.591
399.893
1259.857
1259.857
741.505
89.186
0.000
62.451
417.134
1310.276
1310.276
773.515
89.186
0.000
65.458
435.023
1363.183
1363.183
807.274
89.186
0.000
68.621
453.620
1418.700
1418.700
842.841
89.186
0.000
71.946
472.983
1476.956
1476.956
880.287
89.186
0.000
75.443
493.170
1538.086
1538.086
453.013
476.565
540.591
562.698
583.584
605.999
629.948
655.445
682.514
711.187
741.505
773.515
807.274
842.841
880.287
453.01274 476.56532 540.59141 562.69847 583.58389 605.9992 629.94819 655.44518 682.51395 711.18699 741.50481 773.51537 807.27366 842.841393 880.286707
ANNEXURE XIII: DSCR

Year
PAT
Add: Depreciation
Add: Interest on Term Loan
Add: Tax
Total
0
2014
71.558
31.535
105.616
18.976
227.685
1
2015
304.986
126.139
415.575
80.877
927.578
2
2016
329.065
126.139
381.135
87.262
923.602
3
2017
340.068
126.139
344.399
108.406
919.013
4
2018
349.667
126.139
307.663
131.989
915.460
5
2019
361.757
126.139
270.928
154.169
912.993
6
2020
376.112
126.139
234.192
175.222
911.665
7
2021
392.550
126.139
197.456
195.389
911.534
8
2022
410.922
126.139
160.720
214.876
912.657
9
2023
431.108
126.139
123.984
233.866
915.097
10
2024
453.013
126.139
87.248
252.517
918.917
11
2025
476.565
126.139
50.512
270.970
924.187
12
2026
540.591
89.186
13.776
290.340
933.893
Principal Repayment
Interest Payment
Total Debt Services
0.000
105.616
105.616
207.939
415.575
623.515
277.252
381.135
658.388
277.252
344.399
621.652
277.252
307.663
584.916
277.252
270.928
548.180
277.252
234.192
511.444
277.252
197.456
474.708
277.252
160.720
437.972
277.252
123.984
401.236
277.252
87.248
364.500
277.252
50.512
327.764
207.939
13.776
221.715
2.156
1.403
2.106
4.212
1.488
1.403
1.478
1.565
1.665
1.783
1.920
2.084
2.281
2.521
2.820
4.212
DSCR
Minimum DSCR
Average DSCR
Maximum DSCR

Final Report (Ankit Doveriyal, 15)

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SUMMER INTERNSHIP REPORT

PROJECT APPRAISIAL AND FINANCIAL MODELLING

UNDER THE GUIDANCE OF

(Under ministry of Power, Govt. of India)

MAHARSHI DAYANAND UNIVERSITY, ROHTAK

I, Ankit Doveriyal, Roll No 15, student of MBA-Power Management (2012-14) at

Signature of the Candidate

Entity Appraisal is carried out by Entity Appraisal Department and involves

Boiler, Turbine & Generator

Central Electricity Authority

Central Electricity Regulatory Commission

Commercial Operation Date

Detailed Project Report

Engineering, procurement & construction Contract

Fuel Supply arrangement/agreement

Fuel Transport Agreement

Gross Calorific Value

Independent Power Producer

Interest During Construction

Kilo Watt Hour

Ministry of Environment & Forest

Operations & Maintenance

Power Finance Corporation Ltd.

Power Grid Corporation of India Limited

Plant Load Factor

Power Purchase Agreement

Rural Electrification Corporation

CHAPTER 2: COMPANY PROFILE.....10

CHAPTER 3: OBJECTIVE AND SCOPE..16

CHAPTER 4: LITERATURE REVIEW AND RESEARCH

CHAPTER 5: PROJECT APPRAISAL & FINANCIAL MODELLING....22

CHAPTER 6: CASE STUDY29

CHAPTER 7: RISK ANALYSIS & SWOT ANALYSIS...47

INDIAN POWER SECTOR

1.2. POWER SECTOR REFORMS

1.3 INTRODUCTION TO INDIAN POWER SECTOR

Figure 2: Energy Production in Billion kWh (2010)

Northern 33073.50 5031.26 12.99

1.4 POWER SECTOR: KEY DEVELOPMENTS AND CURRENT

1.5 MAJOR ISSUES

namely in Sundergarh District (Orissa), Cheyyur (Tamil Nadu), Girye (Maharashtra),

CHAPTER 2: COMPANY PROFILE

2.3 CREDIT RATINGS

To rise thee resources from internnational and

State Electtricity Boards

State Poweer Utilities

State Electtricity/Poweer Departmeents

Other Staate Departm

Central Poower Utilitiees

Joint Secctor Powerr Utilities and Cooperative Societies

Private Secctor Power Utilities

Rupee Terrm Loan

Foreign Cuurrency Terrm Loan

Buyers Liine of Crediit

Loan to Eqquipment manufacturer

Debt Restrructuring/ Refinancing

Take out Financing

Exchange Risk Manag

PFC is prroviding fin

PFC has decided

Sourcce: PFC Website

Table 3: Sanctions & Disbursements for the respective financial years

Source: PFC website