Bepl 450 Mw Im_final (1)

Information Memorandum

Volume I

450 MW Thermal Power ProjectBajaj Energy Private Limited

(A Subsidiary of Bajaj Hindusthan

Limited)

Prepared By

SBI Capital Markets Limited

6th Floor, World Trade Tower Barakhamba Lane, New Delhi

110001

Draft Project Information Memorandum - BHL (5 x 90 MW)

Head Office: 202, Maker Tower ‘E’, Cuffe Parade, Mumbai

400 005

April 2010

Strictly Private & Confidential 2

Bajaj Energy Private Ltd Project Information Memorandum 450

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IMPORTANT NOTICE

This Information Memorandum (“IM”) has been prepared for 450 MW (2 X 45 MW at 5 locations) Thermal Power Project (“the Project”) being set up by Bajaj Energy Private Limited (“BEPL” or ‘the Company”), a wholly owned subsidiary of Bajaj Hindusthan Limited (BHL), at Barkhera (district: Pilibhit), Khambarkhera (district: Lakhimpuri Kheri), Maqsudapur (district: Shajhanpur), Kundarkhi (district: Gonda), Utraula (district: Balrampur), of Uttar Pradesh. Its contents are strictly confidential and accordingly, this IM and its contents are circulated on the basis that they will be held in and with complete confidentiality. By accepting a copy of this IM, the recipient agrees to keep its contents and any other information, which is disclosed to such recipient, confidential and shall not divulge, distribute or disseminate any information contained herein, in part or in full, without the prior written approval of SBI Capital Markets Limited (“SBICAP”). The recipient also agrees to indemnify SBICAP against any claims that may arise as a result of a breach of any confidentiality arrangement, which governs the contents of this IM.

This IM has been prepared for the internal use of prospective lenders for 450 MW Thermal Power Project of BEPL and may contain proprietary and confidential information about the Project and the Sponsor. This IM has been prepared by SBICAP, inter alia, on the basis of the information and documents available in the public domain, data made available by the Sponsor and in-house databases available to SBICAP as a part of its professional practice & which SBICAP believes to be reliable. SBICAP has not carried out any independent verification for the accuracy or truthfulness of the same.

This IM constitutes an opinion expressed by SBICAP and each party concerned has to draw its own conclusions on making independent enquiries & verifications and SBICAP cannot be held liable for any financial loss incurred by anyone based on this IM. Further, on accepting a copy of this IM, the recipient accepts the terms of this Notice, which forms an integral part of this IM and the recipient shall be deemed to have agreed to indemnify SBICAP against any claims that may be raised against SBICAP as a result of or in connection with the data & opinions presented in this IM.

The delivery of this IM does not imply that the information in it is correct as of any time after the date set out on the cover page hereof, or that there has been no change in the operation, financial condition, prospects, creditworthiness, status or affairs of the subject or anyone else since that date. Further, capital costs and operating expenditures are subject to uncertainties concerning the effects that change in



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legislation or economic or other circumstances may have on future events, and different people may have a different view in future. There will usually be differences between projected & actual results because events & circumstances do not occur as expected and those differences may be material. Under the circumstances, no assurance can be provided that the assumptions or data, upon which any projections have been based, are accurate or whether these financial projections will actually materialize.

Neither SBICAP, nor State Bank of India or any of its associates, nor any of their respective directors, employees or advisors make any expressed or implied representation or warranty and no responsibility or liability is accepted by any of them with respect to the accuracy, completeness or reasonableness of the facts, opinions, estimates, forecasts, projections, or other information set forth in this IM or the underlying assumptions on which they are based or the accuracy of any computer model used and nothing contained herein is, or shall be relied upon as a promise or representation regarding the historic or current position or performance of the Sponsor, or any future events or performance of the Sponsor.

This IM is divided into sections & sub-sections only for the purpose of reading convenience. Any partial reading of this IM may lead to inferences, which may be at divergence with the conclusions and opinions based on the entirety of this IM. Neither this IM, nor the information contained herein, may be reproduced or passed to any person or used for any purpose other than stated above.



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Contact Persons

SBI CAPITAL MARKETS

LIMITED

(A Subsidiary of State Bank of

India)

6th Floor, World Trade Tower,

Barakhambha Lane,

New Delhi 110 001

Tel. +91-11 2341 8460

Fax. +91-11 2341 7783

Website: www.sbicaps.com

Mr. Mukul ModiVice President, Project Advisory & Structured FinancePh. 011- 2341 8491Fax 011- 2341 6292Mob. +91-9811776510e-mail: [email protected]

Ms. Neha GoelManager,Project Advisory & Structured FinancePh. 011 – 2341 8460 (Extn: 413)Fax 011 – 2341 6292Mob. +91-9560397199e-mail: [email protected]

Mr. Lovkesh KapoorManager, Project Advisory & Structured FinancePh. 011- 2341 8460 (Extn: 409)Mob. 91-9560397202e-mail: [email protected]

Mr. Pulkit BhandariDeputy Manager, Project Advisory & Structured FinancePh. 011- 2341 8460 (Extn: 403)



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Mob. 91-9818678668e-mail: [email protected]

Table of Contents

1 Introduction....................................................................................10

2 The Company.................................................................13

2.1 General Particulars – The Company.........................................13

2.2 Background of the Company...................................................13

2.3 Key Management Personnel....................................................14

2.4 Capital Structure – BEPL..........................................................14

2.5 Board of Directors - BEPL.........................................................15

2.6 Historical Financial Performance of BEPL.................................16

2.7 Promoter Company – BHL........................................................17

3 Project Details................................................................27

3.1 Location of the Project.............................................................27

3.2 Key Project Inputs....................................................................28

3.3 Primary Fuel Requirement and Availability..............................29

3.4 Evacuation of Power................................................................31

4 Implementation Framework............................................33

4.1 Project Implementation Framework.........................................33

4.2 State Support - MoU with Government of Uttar Pradesh.........33

4.3 Technical Arrangements..........................................................34

4.4 Operation & Maintenance Arrangement..................................42



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4.5 Power Sale Arrangements.......................................................42

4.6 Power Evacuation Arrangement..............................................46

4.7 Schedule of Implementation....................................................46

5 Industry Scenario...........................................................48

5.1 Power Sector Scenario in India: A Perspective.........................48

5.2 Region wise Demand Supply Scenario.....................................52

5.3 Analysis of Present Capacity....................................................53

5.4 Capacity Addition Program......................................................55

5.5 Power Trading Scenario...........................................................58

5.6 Regulatory Scenario................................................................60

5.7 Conclusion...............................................................................61

6 Project Cost and Means of Financing...............................63

6.1 Components of Project Cost....................................................63

6.2 Means of Financing..................................................................67

7 Financial Projections – Snapshot.....................................68

7.1 Project Financials.....................................................................68

7.2 Sensitivity Analysis..................................................................69

8 Status of Approvals and Clearances................................71

9 Risk Analysis..................................................................74

9.1 Risk Analysis – Allocation & Mitigation.....................................74

10 Conclusion...................................................................80

11 Indicative Term Sheet..................................................82

11.1 Indicative Terms and Conditions – Rupee Term Loan..............82

12 Annexure...................................................................103

12.1 Annexure I: Historical Financials of BHL................................103

12.2 Annexure II: Detailed Banking Arrangement of BHL..............105

12.3 Annexure III: Project Implementation Schedule.....................108

12.4 Annexure IV: Key Assumptions..............................................109

12.5 Annexure V: Award of Coal Linkage for the Project...............112

12.6 Annexure VI: Brief profile of Contractors...............................113

12.7 Annexure VII: Projected Financials of Project.........................119



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List of Tables

Table 1: Particulars of BEPL..................................................................13

Table 2: Key Management Personnel...................................................14

Table 3: Capital Structure of BEPL........................................................14

Table 4: Share Holding pattern of BEPL................................................15

Table 5: Board of Directors of BEPL......................................................15

Table 6: Snapshot of Balance Sheet of BEPL........................................16

Table 7: Particulars of BHL...................................................................17

Table 8: Location of existing cogeneration power plants.....................18

Table 9: Board of Directors of BHL.......................................................20

Table 10: Capital Structure of BHL.......................................................22

Table 11: Share Holding pattern of BHL...............................................22

Table 12: Snapshot of Profit & Loss account of BHL.............................23

Table 13: Snapshot of Balance Sheet of BHL.......................................23

Table 14: Credit Rating........................................................................25

Table 15: Snapshot of Debt Arrangement of BHL.................................25

Table 16: Details of Accessibility of sites.............................................27

Table 17: Break-up of land requirement..............................................28

Table 18: Coal Requirement Estimation...............................................29

Table 19: Transportation details of Coal...............................................30

Table 20: Estimation of cost of coal for the project..............................30

Table 21: UPPCL Sub-stations...............................................................31

Table 22: Key personnel of BIDCO.......................................................35

Table 23: Details of BTG contracts.......................................................37

Table 24: Key features of contracts for Boiler and Auxiliaries..............37

Table 25: Key features of contracts for Steam Turbine and Generator 40

Table 26: Schedule of Implementation.................................................46

Table 27: Year Wise Power Demand Supply Scenario..........................50

Table 28: Power Deficit vs Highest Power Consumption in India..........51

Table 29: AT&C losses..........................................................................51



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Table 30: Region Wise Demand-Supply Scenario.................................52

Table 31: Demand Supply Scenario in Northern Region States...........52

Table 32: Projected Power Requirement in Northern Region...............53

Table 33: Ownership Mix of the Installed Generation Capacity............54

Table 34 : Capacity Additions Required in Uttar Pradesh.....................57

Table 35: Power Trading Entities and Respective Market Shares in

2007-08................................................................................................59

Table 36: Estimation of Cost of Project................................................63

Table 37: Components of Financing.....................................................67

Table 38: Snapshot of financial parameters of the Project...................68

Table 39: Sensitivity Analysis...............................................................69

Table 40: Status of Approvals and Clearances....................................71

Table 41: Risk Analysis.........................................................................74

List of Figures

Figure 1: Holding Structure of BEPL.....................................................13

Figure 2: Family Tree of Bajaj Group....................................................19

Figure 3: Location Map.........................................................................27

Figure 4: Project Structure...................................................................33

Figure 5: Installed Generation Capacity...............................................48

Figure 6: Per Capita Consumption........................................................49

Figure 7: Growth in Private Participation in Power Sector....................54

Figure 8: Installed Capacity by Type of Fuel........................................55

Figure 9: Long Term Capacity Addition Projections..............................55

Figure 10: Plan Wise Capacity Additions..............................................57

Figure 11: Historical Trend of Merchant Power Transaction.................58

Figure 12: Price Analysis of Traded Power...........................................60

List of Abbreviations



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Abbreviations

Descriptions

AAI Airport Authority Of IndiaAOA Articles Of AssociationAT&C Aggregate Technical and Commercial BEPL Bajaj Energy Private LimitedBHL Bajaj Hindusthan LimitedBHSIL Bajaj Hindusthan Sugar & Industries LimitedBIDCO Bajaj Infrastructure Development Company

LimitedBOD Board Of DirectorsCEA Central Electricity AuthorityCERC Central Electricity Regulatory CommissionCOD Commercial Operation DateCTU Central Transmission UtilityDPR Detailed Project ReportEA03 Electricity Act 2003EPC Engineering, Procurement And ConstructionEPS Electric Power SurveyFM Force MajeureFSA Fuel Supply AgreementGCV Gross Calorific ValueGOI Government Of IndiaGoM Group of MinistersGoUP Government of Uttar PradeshGW Giga WattHFO Heavy Fuel OilIDC Interest During ConstructionIPP Independent Power ProducerKV Kilo VoltKWh Kilowatt HourLD Liquidated DamagesLDO Light Diesel OilLOI Letter Of IntentMDO Mine, Develop, OperateMLD Million Liters Per DayMOA Memorandum Of AssociationMoEF Ministry Of Environment And ForestMoU Memorandum Of Understanding



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Abbreviations

Descriptions

MT Million TonneMTPA Million Tonne Per AnnumMU Million UnitsMW Mega WattNTP Notice To ProceedO&M Operation And MaintenancePDC Pre-Disbursement ConditionPLF Plant Load FactorPNB Punjab National BankPPA Power Purchase AgreementPTC Ptc India LimitedSG Steam GeneratorSTG Steam Turbine GeneratorTCD Tonnes Crushed Per DayTG Turbine GeneratorUPERC Uttar Pradesh Electricity Regulatory CommissionUPPCL Uttar Pradesh Power Corporation Limited


http://www.google.co.in/url?sa=t&source=web&ct=res&cd=1&ved=0CAgQFjAA&url=http%3A%2F%2Fwww.uperc.org%2F&rct=j&q=uperc&ei=hyibS_jkKsqyrAfpgZXRAg&usg=AFQjCNHDYQAJyuiiYaKTBSBHH8nXv5GLcw


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1 Introduction

Bajaj Energy Private Limited (BEPL) is promoted by Bajaj Hindusthan

Limited (BHL), the flagship company of Shishir Bajaj Group. BEPL

proposes to set up 450 MW (2 x 45 MW at 5 locations) coal fired

Thermal Power Project under the current proposal.

The promoter company, BHL is India’s leading sugar and ethanol

manufacturing company, headquartered at Mumbai. BHL has fourteen

sugar units spread across the north Indian state of Uttar Pradesh (UP)

with ten units functioning under it and balance four units operating

under its subsidiary, Bajaj Hindusthan Sugar and Industries Limited

(BHSIL). The aggregate crushing capacity of BHL is 136,000 tonnes

crushed per day (tcd) including capacity of BHSIL of 40,000 tcd.

BHL is the pioneer of India’s fuel ethanol programme, being the largest

ethanol producer in the country. It produced 52 million litres of

industrial alcohol (ethanol being the major contributor) during FY 2008-

09. It also has a distillery capacity to produce 800,000 litres of alcohol

per day.

BHL has also set up small co-generation power units (8-40 MW) at its

existing sugar units. The total generation capacity of the plants is

around 428 MW.

Under the current proposal, BEPL is setting up 450 MW coal fired power

plant in the premises of five (5) of existing sugar units of BHL and

BHSIL at Barkhera (district: Pilibhit), Khambarkhera (district:

Lakhimpuri Kheri), Maqsudapur (district: Shajhanpur), Kundarkhi

(district: Gonda), Utraula (district: Balrampur), of Uttar Pradesh.



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The project is expected to be commissioned by November 1st 2011 and

is one of the few projects to be commissioned under 11th Five Year

Plan. The land for the project is already available and site development

and civil works are already being carried out. The contracts for BTG

and civil works have already been placed with reputed suppliers. BHL

has already incurred expenditure around Rs. 438 crores on the Project.

Moreover, BHL has vast experience in implementing projects and has

commissioned 1,06,000 tcd of green field sugar units across Uttar

Pradesh.

Initially the Project was envisaged to be implemented by BHL and

accordingly the process of obtaining statutory and other clearances

and award of major project contracts was initiated by BHL. However,

subsequently BHL decided to implement the Project through a special

purpose vehicle viz Bajaj Energy Private Limited, which is presently its

wholly owned subsidiary.

On December 24, 2009, BHL awarded a Project Co-ordination,

Management Consultancy and Implementation Support contract to

Bajaj Infrastructure Development Company Limited (BIDCO). As per the

Letter of Award (LoA), BIDCO shall be responsible for overall

implementation of the Project including award of major project

contracts, project management and construction supervision etc.

BIDCO has placed major orders including Boiler and Auxiliaries to

ThyssenKrupp Industries India and Thermax Limited and Turbine &

Generator package to Siemens Limited. BIDCO has also awarded Civil

Works packages to ERA Building Systems Limited, K.K Construction

Builders Limited and Petron Civil Engineering Private Limited.

An MoU was executed on 14th January, 2010 between Government of



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Uttar Pradesh (GoUP) and BHL for setting up the project in the state of

Uttar Pradesh. GoUP has assured its help in expediting various

statutory approvals/clearances for the Project.

An MoU was signed between Uttar Pradesh Power Corporation Limited

(UPPCL) and BHL on 31st December, 2009 for sale of power from the

Project. As per the MoU, UPPCL will procure at least 50% of the net

power generated from the Project. Subsequently, UPPCL and BHL have

initialled the Draft Power Purchase Agreement (PPA) for sale of 90% of

net power generated from the Project. The final PPA is expected to be

signed soon. The tariff under the PPA shall be calculated as per the

Uttar Pradesh Electricity Regulatory Commission (UPERC) tariff

determination guidelines. Balance 10% power from the Project is

proposed to be sold on merchant basis.

The Project is proposed to commence commercial operations in 22

months from the date of issuance of Letter of Award to BIDCO, i.e. by

November 01, 2011.

Estimated cost of the Project is Rs. 2,320 Crores and is proposed to be

funded at a Debt: Equity ratio of 75:25. The proposed financing mix

entails Debt of Rs. 1740 Crores and Equity of Rs. 580 Crores. The

entire equity requirement for the Project would be contributed by

BHL/Promoter Group.

In order to facilitate its debt raising efforts, BHL has appointed SBI

Capital Markets Limited (“SBICAP”) to prepare the Information

Memorandum for the Project and approach Commercial Banks and

Financial Institutions on its behalf to arrange funds.



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2 The Company

2.1 General Particulars – The Company

Table 1: Particulars of BEPL

Name : Bajaj Energy Private Limited (BEPL)Incorporation Date : 27th June, 2008Sector : Power GenerationCorporate Office : Bajaj Bhawan, Jamnalal Bajaj Marg, B-10,

Sector-3, Noida-201301, Uttar Pradesh Registered Office : Bajaj Bhawan, Jamnalal Bajaj Marg, 226,

Nariman Point, Mumbai-400021

2.2 Background of the Company

The Company was incorporated on 27th June, 2008 as Bajaj Eco-Chem

Products Private Limited. Subsequently, on 19th March, 2010 the name

of the Company was changed to Bajaj Energy Private Limited (BEPL).

Fresh certificate of incorporation has been received from Registrar of

Companies (Enclosed in Volume II of this IM).

The Company is promoted by Bajaj Hindusthan Limited (BHL), the

flagship company of Shishir Bajaj Group. The Company is a wholly

owned subsidiary of BHL. Pictorial presentation of the Group holding

structure is as under:

Figure 1: Holding Structure of BEPL



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2.3 Key Management Personnel

BEPL is establishing a team of qualified and experienced personnel for

implementation and subsequent operation of the Project. Brief details

of the key management personnel for the Project are given below.

Table 2: Key Management Personnel

Name DesignationEducational Qualification

Experience

(years)Dr. Sanjeev Kumar Director (Legal &

Corporate Affairs)M.Com, LL.B,

30

Mr. N. K. Balasubramanian

Advisor (Power) BE (Mech.), 48

Mr. D.L. Narasimham Advisor (Power)BE (Mech.), PGDM (International Marketing)

41

Mr. Manoj Maheshwari Chief Financial Officer B.Com (H), FCA, FCS 23

Mr. Sachin Sharma Executive President PGDM8

Mr. Vivek Srivastava Vice President - Group HR

MSW, BA21

Mr. Birendra Kr. Agarwal

Vice President (Corporate Commercial)

B.Com.(H), MBA, Lead Auditor

26

Mr. Ajay Vikram Singh Vice President (EHS)

M.Sc., PG Diploma(Industrial Safety & Environment)

25

Mr. N. K .Kashyap Vice President (Indirect Taxation)

B.Com., Diploma (Excise & Custom)

29

Mr. Subodh Kumar Garg

General Manager (Finance & Accounts)

B.Com, C.A.24

2.4 Capital Structure – BEPL

The capital structure of BEPL as on 31st March, 2010 is as under –

Table 3: Capital Structure of BEPL

Particulars Rs. CroreAuthorized Share Capital30,00,000 Equity shares of Rs. 10/- each

3.00

Issued, Subscribed and Paid-up 0.81



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Particulars Rs. CroreCapital of 8,10,000 Equity shares of Rs. 10/- each

The shareholding pattern of BEPL as on 31st March, 2010 is as under:

Table 4: Share Holding pattern of BEPLCategory of Shareholder Total

number of shares

Percentage)

(A) Promoter and Promoter GroupIndian – Bajaj Hindusthan Limited

100.00

Total 100.00

Currently, the entire shareholding of BEPL is being held by BHL. The

Company proposes to expand its capital base shortly. It is expected

that BHL and Promoter Group would subscribe to entire shareholding of

BEPL initially. The exact shareholding/equity contribution pattern of

BEPL is expected to be finalised in next 2-3 months (finalization of

exact shareholding pattern is stipulated as a Pre-commitment

Condition). During the currency of the loan, BHL and Promoter Group

would maintain a minimum equity shareholding of 51% with BHL

holding a minimum of 26% stake (maintenance of aforesaid interests in

BEPL stipulated as a Negative Covenant).

2.5 Board of Directors - BEPL

Presently, BEPL is managed by a Board of Directors comprising of two

(2) directors. The Company proposes to suitably broad-base and

strengthen its Board of Directors shortly. Present composition of the

Board of Directors is as shown below:

Table 5: Board of Directors of BEPLName of the Director Designation

1. Mr. Pradeep Parakh Director2. Mr. Chandresh Chhaya Director



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A brief profile of the directors of the Company is given below:

Mr. Pradeep Parakh, has been on Board of BEPL since its inception.

He joined BHL in March 2001 and is presently designated as its

President and Company Secretary. He holds a B. Com (Honours)

degree and is a Chartered Accountant and Company Secretary by

qualification. He has over 21 years of experience with strengths in

areas of Corporate Law, Corporate Governance and Finance.

Mr Chandresh Chhaya, is currently on the Board of BEPL as one of its

directors. He is employed with BHSIL as Manager and Company

Secretary. He is a graduate in Commerce and Law and is a fellow

member of The Institute of Company Secretaries of India as well as The

Institute of Cost and Works Accountants of India. He has over 20 years

of experience in areas of Corporate Law and Secretarial Practice.

The Company has confirmed that the name of none of the directors

appears in defaulters list of RBI, CIBIL defaulters list and ECGC SAL.

The letter certifying the same is enclosed in Volume II of this IM.

2.6 Historical Financial Performance of BEPL

A brief summary of Balance Sheet of the Company (Financial Year

ending March 31) is given below:

Table 6: Snapshot of Balance Sheet of BEPLRs. lakh

FY Ending March 31,2009 As on

December, 2009

Net Fixed Assets - - Capital work in progress 62.58 72.72 Investments - - Current assets 15.12 4.87



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FY Ending March 31,2009 As on

December, 2009

Total Assets 77.7 77.59 Equity share capital 81.00 81.00 Reserves and surplus - -Current liabilities and provisions

0.11 -

Less: Miscellaneous Expenses 3.41 3.41 Total Liabilities and Provisions

77.7 77.59

There have been no major business operations in BEPL since its

incorporation and the Company now proposes to focus mainly on its

power operations.

2.7 Promoter Company – BHL

2.7.1General Particulars

Table 7: Particulars of BHLName : Bajaj Hindusthan Limited (BHL)Incorporation Date : 23rd November, 1931Sector : Sugar ManufacturingRegistered Office : Bajaj Bhawan, Jamnalal Bajaj Marg, 226,

Nariman Point, Mumbai-400021Existing Operations : 10 sugar units with capacity of 96,000

tcd under BHL and 4 sugar units with capacity of 40,000 tcd under its subsidiary BHSIL;

428 MW bagasse based co-generation power plant is in operation.

BHL, promoter of BEPL, was incorporated on 23rd November, 1931 as

Hindusthan Sugar Mills Limited. BHL was founded by Late Shri Jamnalal

Bajaj.

BHL started its operations by setting up its first sugar unit at

Golagokarannath, district Lakhimpur Kheri of Uttar Pradesh. In 1967, a

new company - Sharda Sugar & Industries Limited - was established as



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a subsidiary of Hindusthan Sugar Mills Limited. Under this new

subsidiary, a sugar plant with a cane crushing capacity of 1400 tcd was

set up in 1972 at Palia Kalan about 70 kilometers from

Golagokarannath. The capacity was subsequently increased in stages

to reach 11,000 tcd. In 1988, Hindusthan Sugar Mills Limited was

renamed as Bajaj Hindusthan Limited and shortly thereafter in 1990,

Sharda Sugar & Industries Limited was amalgamated with Bajaj

Hindusthan Limited. BHL embarked on an aggressive Greenfield

expansion drive in 2003-2007, starting with a plant at Kinauni, near

Meerut (UP), which was completed in a record time of seven months.

The facility commenced commercial production in November 2004.

In December 2005, BHL acquired Pratappur Sugar and Industries

Limited (PSIL), district Deoria, Eastern UP. PSIL was subsequently

renamed Bajaj Hindusthan Sugar and Industries Limited (BHSIL). This

acquisition provided BHL a strategic foothold in the sugar-deficient

region of Eastern UP.

BHSIL embarked upon significant expansions and set up three new

sugar units were Eastern UP at Rudauli (district Basti), Kundarkhi

(district Gonda) and Utraula (district Balrampur). BHSIL now has a

crushing capacity of 40,000 tcd and a distillery with the capacity to

manufacture 160 kilo-liter (KL) per day of ethanol. The total industrial

alcohol/ ethanol capacity of the company, including its subsidiary, is

800 KL/ day.

BHL also generates around 428 MW of power from the co-generation

plant. After meeting its own energy needs, BHL has a surplus of over

90 MW. It has already begun to supply a significant part of this surplus

power to the UP state grid. The details are as follows:

Table 8: Location of existing cogeneration power plants



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Units LocationPower MW)

Unit in BHL Golagokarannath Lakhimpur 30 Palia Kalan Lakhimpur 40 Khambarkhera Lakhimpur 35 Barkhera Pilibhit 35 Maqsoodapur Shahjahanpur 30 Kinauni Meerut 35 Bilai Bijnore 35 Thanabhawan Muzaffarnagar 35 Budhana Muzaffarnagar 40 Gangnauli Saharanpur 25

Total in BHL 340Unit in BHSIL Pratappur Deoria 8 Kunderki Gonda 43 Utraula Balrampur 21 Rudauli Basti 46

Total in BHSIL 88Total Group Capacity 428

2.7.2Promoter Profile of BHL

BHL belongs to Shishir Bajaj Group which is part of “Bajaj Group”. Bajaj

Group of companies was founded by Late Shri Jamnalal Bajaj in the

1930s. The group now has 24 companies, including 6 listed companies.

The family tree of the Bajaj Group is as follows:

Figure 2: Family Tree of Bajaj Group



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Mr. Shishir Bajaj, 62, is the Chairman and Managing Director of BHL

for over twenty (20) years. Mr Bajaj holds an MBA degree from New

York University in finance. He joined BHL in 1974 and has been

responsible for overall management of the company since then. He is

the Managing Director of the company since July 1988.

2.7.3Board of Directors

BHL is managed by a Board of Directors comprising eight directors.

Composition of the Board of Directors is as shown below:

Table 9: Board of Directors of BHLName of the Director Designation

1 Mr. Shishir Bajaj Chairman & Managing Director

2 Mr. Kushagra Bajaj Vice Chairman3 Mr. D S Mehta Director4 Mr. M.L. Apte Director5 Mr. Ravindrakumar V. Ruia Director6 Mr. Dinesh Kumar Shukla Director7 Mr. Alok Krishna Agarwal Director8 Dr. Sanjeev Kumar Whole Time Director

As mentioned earlier, Mr. Shishir Bajaj serves as the Chairman and

Managing Director on the Board of BHL. A brief profile of other

directors of the company is given below:

Mr. Kushagra Bajaj, is the Vice Chairman of BHL. He joined

BHL in 2001 as Chief Executive and was inducted on its board in

April, 2007. He has a Bachelor of Science degree in Economics,

Political Philosophy and Finance from Carnegie Mellon,

Pittsburgh, USA and has a master degree in Marketing from

North-western University, Chicago, USA. He is responsible for

overall operations of the company.

Mr. D S Mehta has been on the Board of BHL since January



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1986. He also holds directorship in various other Bajaj group

companies. He graduated with an honours degree in commerce

from Mumbai University and he is an alumnus of Sydenham

College. He is a fellow member of the Institute of Chartered

Accountants of India and the Institute of Company Secretaries of

India. He has been associated with the Bajaj Group of companies

since 1966 and has more than 30 years experience in corporate

law, taxation, finance and investment.

Mr. M.L. Apte, is associated with BHL as director for over 33

years. He has held various prestigious positions including Sheriff

of Mumbai; he was also a former President of Maharashtra

Chamber of Commerce, Bombay Chamber of Commerce, Cricket

Club of India, Indian Sugar Mills Association, Member of the

Indian Cotton Mills Federation and Chairman of the Textiles

Committee.

Mr. Ravindrakumar V Ruia, joined the Board of BHL in April

2001. He is the Executive Director of the Dawn Mills Company

Limited. He is also a Director of Special Paints Ltd. and Special

Paints (Karnataka) Ltd. apart from various other Ruia group

companies. He is also Committee Member of The Bombay Mill

owners' Association, Indian Cotton Mills Federation and Bombay

Textile Research Association and is associated with various

public charity trusts as Trustee.

Mr. Dinesh Kumar Shukla, has been associated with BHL as

nominee of LIC since October, 2001 and also as a member of the

Audit Committee. He is a B. A. and Masters of Social Work

(M.S.W). He retired as an Executive Director (Personnel) in

February, 2003 from Life Insurance Corporation of India (LIC).



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During his tenure with LIC, he occupied positions like Regional

Manager – Marketing, Group Pension and Superannuation

Schemes of LIC at Kolkata (Eastern Zone) as well as in-charge of

3 LIC divisions viz. Raipur, Jabalpur and Bhopal.

Mr. Alok Krishna Agarwal, joined the Board of BHL in April,

2007. He is the founder managing partner of Juris Consultus, New

Delhi. In 1988 he was admitted to Bar Council in India. He is also

an associate member of Bar Council of Delhi, Supreme Court Bar

Association, International Bar Association, Indo American

Chamber of Commerce & FICCI.

Dr. Sanjeev Kumar, is presently working as Group President

(Corporate & Legal Affairs) of BHL with experience of more than

20 years. He was appointed as a Whole Time Director from 12

March, 2009. He has degrees in Masters of Commerce,

Doctorate, LL.B, Diploma in Intellectual Property Rights Laws,

Cost Accountant and Company Secretary.

BHL has confirmed that the name of none of the directors appears in

defaulters list of RBI, CIBIL defaulters list and ECGC SAL. The letter

certifying the same is enclosed in Volume II of this IM.

2.7.4Capital Structure- BHL

The capital structure of BHL as on 31st December 2009 is as under –

Table 10: Capital Structure of BHLParticulars Rs. CroreAuthorized Share Capital80,00,00,000 Equity shares of Rs. 1/- each

80.00

Issued, Subscribed and Paid-up Capital of 17,68,57,111 Equity shares of Rs. 1/- each

17.68



MW Power Project

The shareholding pattern of BHL as on 31st December 2009 was as

under:

Table 11: Share Holding pattern of BHLCategory of Shareholder Total

number of shares

As a percentage of

(A+B+C)(A) Promoter and Promoter

GroupIndian 65561186 37.07

(B) Public Holding1 Institutions

Mutual Funds/ UTI 15161871 8.57 Financial Institutions/ Banks 1224034 0.69 Central Government/ State Government(s)

1500 0.00

Insurance Companies 9696465 5.48 Foreign Institutional Investors 41285678 23.34 Sub-Total (B)(1) 67369548 38.09

2 Non-institutions Bodies Corporate 17080800 9.66 Individuals 22362803 12.64Others 2882174 1.63Sub-Total (B)(2) 42325777 23.93 Total Public Shareholding (B)= (B)(1)+(B)(2)

109695325 62.02

Total (A)+(B) 175256511 99.09

(C) Shares held by Custodians and against which Depository Receipts have been issued

1600600 0.91

Grand Total (A)+(B)+(C) 176857111 100.00

2.7.5Historical Financial Performance of BHL

A brief summary of Profit & Loss account and Balance Sheet of the

company for the past four years (BHL follows accounting year ending

September 30) is given below:



MW Power Project

Table 12: Snapshot of Profit & Loss account of BHLRs crore

FY Ending September 30,

2006 2007 2008 2009

Net Sales 1,447

.24 1,713.0

11,756.2

8 1,583.7

4 PBDIT 350.42 248.46 218.54 595.29 PBT 280.17 37.89 (108.13) 206.00

PAT190.83 45.

70 (47.69)

156.23

Depreciation 72.39 146.88 187.22 202.21

Cash Profit347.85

183.49 77.

71 407.5

5 PBDIT / Net Sales (%) 24% 15% 12% 38%

Table 13: Snapshot of Balance Sheet of BHLRs. Crore

FY Ending September 30, 2006 2007 2008 2009

Net Fixed Assets 1,013.48 2,220.6

4 2,478.8

3 2,632.

50 Capital work in progress 1,223.08 562.97 138.69 131.28 Investments 205.81 437.47 488.26 549.11

Current assets 941.83 2,109.0

5 2,525.4

7 3,034.

42

Total Assets 3,384.2

15,330.

13 5,631.

25 6,347.

30 Equity share capital 14.14 14.14 14.14 36.59

Reserves and surplus1,354.53 1,420.1

91330.9

672257.0

78Current liabilities and provisions 475.45

1,868.87

1,676.67

1,409.96

Secured loans 344.2

1 1,051.

04 1,949.

54 1,417.

22

Unsecured loans 1,065.92

855.01 600.99 1118.4

2 Deferred tax liabilities 129.96 120.88 58.94 108.04 Total Liabilities and Provisions

3,384.21

5,330.13

5,631.25

6,347.31

Net worth 1,498.

63 1,555.

21 1,404.

04 2,401.

70 Current Ratio 1.98 2.39 3.09 3.49Debt Equity Ratio 1.03 2.02 2.53 1.34TOL/TNW 1.26 2.43 3.01 1.64



MW Power Project

For FY 2008-09, BHL reported sales of around Rs 1,584 crore and

PAT of Rs 156.23 crore. BHL incurred operational losses in FY

2007-08 mainly due to higher sugarcane prices and excess

production of sugar. Due to excess supply of sugar globally, the

sugar prices declined but the raw material cost i.e. sugar cane

prices remained high which resulted in aforesaid losses.

Net Fixed Assets of BHL have more than doubled from Rs 1,013

crore in FY 2005-06 to Rs 2,632 crore in FY 2008-09 mainly on

account of expansion in sugar crushing capacity.

Net worth of the company has also grown at a CAGR of around

18% from FY 2005-06 to FY 2008-09.

TOL/ TNW of BHL has reduced from 3.01 in FY 2007-08 to 1.64 in

FY 2008-09 mainly on account of repayment of secured loans

from the receipts of Qualified Institutional Placement of equity of

around Rs. 720 crore. In addition, debt-equity ratio of the

company has also improved to 1.34 in FY 2008-09 against 2.53 in

FY 2007-08.

Detailed historical financials of BHL are given in Annexure I .

2.7.6Stock Market Performance

The shares of BHL are listed on BSE and NSE. The stock was quoted at

Rs. 136.101 on BSE with its 52-week high and low of Rs. 242 and Rs. 39

respectively.

2.7.7Credit Rating

Fitch Rating has affirmed the following ratings of the various bank lines

of BHL.

Table 14: Credit Rating

1 As on April 16, 2010



MW Power Project

Particulars Rating Date of award of

Rating

National Long Term Rating

A+(ind) August 27, 2009

Cash Credit/ Fund Based Limits (Rs 14,500 mn)

A+(ind) August 27, 2009

Short Term Non-Fund based limits (Rs 3,500 mn)

F1 (ind) August 27, 2009

2.7.8Present Arrangement with Banks/Financial Institutions

The snapshot of debt availed by BHL as on December 31, 2009 is as

given below.

Table 15: Snapshot of Debt Arrangement of BHL Rs. crore

S. No.

Type of Loan SanctionedOutstanding

Secured Loan1. Non Convertible Debentures 15.00 15.00

2. Term Loans 953.83 690.64

3. Corporate Loans 1,620.00 1,460.014. Working Capital Loans 1,555.00 514.525. Other Loans 123.77 70.04

Sub Total 4,267.59 2,750.21Unsecured Loan

6. Public Deposits 0.08 0.087. Short Term Loan 100 1008. Mutual Funds 550.00 400.009. FCCB 549.22 464.80

Sub Total 1,199.30 964.88Total 5,466.89 3,715.09

The detailed arrangement of debt availed by BHL as on December 31,

2009 is provided in Annexure II.



MW Power Project

3 Project Details

3.1 Location of the Project

The Project would be located in the premises of five (5) existing sugar

units of BHL and BHSIL, located at Barkhera (district: Pilibhit),

Khambarkhera (district: Lakhimpuri Kheri), Maqsudapur (district:

Shajhanpur)`, Kundarkhi (district: Gonda), Utraula (district: Balrampur)

of Uttar Pradesh. All the sites are accessible by road and rail network.

Location map and accessibility details are given below:

Figure 3: Location Map

Table 16: Details of Accessibility of sites

Name of the Unit

Name of the nearest Railway Station

Distance from Plant (kms.)

Connectivity by Road

Barkhera Shahjahanpur 70 YesMaqsoodapur Shahjahanpur 65 YesKhambarkhera Sitapur 60 YesKundarkhi Gonda 20 YesUtraula Gonda 50 Yes


Project

Locations


MW Power Project

3.2 Key Project Inputs

3.2.1Land

Total land requirement for the Project at all sites is around 104 acres.

Entire land requirement shall be met from the surplus land available

within the premises of existing sugar units of BHL and BHSIL. The

break up of the land requirement at difference sites is as under:

Table 17: Break-up of land requirementin acres

S. No.

Plant Sites

Power Plant Land

Ash Pond Land

Total Land Requireme

nt

1Khambarkhera

16 4 20

2 Barkhera 20 4 243 Utraula 16 4 204 Kundarkhi 16 4 205 Maqsoodapur 16 4 20

BHL and BHSIL have initiated the process of transferring required

project land to BEPL. The transfer of land shall be at the notified circle

rate of land for industrial use.

3.2.2Water

Total consumptive water requirement for the Project is estimated to be

about 34920 m³/day (6984 m³ per day per site). Entire water

requirement is proposed to be met through extraction of Ground water.

Water is proposed to be drawn through 2 bore-wells at each project

site. Final approval to draw the requisite quantity of water from all the

five sites has been obtained from Central Ground Water Authority, GoI

vide their letters dated January 27, 2010 and February 4, 2010

(Enclosed in Volume II of this IM).



MW Power Project

3.2.3Construction Power

Apart from availability of co-gen plants at each site, project sites

receive power from the existing UPPCL sub-stations. As per the various

contracts awarded by BIDCO, construction power would be arranged by

the respective contractors. Contractors may also use their own DG sets

before supply of power commences from UPPCL sub-stations to support

the project construction activities.

3.3 Primary Fuel Requirement and Availability

3.3.1Coal Requirement

The Project will use domestic coal as primary fuel for power

generation. Annual primary fuel requirement works out to about 2.34

MTPA based on following parameters:

Table 18: Coal Requirement EstimationS.

No.Parameter Value Basis

1Gross Station Heat Rate (GSHR)

2675 kcal/kwh

As per the back-to-back BTG contracts awarded by BIDCO

2Gross Calorific Value (GCV)

3865 kcal/kg

Grade ‘F’ Coal

3Plant Load Factor (PLF)

85%As per prevalent operating norms in the Industry

Aggregate primary fuel requirement over an operating life of 25 years

works out to about 58.19 MT of coal.

3.3.2Coal Source & Availability:

Coal Linkage: BHL had requested Ministry of Coal (MoC) for grant of

long term coal linkage from Northern Coalfields Limited (NCL) (NCL

mines being the stated preference in the request letter) vide letter

dated 19th October, 2009 (application copy enclosed in Volume II of this



MW Power Project

IM). Standing Linkage Committee (Long-term) [SLC (LT)] met on 8th

April, 2010 to discuss the award of coal linkage to various power

projects including the Project. As informed by BHL, it has been

awarded long-term coal linkage by MoC in the aforesaid meeting (letter

from company confirming the same is presented at Annexure V of this

IM). For the purpose of financial projections, Grade F coal from

Northern Coal Fields Limited (NCL) mines near Singrauli, Madhya

Pradesh is assumed.

3.3.3Coal Transportation

For supply of domestic coal from NCL mines, under long term coal

linkage, coal would be transported through the Indian Railways rail

network to the nearest railway stations of the proposed sites of the

units. About 600 km Indian Railways network would be used to transfer

coal to two of the Project sites and around 800-900 km would be used

for the remaining Project sites and thereafter the coal would be

transported through road. The transportation details of coal are as

follows:

Table 19: Transportation details of Coal

S.No

Plant SiteNearest railway siding

Distance from CIL/

NCL Mines (in km)

Distance from Railway siding to

Plant (Km)

1 Kundarki Gonda 618 202 Utraula Gonda 618 50

3Khamberkhera Sitapur 817 60

4 MaqsudapurShahjahanpur 896 65

5 BarkheraShahjahanpur 896 70

3.3.4Coal Pricing

As Grade F coal is assumed to be received from NCL mines, fuel pricing

has been estimated accordingly in the DPR. Based on the existing



MW Power Project

notifications of CIL, the delivered cost of coal from NCL has been

estimated at Rs. 1880 per tonne as mentioned below.

Table 20: Estimation of cost of coal for the project

Long Term Linkage

Rate (Rs./ton

ne)Run of mine Price 580Royalty 84SED (Special Excise Duty) 10CDM cess 50Crushing charges 39MPGAT SVA 44Total delivered cost (w/o tax) 807VAT/ CST (2%) 16Entry tax (2%) 16Total Cost (ex-mine including tax) 839Estimated Average Transportation & Handling Cost 1041Total Landed Cost (average at 5 sites) 1880

3.4 Evacuation of Power

The power would be evacuated by using already placed 132 KV

transmission line at four out of the five plant sites. UPPCL sub-stations

are located at around 15-25 km from the respective project sites. At

Utraula, UPPCL sub-station is being built within the premises of the

existing sugar unit. The details are as given under:

Table 21: UPPCL Sub-stations

S. No. Plant SitesName of UPPCL

Sub-station

Distance from respective

site (in Km)

1Khambarkhera

Lakhimpur, Kheri 14.6

2 Bartkhera Ruppur kamalu, Pilibhit

16.6

3 Kundarki Mankapur, Gonda 15.5

4 Maqsoodapur Baragaon, Puwaya, Maqsoodapur

26.7

5 Utraula To be installed within the premises of



MW Power Project

S. No. Plant SitesName of UPPCL

Sub-station

Distance from respective

site (in Km)

the existing sugar unit

BEPL will build the evacuation system at Utraula and suitably augment

the existing transmission network, as required, at each of the

remaining 4 project sites. Cost of such augmentation has been

considered in the project cost estimates.

3.4.1Environmental Aspects

BHL has applied for the Environment Clearance to State Level Expert

Appraisal Committee (SEAC), GoUP vide letter no. BHSIL/02/SEAC/09

dated 12th November, 2009 (copy of letter enclosed in Volume II of this

IM). The approved Terms of Reference (TOR) have been received by

BHL from Directorate of Environment, Uttar Pradesh. BHL has also

carried out the Environmental Impact Assessment (EIA) study and

prepared the Environment Management Plan in line with the approved

TOR. The same have been submitted to Uttar Pradesh Pollution Control

Board (UPPCB). BHL has requested UPPCB to conduct Public hearing for

the proposed project vide letter dated April 5, 2010 (copy of letter

enclosed in Volume II of this IM). BHL has also made application to

Pollution Control Board for a No-Objection Certificate (NOC) for the

Project vide letter dated 7th December, 2009(copy of letter enclosed in

Volume II of this IM).

The Project takes into consideration establishment of the entire

essential pollution control systems / processes viz. chimney, waste

water treatment, recycling, etc. and expenditure for the same has

been included in the project cost estimates. Further, the Project sites

are free of any environmentally fragile features viz, national park,

sanctuaries, historical monuments within 25 Km from the Project sites


http://www.google.co.in/url?sa=t&source=web&ct=res&cd=1&ved=0CAYQFjAA&url=http%3A%2F%2Fen.wikipedia.org%2Fwiki%2FEnvironmental_impact_assessment&rct=j&q=EIA+Study&ei=UR2CS-aVNo64rAeRsKGdBw&usg=AFQjCNHnNTddZLZq9y3c-Lo1HKtaqJ_fQg


MW Power Project

and no encroachment of forest land or any water body is envisaged by

the proposed Project.



MW Power Project

4 Implementation Framework

4.1 Project Implementation Framework

The broad framework for implementation & subsequent operation of

the Project is depicted in the figure below:

Figure 4: Project Structure

4.2 State Support - MoU with Government of Uttar Pradesh

An MoU has been executed on 14th January, 2010 between Government

of Uttar Pradesh (GoUP) and BHL for setting the project in the state of

Uttar Pradesh at the aforesaid sites. GoUP has also assured help in

obtaining various statutory approvals/ clearances regarding the Project

like availability of water, environment clearance, recommendation to

Ministry of Coal for coal linkage, etc. GoUP has also assured in

purchasing power at the price decided/ approved by UPERC.

4.3 Technical Arrangements


BEPL450 MW

UPPCL

O&M

(In-house/Limited

Outsourcing)

BIDCO –

Project Management

BHL/

Promoter

Coal India

Limited

Lender

s

Debt

TRA

Cash Flow

PPAEquity

LIE,

LLC &

LIA

FSA

GoUP

State Support MoU


MW Power Project

4.3.1Technical Consultant

The Company has appointed M/s Mantech Technical Services Private

Limited (MTSPL) vide letter dated 25.12.2009 (Copy enclosed in

Volume II of this IM) for the preparation of Detailed Project Report

(DPR) for the Project incorporating the following:

Basis of site selection and land requirement

Compliance statutory requirements

Fuel type and availability

Suitability of technology selected

Project schedule

Project cost and cost of generation

Status of permits/ approvals/ clearances/

Drawings

Design basis and technical features of main plant equipment

Basic requirements like land, fuel, water, power evacuation,

etc

A brief profile MTSPL and past projects handled by it is given in

Annexure VI.

4.3.2Project Management Company (PMC)

The PMC contract for the Project has been awarded to Bajaj

Infrastructure Development Company (BIDCO) through a Letter of

Award dated 24/12/2009. BIDCO was incorporated in 2006 to focus and

expand group’s infrastructure and real estate initiatives. BIDCO

focuses on developing high quality infrastructure, commercial, retail,

industrial and residential projects in India. Following are some of the

projects under execution by BIDCO:

Integrated township, Warangal Highway, Andhra Pradesh

Commercial Mall, Old Hyderabad, Andhra Pradesh

Redevelopment of prime land in Bandra and Kurla, BKC,



MW Power Project

Mumbai

Following are the projects in pipeline, all in Mumbai:

Redevelopment of 42000 sq. ft, Andheri (W)

Own plot development of 30,000 sq. ft, Santacruz (E)

Greenfield development of over 2,00,000 sq. ft, King’s Circle

BIDCO has a team of qualified professionals with vast experience of

implementing power projects throughout India. BIDCO shall function as

a dedicated central resource with the overall responsibility for

formulation of concepts, systems, basic and detailed engineering,

procurement, construction and management service, erection &

testing management services, inspection, quality control, obtaining

approvals and clearances, training of manpower & project

management concepts.

Brief details of the key personnel of BIDCO are given below:

Table 22: Key personnel of BIDCO

Name DesignationQualificatio

n

Experience

(yrs)

Previous Organizati

onMr. Kailash Bihari Dubey

Director (Project)

B. Tech (Mechanical)

35 NTPC

Mr. Ripon JainVice President - Finance & Operations

B.Com., LLB(Gen), C.A.

19Keystone Reality Pvt. Ltd.

Mr. Dwarkesh Sharma

Asst. Vice President (Commercial)

B.E. (Mechanical)

13Electro Steel Castings Ltd.

Mr. Sunil Kr. OjhaGeneral Manager (F&A)

ICSI, ICWAI, CA, B.Com

18 BHSIL

Mr. Pramod Kr. Mishra

General Manager (Group Technical Services)

B.E. (Electronics)

17Yokogawa India Ltd.

Mr. Lalit Kumar Singhal

General Manager (Civil)

B.E. (Civil) 19Reliance Energy Ltd.



MW Power Project

4.3.3Major Contracts Awarded by BIDCO

BIDCO has initiated the process of project implementation by placing

orders for major project contracts as under:

A. Engineering Services

BIDCO has awarded the contract for Engineering Services to Powertech

Engineering Pvt. Limited (PEPL) vide letter dated 21/1/2010 (letter

enclosed in Volume II of this IM). The broad scope of work for PEPL

includes the following:

1. Detailed preparation of Design Basis documents;

2. Evaluation and Technical recommendation for placement of POs

by BIDCO;

3. Layout of system integration of various packages;

4. Control & Instrumentation Designs;

5. Civil and Structural Design Services.

A brief profile of PEPL and assignments executed by PEPL in the past is

enclosed in Annexure VI.

BIDCO shall also appoint an Owner’s Engineer to bring in requisite

expertise in various aspects of project supervision, management

services and overall wrapping of project packages in order to deliver

the performance as per the norms set out (stipulated as a pre-

disbursement condition).

B. BTG Contract

BIDCO has issued Letters of Awards (LOA) to the following suppliers for

the Boiler, Turbine & Generator package. BIDCO had appointed SMC

Power Limited to provide support/advisory services to ensure quality

sourcing and procurement.



MW Power Project

Table 23: Details of BTG contracts

Supplier Date of

LOA by

BIDCO

Date of

Acceptance of

LOA by the

supplier

Cost per

unit

(Rs

crore)

No.

of

Unit

s

Total

Cost

excl.

Taxes

(Rs

crore)

Boilers & Auxiliaries

ThyssenKrupp

Industries India

26/12/0

928/12/2009 116 3 348

Thermax

Limited

26/12/0

928/12/2009 120 2 240

Steam Turbine & Generator (STG)

Siemens

Limited

26/12/0

928/12/2009 45.50 5 227.5

Brief Scope of Work for ThyssenKrupp and Thermax

Design, engineering, manufacture, shop testing, packing,

forwarding, supply of boiler & its auxiliaries;

Complete erection, testing, trial run and commissioning of the

Boilers.

Supply of mandatory spare for two (2) years for trouble free

operation of the equipments

Supply of special tools for operation, maintenance, inspection

and repair of the equipments

Training of owners personnel in the operation and maintenance

of equipments/ systems

Commissioning: Commissioning of Boilers shall be done within

18-21 months from the date of LOA.



MW Power Project

Key features of the contracts awarded to ThyssenKrupp and

Thermax:

Table 24: Key features of contracts for Boiler and Auxiliaries

S.N

o

ParticularsDetails

Performance Guarantees

1. Guaranteed Boiler Efficiency

o Thermax

o Thyssenkrupp

86.0%

84.7% ± 1.0%

2. Steam output at the outlet of

main steam stop valve (MCR –

100%) while firing design

performance guarantee fuel with

feed water temperatures at

economizer inlet as per design

details (Thermax and

Thyssenkrupp)

190 TPH

(MCR)

3. Power consumption at Motor

input for continuously run

auxiliaries (in KW)

o Thermax

o Thyssenkrupp

3600

3476

Liquidated Damages (LDs)

4. Boiler efficiency - 84.7%

(Thyssenkrupp)

Boiler efficiency – 86.0%

(Thermax)

Rs 145 lacs for every

percentage fall below

guaranteed parameter

5. Auxiliary power consumption

(Thermax and Thyssenkrupp)

Rs 80,000/- per KW

increase beyond the



MW Power Project

S.N

o

ParticularsDetails

guaranteed parameter

6. Maximum continuous rating –

100%

o Thyssenkrupp

o Thermax

1% of contract value for

every 1% reduction in MCR

1% of contract value for

every 1% reduction in MCR

7. Delay in Delivery (Thermax and

Thyssenkrupp)

0.50% of contract value per

week delay of delay or part

thereof

8. Cap on LDs LDs on account of

Shortfall in

Performance:

7.5% of contract price

LDs on account of Delay

in Delivery:


Brief Scope of Work for Siemens Limited

Design, engineering, manufacture of Steam Turbine, Generator &

Auxiliaries, Station Control & Instrumentation package,

Generator Control Relay panels, Bunker Bay structure;

Complete erection, testing and commissioning of Steam &

Turbine Generators including Generator Transformer (GT),

Station Transformers (ST) and Auxiliary Transformers (UAT).

Supply of mandatory spare for two (2) years for trouble free

operation of the equipments (one set per site)

Supply of special tools and tackles required for operation,

maintenance, inspection, removal and repair of generator rotor,



MW Power Project

etc.

Training of owners personnel in the operation and maintenance

of equipments/ systems

Commissioning & Taking Over: Commissioning of Boiler shall be

done within 18 months from the date of LOA along with advance.

The taking over shall be completed with in 2 months from

schedule date of commissioning.

Performance Guarantee test to be conducted at 45 MW.

Key features of the contracts awarded to Siemens

Limited:

Table 25: Key features of contracts for Steam Turbine and Generator

S.N

o

ParticularsDetails

Performance Guarantees

1. Turbine Heat Rate 2281 Kcal/kWh

2. Auxiliary power consumption 198 kW

Liquidated Damages (LDs)

3. For every 1 Kcal/ KWh

deterioration in performance

figure of heat rate

Rs 6.5 lacs

4. For every kW increase in auxiliary

power consumption

Rs 80,000/-

5. For every M³/ hr increase in water

requirement

Rs 1.2 lac/M³

6. Reduction in gross power output To be compulsorily rectified

7. Increase in sound levels To be compulsorily rectified

8. Delay in Delivery 0.50% of contract value per

week of delay or part

thereof



MW Power Project

S.N

o

ParticularsDetails

9. Cap on LDs LDs on account of

Shortfall in

Performance:


LDs on account of Delay

in Delivery:


A brief profile of ThyssenKrupp, Thermax and Siemens along with the

details of similar assignments handled in the past is enclosed in

Annexure VI.

C. Civil Work and Structural Services

Contract for Design Services

BIDCO had awarded the contract for preliminary Architectural, Civil and

Structural Design Services to Sijcon Consultants (P) Ltd (Sijcon) vide

letter dated 11.01.2010. Sijcon’s broad scope of services included the

following:

Soil investigation work for the land

Drawings for site levelling, filling and grading based on survey

drawing

Drawings for roads, pathways, etc.

Scheme for de-watering in the plant area and drainage scheme

Design detailed engineering drawings

Preparation of machinery foundations

Quality assurance

Control room layout

Sanitary and other plumbing works

Finishing works like plastering, paintings, etc.



MW Power Project

Subsequently, for the complete project Architectural, Civil and

Structural Design Services, contract has been awarded to TPSC (India)

Pvt. Ltd which has taken over the previous contract awarded to Sijcon.

Contract for Civil Works

BIDCO has awarded the contract for Civil Works to ERA Building

Systems Ltd (ERA), K.K Construction Builders (KKCB) and Petron Civil

Engineering Pvt. Limited (Petron) vide letters dated 14.01.2010. The

broad scope of work under the Civil Works Package is as under:

Earthwork for relevant area

PCC/ RCC works of relevant area

Foundations including pilling wherever required

Masonry works

Structural steel work

Plastering, paintings, skirting, flooring, etc

Water supply and drainage

Road work, storm water drain work, etc

Post completion site clearance

Dismantling and shifting work of existing structures

A brief profile of TPSCI, ERA, KKCB and Petron along with the details of

recent projects executed is enclosed in Annexure VI.

In addition to the above, minor civil works not covered under the above

mentioned contracts will be awarded as per requirement to other

parties of repute.

4.4 Operation & Maintenance Arrangement

BHL Group has extensive experience in operating more than ten co-

generation power plants. The operation & maintenance (O&M) of the

Project would be undertaken by BEPL’s in-house O&M team. The O&M



MW Power Project

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. In order to bring expertise and state-of-the-art

technology and systems, O&M activities may also be outsourced

partially.

4.5 Power Sale Arrangements

U.P. Power Corporation Limited (UPPCL) and BHL have initialled Draft

PPA for sale of 90% of the net power generated by the Project.

The following are the key features of the Draft PPA:

4.5.1Power Sale to UPPCL

4.5.2Term of Agreement

The PPA shall become effective after receiving due approval from Uttar

Pradesh Energy Regulatory Commission (UPERC) and shall be valid for

a period of twenty five (25) years, which can be extended further on

mutually agreed terms.

4.5.3Tariff

The tariff shall be determined in accordance to the UPERC Guidelines

and shall consist of the following:

4.5.3.1 Capacity Charge

The Capacity Charge, payable by UPPCL, shall comprise of the

following:



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Interest on loan capital as per the financial package approved by

the UPERC.

Debt-equity ratio shall be considered as 70:30 with equity being

limited to 30% if equity employed is more than 30%.

Depreciation shall be calculated on Straight Line Method and at

prescribed rates. Depreciation shall be allowed up to 90% of the

historical cost of the plant.

Advance Against Depreciation, as under:

o AAD = Debt repayment amount subject to a ceiling of 1/10th

of debt minus Depreciation

Return on equity @ 15.50% p.a. If the project is completed before

the stipulated time as per Regulatory Norms, additional return of

0.5% shall be provided.

O&M Expenses (including insurance) as determined by UPERC

guidelines.

Interest on Working Capital @ short term prime lending rate of State

Bank of India, calculated on the aggregate of the following:

o Cost of coal for two months consumption;

o Cost of secondary fuel for two months;

o O&M Expenses for one month

o Maintenance spares at rates determined by UPERC

o Receivables equivalent to two months of fixed and variable

charges for sale of electricity;

o Any other component as may be approved by UPERC.

Recovery of Capacity Charges

The Capacity Charge shall be recoverable at target availability as

approved by UPERC, but is subject to a pro rata reduction if the Plant

Availability is below target availability as approved by UPERC.



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4.5.3.2 Energy Charge

The Energy Charge payable by UPPCL includes the following:

Landed cost of both Primary and Secondary fuel.

Fuel costs shall be worked out on the basis of ex-bus energy

scheduled to be sent out from the Project as per the following

formula:

o Energy Charge = Rate of Energy Charge in Rs/ kWh x

Scheduled Energy (ex-bus) for the month in kWh

corresponding to scheduled generation.

o Where, Rate of Energy Charge shall be the sum of the cost of

normative quantities of primary and secondary fuels for

delivering ex-bus one kWh of electricity in Rs./ kWh.

4.5.3.3 Tax on Income and Statutory Levies

Tax on income streams of the Company from sale of electricity shall be

computed as an expense and shall be allowed to be recovered in the

same proportion as Capacity Charge. Apart from this, Statutory taxes,

duties and levies paid by the Company in relation to generation of

electricity from the Project shall be recovered in Tariff.

4.5.4 Incentive for Timely Completion

In case the plant/ unit is commissioned before schedule as approved

by UPERC the Company shall be eligible for the incentive of an amount

equivalent to reduction of interest during construction as UPERC

guidelines.

4.5.5Billing and Payment Security Mechanism

The Company shall raise a monthly bill to UPPCL based on the monthly

joint meter reading of the main meters. For payment of bills through a

Letter of Credit on presentation, a rebate of 2% shall be allowed to



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UPPCL. If the payment is made by a mode other than the Letter of

Credit but within one month of presentation of bill, a rebate of 1% will

be allowed to UPPCL. Payments delayed by a period of more than 2

months from date of billing shall bear surcharge of 1.25% per month.

4.5.5.1 Letter of Credit

UPPCL is required to maintain an irrevocable, revolving, self-

replenishing Letter of Credit in favour of the Company throughout the

term of the PPA. The Letter of Credit shall be valid for a period of at

least 1 year and have a face value equal to one month’s billing amount

based on 85% target availability for the first three operating months

following CoD of the First Unit and thereafter equal to the average

monthly billing for last three operating months. The Letter of Credit

shall be reinstated/replenished within 5 days of drawdown.

Notwithstanding the mechanism described herein, UPPCL shall have

the right to make direct payment of any bill by cheque or otherwise.

4.5.5.2 Escrow Account

UPPCL shall establish an Escrow Account to maintain funds equivalent

to 1.25 times of the monthly Tariff amount and other payables based

on 85% target availability for the purpose of guaranteeing the

reinstatement of the Letter of Credit on a monthly basis as and when

the same becomes due and payable. The Company shall have a

recourse to the Escrow Account at all times during the term of the PPA.

4.5.6Merchant Sale

BEPL proposes to sell balance power, i.e. around 45 MW project

capacity on merchant basis. The commercial aspects of saleability of

merchant power are discussed in Chapter 5.



MW Power Project

4.6 Power Evacuation Arrangement

The power would be evacuated by using existing 132 KV transmission

line at four out of the five plant sites. UPPCL sub-stations are located at

around 15-25 km from the respective project sites. At Utraula, UPPCL

sub-station is being built within the premises of the existing sugar unit.

BEPL will build the evacuation system at Utraula and suitably augment

the existing transmission network at each of the remaining 4 project

sites.

4.7 Schedule of Implementation

As per the LOA given to BIDCO by BHL (and corresponding back to

back contracts awarded by BIDCO to project contractors) all the five

(5) units of the Project are expected to be completed within 22 months

of award of LoA to BIDCO. Indicative timelines for achievement of key

project implementation milestones are as follows:

Table 26: Schedule of Implementation

Milestone/Activity Timeline

Letter of Award to BIDCO24th December, 2009

Coal Linkage Meeting 8th April, 2010Finalization of Draft PPA with UPPCL

April, 2010

Signing of Final PPA with UPPCL July, 2010Completion of Land Transfer July, 2010Financial Closure July, 2010Environment Clearance by MoEF, GoI

September, 2010

Commencement of Commercial operations of Project

1st November, 2011

The detailed time schedule for implementation of the Project is given in

Annexure III.



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5 Industry Scenario

5.1 Power Sector Scenario in India: A Perspective

The power sector provides one of the most important inputs for the

development of a country and availability of reliable and inexpensive

power is critical for its sustainable economic development. To sustain

GDP growth rate of around 9-10 %, it is imperative that the power

sector also grows at the same rate.

The Indian power sector has grown manifold in size and capacity since

independence. Power installed generating capacity has increased from

1,362 MW in 1947 to 1,56,092 MW as on 31st December, 2009. Even

after the considerable growth in the power sector infrastructure and

the supply of electricity, many parts of the country continue to face

severe power shortages as consumption by commercial and industrial

consumers has been increasing at much faster rate than electricity

supply. The following chart depicts growth in the installed generation

capacity since 2003.

Figure 5: Installed Generation Capacity



MW Power Project

Growth in Installed Generation Capacity

020000400006000080000

100000120000140000160000

2003 2004 2005 2006 2007 2008 2009

Year

In M

W

RES

Hydro

Nuclear

Thermal

(Source CEA)5.1.1Historical Demand-Supply scenario

The annual per capita consumption of electricity in India has increased

by CAGR of about 4% from FY 2003 (566.7 Kwh) to FY 2008 (704.2

Kwh). World’s average per capita consumption stands at 2600 Kwh as

on 31st October, 2008. The low per capita consumption is a result of

the low penetration of electricity at the household level especially in

rural areas.

Figure 6: Per Capita Consumption


Per Capita Consumption

0

100

200

300

400

500

600

700

800

2002-03 2003-04 2004-05 2005-06 2006-07 2007-08

Per Capita Consumption(Kwh) (As per U.Nmethodology)


MW Power Project

(Source CEA)

Though there has been substantial growth in power sector

infrastructure in India over the last few years, the power supply

position in still characterized by shortages, both in terms of supply

during peak period and the overall electricity supply. Many parts of the

country continue to face severe power shortages. In fact, power supply

position in the country has worsened over the last few years with

growth in power demand outstripping new capacity addition with peak

power deficit being worst at 16.6% in 2007-08. The energy deficit at

the national level has increased from 7.1% in 2003-04 to 11% in 2008-

09.

Table 27: Year Wise Power Demand Supply ScenarioYear Energy (MU) Peak (MW)

Requirement

Availability

% Shorta

geDeman

d Met

% Shorta

ge2002-03

545,674 497,589 8.8 81,492 71,547 12.20

2003-04

559,264 519,398 7.1 84,574 75,066 11.20

2004- 591,373 548,115 7.3 87,906 77,652 11.70



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Year Energy (MU) Peak (MW)

Requirement

Availability

% Shorta

geDeman

d Met

% Shorta

ge052005-06

631,554 578,819 8.4 93,255 81,792 12.30

2006-07

690,587 624,495 9.6 100,715 86,818 13.80

2007-08

739,345 666,007 9.9 108,866 90,793 16.60

2008-09

774,324 689,021 11 109,809 96,685 12.00

Apr 09-Nov 09

549,257 495,821 9.7 116,281 101,60

912.60

(Source CEA)

The power deficit scenario is particularly worse in the northern and

western regions, two of the most industrialized regions of the country.

Peak power deficit in the northern and western regions were 10.7%

and 19% respectively in 2009. The reasons for power shortage are:-

Low Plant Load Factor of some of the thermal generating units,

mostly in State sector.

High transmission and distribution losses.

Inadequate sub-transmission and distribution network in some

States.

Inadequate inter regional transmission capacity, for supplying

power from surplus regions to deficit regions.

Poor financial position of State utilities rendering it difficult for

them to raise the resources necessary for making required

investments to create adequate generation, transmission and

distribution system.

The table below shows the base load and peak load deficit for the top

five states on the basis of power consumption.



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Table 28: Power Deficit vs Highest Power Consumption in India

State

Base Load Deficit (%) Peak Load Deficit (%)

November

2009

April2009

April

2008

November

2009

April

2009

April 2008

Maharashtra 16.8 21.7 21.4 25.1 23.3 28.2Gujarat 8.1 3.3 23.1 9.2 5.5 28.5Tamil Nadu 6.8 8.4 4.2 4.4 9.8 8.5Andhra Pradesh

3.511.8 4.6 4.2 10.1 12.7

Uttar Pradesh

23.110.8 15.7 24.6 21.9 25

(Source: CRISIL Research)

As seen above UP is amongst the top five states power deficit states of

the country.

5.1.2Relatively Higher Aggregate Technical and Commercial

(AT&C) Losses

The key factor for sustainability of the power sector is to keep the

Aggregate Technical and Commercial (AT&C) losses at low levels, as

against the current high level of around 28%. To address this issue, GoI

started an initiative named as Accelerated Power Development and

Reform Programme (APDRP) to leverage distribution reforms in the

states. Priority is given to the states that have committed themselves

to a time-bound programme of reforms as elaborated in the

Memorandum of Understanding and Memorandum of Agreement with

the Central Government, and are progressing on those commitments.

GOI aims to bring AT&C losses down to 15% by the end of the 11th five

year plan.

Table 29: AT&C losses



MW Power Project

AT&C Loss (%) for SEBs, PDs & Discoms for FY 2002 – 2007

Region2001-

022002-

032003-

042004-

052005-

062006-

07Eastern 47.34 44.37 44.81 43.16 41.8 38.21North Eastern 40.65 44.1 40.56 39.01 35.92 41.33Northern 46.01 37.85 40.14 41.54 40.44 37.18Southern 27.63 28.05 22.71 24.18 23.93 22.69Western 39.6 40.45 37.55 35.19 38.29 37.37

(Source CRISIL Research)

Northern (19.2%) and Eastern (19.3%) region have shown substantial

reduction in these losses during the five year period while other

regions have made only marginal improvements.

5.2 Region wise Demand Supply Scenario

Details of the region wise demand-supply scenario in India are given

herein.

Table 30: Region Wise Demand-Supply Scenario(MUs)

2009-10 (till Nov’09) 2008-09Region

Requirement

Availability

Deficit (%)

Requirement

Availability

Deficit (%)

Northern

173719 152708 12.1 224218 199928 10.8

Western

166766 146408 12.2 254486 213724 16

Southern

143454 134693 6.1 204086 188865 7.5

Eastern

58949 56430 4.3 82127 78370 4.6

NE Region

6369 5582 12.4 9407 8134 13.5

All India

549257 495821 9.7 774324 689021 11

(Source: CEA)

5.2.1Demand-Supply Scenario in Northern Region

The Northern region experienced an energy shortage of 10.8% and a

peak power deficit of 10.7% during 2008-09. Details of the prevailing



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power situation in Northern region states during April 2008 to March

2009 are provided in the table below:

Table 31: Demand Supply Scenario in Northern Region States

Region Energy Requirement (MU) Peak Load (MW)Requirement

Available

Deficit

Demand

MetDeficit

Delhi 22,249 22,123 0.6% 4,036 4,034 0.0%Haryana

28,791 26,331 8.5% 5,511 4,79113.1

%Himachal Pradesh

6,261 6,246 0.2% 1,055 1,014 3.9%

Jammu & Kashmir

11,148 8,564 23.2% 2,120 1,40533.7

%Punjab

41,297 36,900 10.6% 8,690 7,30915.9

%Rajasthan 37,306 36,898 1.1% 6,303 6,101 3.2%U.P.

68,003 53,796 20.9% 10,587 8,24822.1

%Uttaranchal 7,762 7,669 1.2% 1,267 1,267 0.0%Chandigarh 1,401 1,401 0.0% 279 279 0.0%Northern region

224,218199,92

810.8

%33,03

429,5

0410.7

%(Source CEA)

The worst affected states in the Northern region are Uttar Pradesh and

Jammu & Kashmir with severe energy and peaking power deficit.

5.2.2Projected Power Requirement in Northern Region

The projected power requirement in the aforementioned states is given

below:

Table 32: Projected Power Requirement in Northern Region

StateEnergy Requirement (MU)

Peak Load (MW)

2011-12 2016-17 2011-12 2016-17Delhi 36,293 52,762 6,092 8,729Haryana 38,417 54,305 6,839 9,375Himachal Pradesh

9,504 13,136 1,611 2,194

Jammu & Kashmir

11,202 15,272 2,063 2,790



MW Power Project

StateEnergy Requirement (MU)

Peak Load (MW)

2011-12 2016-17 2011-12 2016-17Punjab 60,489 82,572 11,000 14,441Rajasthan 48,916 67,767 8,482 11,404Uttar Pradesh 79,268 110,665 13,947 19,623Uttaranchal 8,445 11,668 1,533 2,085Chandigarh 2,308 3,367 420 602Northern region

294,841 411,513 48,137 66,583

(Source: 17th Electricity Power Survey (EPS) of CEA)

There would be projected shortage of about 14,286 MW power by the

year 2011-12 pan India. The major shortfall would be evident

especially in Northern region.

5.3 Analysis of Present Capacity

Electricity being a concurrent subject, both the Centre and the States

has to play a decisive role in this sector. While the Centre has a

significant share in the transmission segment, the distribution segment

is in the domain of the States. However, for creation of generation and

transmission capacity, in line with the growing needs of economy, all

the sectors namely Central, State and Private need to play a vital role.

The ownership mix of the installed generation capacity in the country

as on December 31, 2009 is as depicted below:

Table 33: Ownership Mix of the Installed Generation Capacity(in MW)

Secto

r

Hydr

o Thermal

Nucle

ar R.E.S Total

Coal Gas Diesel Total(MNRE)

State2708

74405

54046 603

48703

0 26247841

4Central

85653042

56702 0

37127

4120 04981

3Private

1233 7126 6308 5971403

10 12602

27866



MW Power Project

Total3688

58160

61705

61200

99861

4120 152251560

92(Source: CEA)

As a matter of legacy, the central and state sectors together constitute

over 86% of the installed capacity. However, with opening up of sector

in 1990s with further reforms pursuant to the Electricity Act, 2003, the

share of private-sector in the ownership-mix for the generation sector

has improved substantially. The graph below shows the growth in

private players’ participation in power sector from 1993 onwards:

Figure 7: Growth in Private Participation in Power Sector

(Source: Central Electricity Authority, CRISIL Research)

There has been no significant change in the fuel mix over the past 11

years. The thermal-hydel mix changed from 75:25 in 1997-98 to 72:28

in 2007-08. The share of nuclear power plants in the overall installed

capacity remains low.

Figure 8: Installed Capacity by Type of Fuel



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(Source: Central Electricity Authority, CRISIL Research)

5.4 Capacity Addition Program

Assuming 8% and 9% GDP growth rate scenario with 1:1 elasticity

between economic growth and energy intensity, the following

projections have been set forth by the Ministry of Power in its

Integrated Energy Policy.

Figure 9: Long Term Capacity Addition Projections

(Source: Central Electricity Authority)

Government of India has formulated an ambitious capacity addition

programme over the 11th and 12th plan periods in order to meet its

“Power for all” objective by 2012. GOI, under its ‘Power For All by

2012’ mission, plans to increase per capita power consumption to 1000

KW by 2012. Under Rajiv Gandhi Grameen Vidhyutikaran Yojana,

Ministry of Power is planning to achieve 100% rural electrification. This



MW Power Project

provides a tremendous investment opportunity in the Indian power

generation market for both public and private sector. Government is

also emphasizing on use of renewable sources of energy generation,

like solar power, biomass, hydro power, biogas and wind power.

Moreover, parallel focus is being given on demand side management

with initiatives like energy conservation and energy efficiency and

supply side management with initiatives like reduction in Transmission

& Distribution (T&D) losses, improvement in transmission and sub-

transmission networks.

11th five year plan (April 2007- March 2012) for power aims at adding

78,700 MW. However, the actual capacity addition in 2008-09 is about

3,453.7 MW against the target of 11,061.2 MW for the period2. The

capacity additions are significantly lower than the projected

requirements and the current power deficit situation is likely to

continue in medium term. The following have been identified as the

main reasons for repeated failures in achievement of the targets by

thermal power plants:

Delay in land acquisition;

Delay in water linkage;

Environmental clearances;

Road and Railway connectivity for approach;

Delay in award of coal linkage/gas linkage by Government;

Financial problems related to the health of SEBs as also delay in

achieving financial closures of the project.

The chart below shows the capacity deficits in comparison to target

levels in different five year plans. In the coming times, manifold

increase is expected in power demand due to high economic growth

and hence it is imperative to ensure that the targets are met.

2 (Source: Ministry of Power)



MW Power Project

Figure 10: Plan Wise Capacity Additions

(Source: CEA)

As against the 14,507 MW capacity addition planned by the

government in 2009-10, only 6250 MW has been setup till 31st

December 2009 (CRISIL Research).

5.4.1Capacity Additions Required in Uttar Pradesh (UP)

Capacity additions required to meet the Peak and Energy deficit in the

UP is given in the table below:

Table 34 : Capacity Additions Required in Uttar Pradesh

S.No.

Details

Unit (MW)Starting year of XI five year plan(2007-08)

End Year of

XI five year plan(2011-12)

End year of XII five year plan(2016-17)

1Planned capacity addition during XI-th plan (MW)

NA 3600 4640*

2Total capacity available during the year (MW)

9335 12935 17575

3Peak power availability (MW)

6578 9054 12478

4Peak power demand(MW)

10193 13947 19623



MW Power Project

S.No.

Details

Unit (MW)Starting year of XI five year plan(2007-08)

End Year of

XI five year plan(2011-12)

End year of XII five year plan(2016-17)

5Power deficit (MW)(+ for surplus, - for deficit)

-3615 -4893 -7145

6Additional installed Capacity required to offset the deficit (MW)

5092 6850 10003

*Assuming PAF of 71%

(Source: www.cea.nic.in 1.Capacity addition target during 11th plan set by planning commission and 2. International conclave on key inputs for accelerated development of Indian power sector for 12th plan and beyond)

Installed capacity required to offset the power deficit in U.P. is about

6,850 MW by the year 2011-12 and by the year 2016-17 it is about

10,003 MW.

5.5 Power Trading Scenario

5.5.1Trading Volume & Power Traders

The merchant power generated is sold in the open market via bilateral

transactions or through power exchanges.

Figure 11: Historical Trend of Merchant Power Transaction


http://www.cea.nic.in/


MW Power Project

(Source: CERC)

Trading of power has increased substantially over the last few years

with the emergence of several power traders. Power trading volumes

have increased from 11,028.96 MU in 2003-04 to 20,964.77 MU in

2007-08 depicting a CAGR of ~17.4%. However, the total power traded

in the country is still a meagre 3.57% of the total power generation

(2008-09) but is expected to reach 10% of total energy generation by

2012 maintaining double digit CAGR. PTC India Ltd was the first entrant

in the sector and is today the largest power trading entity in the

country with over 45.57% market share in 2007-08. Few key power

trading entities in the country and their respective market share are as

follows:

Table 35: Power Trading Entities and Respective Market Shares in 2007-08S.No Name Market Share

1. PTC India Ltd 45.57%

2. Adani Exports Ltd 6.31%

3. JSW Power Trading Co. Ltd 7.05%

4. Lanco Electric Utility Ltd 12.4%

5. NTPC Vidyut Vyapar Nigam Ltd 15.86%

6. Tata Power Trading Co. Ltd 8.02%

7. Reliance Energy Trading Ltd 3.70%

5.5.2Price of Traded Power

The weighted average price of traded power has also increased

substantially which is reflective of the widening demand-supply

mismatch and huge seasonal variations in power demand. The

weighted average price of traded power has increased from Rs 4.52

per Kwh in 2007-08 to Rs 7.31 per Kwh in 2008-09. A detailed analysis

of the volume of power traded at various price levels over the last four

years is presented in the figure below.



MW Power Project

Figure 12: Price Analysis of Traded Power

(Source: CERC)

5.6 Regulatory Scenario

5.6.1The Electricity Act, 2003

The Act moves towards creating a market-based regime in the power

sector. The Act seeks to consolidate, update and rationalize laws

related to generation, transmission, distribution, trading and use of

power. It focuses on:

Creating competition in the industry

Protecting consumer interests

Ensuring supply of electricity to all areas

Rationalizing tariff and thus lowering the cross-subsidization

levels

Encouraging autonomous regulation with the separation of

policy, regulatory and operational aspects



MW Power Project

5.6.2National Tariff Policy

In compliance with the provisions under the Electricity Act, 2003, GoI

notified the Tariff Policy on January 06, 2006. The policy deals with

various parameters with respect to fixation of tariffs, like providing

adequate return on investment to the power generator and ensuring

reasonable user charges for the customers. The policy moots the

procurement of power separately for base and peak load requirements

and introduction of differential tariffs for peak and off-peak hours, for

better load management.

The MoP notified the Guidelines for Determination of Tariff by Bidding

Process for Procurement of Power by Distribution Licensees

(Competitive Bidding Guidelines) on 19th January 2005, under the

provisions of Section 63 of EA03.

5.7 Conclusion

Given the prevalent demand supply deficit scenario and projected

growth in power requirement, huge addition in generation capacity is

required in the country over the coming decade. Consequently, there

exists an attractive business and market opportunity especially in the

northern & western regions of the country. As discussed earlier, 90% of

the net energy generated from the Project will be delivered to the state

of Uttar Pradesh, under a long term PPA with UPPCL. Uttar Pradesh

(U.P.) is the largest power consumer of Northern India with the highest

energy deficit among all north Indian states. As a result of the

continuing power deficit situation in the state, price of power sold in

the short-term market has also risen sharply. Based on the Annual

Revenue Requirements (ARR) filed by the U.P. distribution utilities to

UPERC for tariff fixation for FY 2009-10, the price of short term power

approved is Rs. 7.70/kWh. Recent PPAs for long-term sale of power in

U.P. have also followed the increase in price of power and have been in



MW Power Project

excess of Rs. 3/KWh.

Additionally, power procured from electricity surplus states of eastern

and north-eastern region is being sold at higher tariff due to additional

wheeling charges and associated transmission losses involved.

The proposed Project is one of the few power projects expected to be

commissioned in the state of Uttar Pradesh in the 11th five year plan

period. Given the acute shortage of power in U.P., there is low risk

foreseen in the off-take of power from the Project.



MW Power Project

6 Project Cost and Means of Financing

6.1 Components of Project Cost

The Project is estimated to be set up at an aggregate cost of Rs. 2,320

crore. This includes hard cost of Rs. 1,878.72 crore and soft cost of Rs.

441.28 crore. The hard cost estimates are as per the DPR prepared by

Mantech Technical Services Private Limited and are inclusive of all

indirect taxes as may be applicable for the Project. A breakup of the

Project cost estimate is provided in the Table below:

Table 36: Estimation of Cost of ProjectRs. crore

Particulars Amount

Land and Site Development 57.50Civil Works 345.00BTG 949.53BoP – Mechanical 321.91BoP – Electrical 97.87Control and Instrumentation 39.56Augmentation of Evacuation System 44.75Initial Spares 22.60Total Hard Cost 1878.72Project Monitoring, Supervision and Quality Control 82.00Trial & Pre-commissioning Expenses 50.00Pre-operative Expenditure 29.36Interest During Construction Period 174.86Margin Money for Working Capital 48.70Contingency 56.36Total Soft Cost 441.28Total Cost 2320.00

Based on the estimated Project cost indicated above, the cost per MW

of the Project works out to Rs 5.16 crore/MW. Capital cost of the

proposed Project is comparable with other coal based power projects

being currently developed using similar technology and configuration.



MW Power Project

Rural Electrification Corporation has sanctioned loan for a 2 x 50 MW

Brownfield thermal power project using similar technology and

equipment configuration. Per MW cost in the aforesaid project is

estimated at around Rs. 5.33 crore which is comparable to the

proposed Project.

6.1.1Cost of Land and Site Development

Aggregate land requirement for the Project is about 104 acres. The

total cost of the land is estimated at around Rs. 12.50 Crores for the

Project at the rate ranging from Rs. 6 Lacs to Rs. 20 Lacs per Acre.

There is no Rehabilitation and Resettlement (R&R) involved at the

Proposed Project Site. The cost of Site Development has been

estimated at Rs. 45.00 crores.

6.1.2Cost of Civil Works

Cost of civil works includes expenditure on all plant civil work including

foundation, structures, main plant and ancillary buildings, site civil

work including piling, chimney including ladder, ash dyke, raw water

reservoir, de-watering system, essential housing, security and store

buildings, roads and drains, boundary walls, watch towers and other

necessary infrastructures.

6.1.3BTG Cost

BTG package has been awarded to ThyssenKrupp Industries India (for 3

Boilers) for Rs 348 crore, Thermax Limited (for 2 Boilers) for Rs 240

crore and Siemens Limited (for all 5 Steam Turbine & Generator

package) for Rs 227.50 crore on fixed cost basis exclusive of taxes and

duties. Aggregate cost of BTG package after applying relevant taxes

and duties of works out to Rs. 949.53 Crore. The company is required

to pay the contract price in INR only.



MW Power Project

6.1.4Balance of Plant (BOP) Cost

BoP is divided under Mechanical and Electrical BoP. BoP Mechanical

includes expenditure on all piping, cooling towers, DM Plant, coal and

ash handling plant, air-conditioning, fire fighting & protection system,

Effluent Treatment Plant, EOT cranes, etc. BoP Electrical includes cost

of all panels, transformers, switch gears, cables, switchyard, etc. The

cost of BoP Mechanical is estimated at Rs. 321.91 crores and BoP

Electrical at Rs. 97.87 crores.

6.1.5Control and Instrumentation

Control and Instrumentation comprises of distributed control system

for centralized control and monitoring of the plant parameters, BoP

instrumentation, cable laying , steam and water analysis system,

erection and commissioning of all the C&I systems.

6.1.6Augmentation of Evacuation System

This cost includes strengthening of transmission lines and addition of

Bay equipment with associated civil work at the respective UPPCL Sub-

stations, as required.

6.1.7 Initial Spares

The cost of initial spares for various plant and machinery equipment is

estimated at Rs. 22.60 crores.

6.1.8Project Monitoring, Supervision and Quality Control

The total cost towards project monitoring, supervision and quality

control is estimated at Rs. 82 crores. This includes the payment to the

Project Management Company for co-ordination and appointment of

sub-consultants with requisite expertise to provide civil, structural

design and architectural services, Soil related studies, Seismic study

and other civil work related study and investigations, Owner’s



MW Power Project

Engineering services including integration and inter-facing of package,

critical piping routing etc., complete plant/design engineering,

including complete procurement and logistics management, project

supervision, monitoring, co-ordination with owner’s engineers,

architects, quality control services, legal advisors and other

professional service providers for and in relation to plant and project

execution. Project monitoring and supervision will ensure timely

implementation of project, synchronisation of plant in co-ordination

with Equipment Suppliers and other agencies while adhering to quality

in erection and commissioning in order to achieve successful trial as

per agreed performance parameters.

6.1.9Trial and Pre-commissioning Expenses

The trial and pre-commissioning expenses are estimated at Rs. 50

crores to be incurred mainly towards start-up fuel and coal to be used

while undertaking the trial operations for various units.

6.1.10 Contingency

To provide for any unforeseen expenditures and variations in the

estimates of costs on account of change in contract scope, escalation

in cost of key inputs like steel and cement etc., a contingency of 3% of

the Total Hard Cost has been assumed at Rs. 56.36 crores.

6.1.11 Pre-Operative Expenses

Pre-operative Expenses are estimated to be Rs. 29.36 crore for the

Project which consists of preliminary expenses including establishment

charges, fees to be paid towards technical studies conducted by

various consultants, legal expenses, manpower training, overheads

and other administrative expenses.



MW Power Project

6.1.12 Interest during Construction Period

The debt drawdown schedule has been made in accordance to the

expenditure phasing assumptions enumerated in Annexure IV. The

interest rate considered for the construction period is 11.5% per

annum. The Interest during Construction (IDC) for the Project works out

to be Rs. 174.85 crore.

6.1.13 Margin Money

The margin money has been estimated at 25% of projected net

working capital requirement of Project in the first full year of operation.

For the purpose of estimates, the current assets comprising of

receivables of 1.5 month, primary fuel stock of 1.5 month, secondary

fuel stock of 1.5 month, O&M expenses of 1 month and spares

requirement equal to 20% of the O&M expenses has been assumed.

The provision for margin money for working capital has been made at

Rs. 48.70 crore for the Project.

6.2 Means of Financing

The cost of the Project is estimated at Rs. 2320 crore and is proposed

to be financed with debt and equity in ratio of 75:25. The proposed

components of financing are as under:

Table 37: Components of Financing

ParticularsRs.

Crore%

Promoter Contribution 580.00 25%Rupee Term Loan 1740.00 75%

Total 2320.00 100

%

6.2.1Promoter Equity Contribution

The equity requirement for the Project is Rs. 580 crore and is proposed

to be funded by internal accruals of BHL and through equity

contribution from Promoter Group. Out of the total equity requirement

for the Project, 60% of total equity requirement would be brought



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upfront prior to the initial drawdown of the Rupee Term Loan.

6.2.2Rupee Term Loan

Rupee Term Loan for the Project will be sourced from various domestic

banks and Financial Institutions (FIs) and the indicative terms for the

proposed debt are mentioned in Chapter 11. Rupee Term Loan is

expected to be contracted for a door-to-door tenor of up to 12 years.

7 Financial Projections – Snapshot

The key assumptions underlying the profitability projections for the

Project are detailed in Annexure IV. Based on these assumptions key

financial parameters are given below. Detailed Profit & Loss Account,

Cash Flow Statement, Balance Sheet and DSCR Calculations are given

in Annexure VII.

7.1 Project Financials

Table 38: Snapshot of financial parameters of the Project (Rs. Crores)

FY Ending March 31,

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

No. of months of operation

5 12 12 12 12 12 12 12 12 12 12

Capacity(MW)

450 450 450 450 450 450 450 450 450 450 450

PLF 80% 85% 85% 85% 85% 85% 85% 85% 85% 85% 85%

Net Generation (MU's)

1182

.6

3015

.6

3015

.6

3015

.6

3015

.6

3015

.6

3015

.6

3015

.6

3015

.6

3015

.6

3015

.6

Total Revenue

393.

5

982.

5

980.

7

979.

5

978.

8

978.

8

979.

5

980.

8

982.

8

985.

5

990.

2

Total operating cost

202.

8

528.

2

543.

5

559.

2

575.

5

592.

4

609.

7

627.

7

646.

3

665.

5

685.

4

PBDIT190.

7

454.

3

437.

2

420.

2

403.

3

386.

5

369.

7

353.

1

336.

5

320.

0

304.

8



MW Power Project

FY Ending March 31,

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Total Interest 87.9207.

3

187.

4

167.

5

147.

7

127.

8

108.

088.2 68.4 48.6 28.5

PBDT102.

8

247.

0

249.

8

252.

7

255.

6

258.

6

261.

7

264.

9

268.

1

271.

4

276.

3

Depreciation 45.5109.

2

109.

2

109.

2

109.

2

109.

2

109.

2

109.

2

109.

2

109.

2

109.

2

PBT 57.3137.

8

140.

6

143.

5

146.

4

149.

4

152.

5

155.

6

158.

8

162.

2

167.

1

Total Tax 19.0 45.8 46.7 47.7 48.6 49.6 50.6 51.7 52.8 53.9 55.5

PAT 38.3 92.0 93.9 95.8 97.8 99.8101.

8

103.

9

106.

1

108.

3

111.

6

PBDIT/Total Revenue

48.5

%

46.2

%

44.6

%

42.9

%

41.2

%

39.5

%

37.7

%

36.0

%

34.2

%

32.5

%

30.8

%

PBT/Total Revenue

14.6

%

14.0

%

14.3

%

14.6

%

15.0

%

15.3

%

15.6

%

15.9

%

16.2

%

16.5

%

16.9

%

PAT /Total Revenue

9.7% 9.4% 9.6% 9.8%10.0

%

10.2

%

10.4

%

10.6

%

10.8

%

11.0

%

11.3

%

Annual DSCR 2.12 1.35 1.38 1.41 1.44 1.48 1.53 1.58 1.64 1.72 1.66

Average DSCR

1.51

Minimum DSCR

1.35

Project IRR15.0

%

From the above financial projections it may be observed that the

Project is financially viable with a Project IRR of around 15.0%. It may

also be noted that the average DSCR for the Project debt is 1.51 while

minimum DSCR is 1.35. The DSCR levels of the Project are satisfactory.

7.2 Sensitivity Analysis

As discussed in Chapter 4, BHL has initialled a Draft PPA with UPPCL for



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sale of 90% of the net saleable power from the Project. Tariff as per

the PPA shall be determined on cost-plus basis i.e. all

proportionate operating and financing charges shall be

recovered from UPPCL. Any increase in the operating/financing

charges will be recovered through a corresponding increase in

tariff.

However, the impact of variation in key operating assumptions on

DSCR/PIRR has been studied by assuming that the adverse deviations

in operating/financing charges will not be recovered through an

increase in tariff. The results of the sensitivity analysis are given

below:

Table 39: Sensitivity AnalysisAverage

DSCRMinimum DSCR

PIRR

Base Case 1.51 1.35 15.00%

Case 1: Reduction in PLF by 5%

1.42 1.28 13.82%

Case 2: Increase in O&M Cost by 10%

1.49 1.34 14.63%

Case 3: Increase in Station Heat Rate (SHR) by 100 Kcal/Kwh

1.45 1.31 14.17%

Case 4: Increase in Interest Rate by 1% p.a.

1.46 1.29 15.00%

As seen above, the Project is able to withstand various adverse

deviations in the operating assumptions and its debt servicing capacity

is satisfactory.



MW Power Project

8 Status of Approvals and Clearances

Status of some of the major statutory/ regulatory approvals and

clearances for the Project are as under:

Table 40: Status of Approvals and ClearancesSr. No.

Type Of Clearance/ Approval

Authority/Entity Remarks

1. Land Acquisition and Availability

BHL/BHSIL Project is being set up on the surplus land available in the premises of existing sugar plants of BHL and its subsidiary, BHSIL. BEPL has already demarcated around 104 acres of land required at various project sites. BHL/BHSIL shall transfer the demarcated parcels of land to BEPL at the state notified circle rate for industrial land. BHL/BHSIL are in the process of obtaining requisite approvals/NoCs from the lenders. All NoCs shall be obtained and land shall be transferred in the name of BEPL before seeking first disbursement from the Lenders.

2. Pollution Control Board Clearance

Uttar Pradesh Pollution Control Board (UPPCB)

BHL has already applied for NoC from UPPCB vide letter dated 7th December, 2009.

3. Environment Clearance

State Level Expert Appraisal Committee

BHL has applied for the Environment Clearance to State Level Expert Appraisal Committee (SEAC), GoUP vide letter no. BHSIL/02/SEAC/09 dated 12th



MW Power Project

Sr. No.



November, 2009. The Terms of Reference (TOR) have been received. EIA study and EMP have been submitted to UPPCB and request for public hearing has been made vide letter dated 5.04.2010.

4. Coal Linkage MoC As informed by the Company, BHL understands that it has been granted long term coal linkage for the project vide SLC-LT meeting held on April 08, 2010.

5. Defence Clearance

Ministry of Defence (MoD)

The power plants at respective sites do not have any defence establishment/ land with in 15 kilometres of radius. Hence, defence clearance is not required from MoD.

6. Civil Aviation Clearance for Chimney Height

Airport Authority of India (AAI)

BHL has applied for a ‘No Objection Certificate’ from AAI vide letter dated March 30, 2010.

7. Rehabilitation and Resettlement (R&R)

GoUP The plant is being set up on the land available in the premises of existing sugar plants of BHL and its subsidiary, BHSIL. Hence no R&R is required.

8. Forest Clearance Ministry of Environment and Forest (MoEF), Government of India/State

No Forest land is involved in the development of Project. Hence Forest Clearance is not required.



MW Power Project

Sr. No.



Government9. Water Linkage Central Ground

Water Authority (CWGA), GoI/ CWGB, Northern region, Lucknow

For the total requirement of 34920 m³/day (6984 m³/ day per site) water per annum, final approval from has been obtained for the drawl of the required ground water vide letter dated 4.02.2010.



MW Power Project

9 Risk Analysis

9.1 Risk Analysis – Allocation & Mitigation

Table 41: Risk AnalysisRisk Factor Allocated

ToProposed Mitigation Mechanism

Management RiskImplementation Capability & Experience

BEPL/ BHL The group is the largest sugar and ethanol manufacturer in India and has displayed excellent project executions skills in the past. The group has commissioned 11 Greenfield and integrated sugar plants with aggregate capacity of 1,06,000 TCD. The group has commissioned most of these projects much ahead of the schedules and created a benchmark in the industry. The group has also implemented various co-generation power projects at its existing sugar manufacturing facilities. The group is already operating co-gen power plants aggregating a capacity of around 428 MW. The group has mobilized an experienced and reliable team of personnel with requisite skills. The Company would be able to leverage the vast experience of the group in the execution of various larger size projects.

Pre-Completion RisksConstruction Risk

BEPL / BIDCO/ BTG Contractor/ Other Contractors

BHL has retained BIDCO as the overall co-ordinator for the implementation of the Project. BIDCO has awarded contracts to ThyssenKrupp Industries India (for 3 Boilers), Thermax Limited (for 2 Boilers) and Siemens Limited (for all 5 Steam Turbine & Generator package) on fixed price and fixed time basis. The contracts provide for adequate liquidated damages (LD)



MW Power Project

Risk Factor Allocated To

Proposed Mitigation Mechanism

provisions in case of delay in implementation and for plant’s various performance parameters. Contracts for civil works have also been awarded to reputed contractors with similar LD provisions.

The group has implemented various small size co-gen power projects of aggregate capacity of around 428 MW power project.

BIDCO shall also appoint an Owner’s Engineer to bring in requisite expertise in various aspects of project supervision, management services and overall wrapping of project packages in order to deliver the performance as per the norms set out.

The Project is in advanced stage of development with a balance gestation period of around 17 months.

Sponsor Risk BHL/Group Promoters

An amount of Rs. 438 crores has already been spent by BHL and Promoter Group on the Project, out of total equity requirement of Rs. 580 crore. BHL and Group Promoters have sufficient resources to contribute the requisite equity for the Project.

Land Availability BEPL The plant is being set up on the surplus land available in the premises of BHL’s existing sugar plants and its subsidiary, BHSIL. The Company has already identified land required for the Project and BHL and BHSIL have initiated the process of transfer/assignment of land and obtaining NoCs from various lenders.

Cost and Time Over-run

Contractors/ BEPL/ BHL

The group has extensive experience of successfully implementing large projects in



MW Power Project



the past. Further, BIDCO has awarded BTG contract to ThyssenKrupp Industries India (for 3 Boilers), Thermax Limited (for 2 Boilers) and Siemens Limited (for all 5 Steam Turbine & Generator package) on fixed price and fixed time basis. The contracts provide for strict Liquidated Damages provisions in case of delay in implementation and deviation from performance parameters.

The cost estimates for the Project, have been broadly arrived based on the awarded contracts and the estimates of the technical consultant.

Further, a contingency provision of 3% of the total Hard Cost has been considered in the Project Cost.

Further, any cost overrun shall be funded by BHL from its own sources.

Post-Completion RisksEnvironmental Risks

BEPL The Terms of Reference (ToR) for undertaking the EIA study have already been approved by State Level Expert Appraisal Committee, GoUP. EIA study and EMP have been submitted to UPPCB and request for public hearing has been made vide letter dated 5.04.2010.

Water Availability

BEPL For the total requirement of 34920 m³/day (6984 m³/ day per site) water per annum, final approval from Central Ground Water Authority, GoI has been obtained for the drawl of the required ground water.

Fuel Supply BEPL/ BHL/MoC/ CIL

As informed by BHL, it has been granted coal linkage in Standing Linkage Committee (Long-term) [SLC (LT)] meeting held on April 8, 2010.



MW Power Project



The linkage is expected to be granted from NCL mines near Singrauli, Madhya Pradesh.

Coal Transportation

BEPL For supply of coal from the allotted mines, under long term coal linkage, coal would be transported through Indian Railways rail network and by road. All the project sites are well connected through road and rail network.

Fuel Price BEPL Fuel pricing under the long-term linkage of from CIL/NCL will be subject to price variations on account of change in government notified prices though the historical rise in price of Linkage coal has been gradual.

Also, fluctuation in the price of secondary fuel shall impact the operating cost structure of BEPL. However, this is a very small component of the total operating costs.

However, as per the draft PPA initialled by UPPCL and BHL, delivered fuel cost (both primary and secondary) including ex-mine price and transportation cost shall be a pass-through in tariff. This will ensure that the profitability and debt servicing capability of the Project remain robust.

To assess the viability and debt servicing capability of the Project, 2.5% p.a. escalation has been considered in the fuel price in line with past trends in coal prices.

Evacuation Risks BEPL The power would be evacuated by using the existing 132 KV transmission line at four out of the five project sites. Further, the



MW Power Project



evacuation network is being augmented and strengthened suitably for which Cost has been provided for in the Project cost. UPPCL sub-stations are located within 15-25 km from these sites. For Utraula, UPPCL sub-station is being constructed within the premises of the existing sugar unit for which land has already been provided to UPPCL.

Market RiskOff Take Risk UPPCL/

others BHL has already initialled the

Draft Power Purchase Agreement with UPPCL for sale of 90% of the net power produced on long term basis for 25 years. Final PPA is expected to be signed soon.

Balance 10% power from the Project would be sold on merchant basis. The tariff considered for merchant sale is reasonable and in line with the long term tariff derived as per UPERC guidelines and the Company would be in position to sell the entire power given the power deficit stage in the state of Uttar Pradesh.

Payment Risk UPPCL/ Other Off-takers

The Company proposes to sell 90% of the net saleable energy to UPPCL on long term Take or Pay basis. The draft PPA initialled by BHL and UPPCL provides for a strong payment security mechanism in the form of Letter of Credit and Escrow Account to secure the payments from UPPCL.

The balance power from the Project would also be sold against adequate payment security.

Technology RiskPlant BTG The BTG package has been



MW Power Project



Performance Contractor /BIDCO

awarded to ThyssenKrupp Industries India (for 3 Boilers), Thermax Limited (for 2 Boilers) and Siemens Limited (for all 5 Steam Turbine & Generator package) through the appointed Project Management Consultant, BIDCO.

The aforesaid companies have an established track record of manufacturing and installing power equipment for 45 MW size units.

Back to back contracts awarded by BIDCO to the aforesaid contractors provide for stringent Performance Tests and in case of performance below the stipulated parameters, the suppliers will be required to pay liquidated damages.

The O&M shall be carried out by BEPL in-house with the support of its technical team of experts. Adequate level of stocks of spare parts would be maintained as per the recommendations of BIDCO/ Equipment Suppliers. The group has an established track record of operating and maintaining the existing units of power plants of aggregate capacity of 428 MW on bagasse technology.

Force Majeure BEPL / Insurers

BHL proposes to take out a comprehensive insurance policy package during the construction/ operations period for the Project for insurable Force Majeure events.

Financial RiskInterest Rate BEPL Interest on project loan will be

allowed as a pass-through expense in the tariff to be



MW Power Project



approved by UPERC; Sensitivity has been carried out at

interest rate of 12% p.a. against base case rate of 11.50% p.a., and holding revenues constant, and the financials and DSCR are found to be comfortable.



MW Power Project

10 Conclusion

BEPL proposes to set-up 450 MW Coal fired Thermal Power Project in

the premises of five (5) existing sugar units of BHL and BHSIL. Salient

features of the proposed Project are as under:

Credible Promoters: Bajaj Hindusthan Limited (BHL) is the largest

sugar and ethanol manufacturer of India with robust business

operations and adequate financial strength. Additionally, BHL has

successfully set up various green field projects including sugar units

and co-generation power plants across Uttar Pradesh and has vast

experience in such projects.

Significant progress in project development activities as

under:

BHL has already spent around Rs. 438 crore on the Project. The

Project is in advanced stage of implementation and is expected

to commence commercial operations on 1st November, 2010.

Entire land requirement to be met through the surplus land

available in the premises of sugar units of BHL and BHSIL. Land

parcels have already been identified and site development work

has already commenced;

Contract for Boiler, Turbine & Generator has already been

awarded to ThyssenKrupp Industries India (for 3 Boilers),

Thermax Limited (for 2 Boilers) and Siemens Limited (for all 5

Steam Turbine & Generator package);

Contract for Engineering services and Civil Works has already

been awarded to Powertech Engineering (P) Limited, Toshiba

Plant Systems & Services Corporation India Private Limited, KK

Construction & Builders, ERA Building Systems Limited and



MW Power Project

Petron Civil Engineering (P) Limited.

Ministry of Coal has granted long term coal linkage to the Project

in the SLC-LT meeting held on 8th April, 2010. Coal is expected to

be provided from the mines of Northern Coalfields Limited in

Madhya Pradesh.

Draft Power Purchase Agreement for sale of 90% of the net

power produced from the Project has been initialled by BHL and

UPPCL. Power to be procured on cost-plus tariff, determined in

accordance with the UPERC tariff determination guidelines.

Power to be evacuated through the already existing 132 KV

transmission line at four out of the five project sites to different

UPPCL sub-stations located 15-20 km from the respective sites.

Final approval to draw the requisite quantity of ground water for

all the five sites has been obtained from Central Ground Water

Authority, GoI.

BHL has already applied for all major statutory clearances/

approvals required for the Project. EIA study and EMP already

submitted to Uttar Pradesh Pollution Control Board for conduct of

public hearing and subsequent grant of Environment Clearance

for the Project.

This Information Memorandum analyzes the project development

structure and projected financial performance of the Project as per

information provided by BHL. The Base Case business projections have

been prepared based on the information pertaining to the project cost,

financing plan, regulatory environment and prevalent market

conditions. Sensitivity analysis has also been carried out to test the

robustness of project financials in respect of DSCR and PIRR. The

projected financials of the project as required to service the project

debt over proposed tenor are reasonably comfortable under different

sensitivity scenarios.



MW Power Project

Based on the projected financials, sensitivity analysis and risks factors,

the proposed Project may be viewed as financially viable.

11 Indicative Term Sheet

11.1 Indicative Terms and Conditions – Rupee Term Loan

1. Borrower Bajaj Energy Private Limited (BEPL)

2. Project

2 X 45 MW Thermal Power Projects at 5

separate locations viz. Barkhera (district:

Pilibhit), Khambarkhera (district: Lakhimpuri

Kheri), Maqsudapur (district: Shajhanpur),

Kundarkhi (district: Gonda), Utraula (district:

Balrampur), in the state of Uttar Pradesh,

aggregating to a total capacity 0f 450 MW.

3. Sponsor Bajaj Hindusthan Limited/ Promoter Group

4. Lenders

Indian Banks/ Institutions, collectively the

“Lenders”, who are participating in funding the

Project by way of Rupee Term Loan.

5.Facility Agent/Lead

Bank

State Bank of India

(subject to approval of the Lenders)

6. Project Cost Rs 2,320 crore

7. Debt Equity Ratio 75:25

8. Means of Finance

The cost of the project is proposed to be

funded at a Debt Equity Ratio of 3:1 as under:

Rupee Term Loan: Rs.1740 Cr

Sponsor’s Contribution/ Equity : Rs.580 Cr

9. Upfront Equity60% of the total equity contribution for the

Project

10. Facility Rupee Term Loan of Rs. 1740 crore and

Sub Limit:



MW Power Project

100% of the sanctioned rupee loan by way of

Letter of Credit (LC) as a sub limit of the Rupee

Term Loan.

11.Purpose of the

Facility

The proceeds of the Facility will be utilized

towards the following:

1. Funding of the Project Cost;

2. Repayment of bridge loans, if any, availed

to meet the ongoing capital expenditure

pending disbursement of Rupee Term Loan.

12. Availability PeriodThe availability period for the Facility shall be

up to six (6) months from the CoD.

13. Validity PeriodThe sanction terms shall be valid up to a period

of six (6) months from the date of sanction.

14.Financial Closure

DateDate of signing of Facility Agreement.

15. First Disbursement

First Disbursement shall mean the earlier of:

1. First Drawdown under the Rupee Term

Loan;

2. Opening of LC under the Facility.

16.

Commercial

Operation Date

(CoD)

CoD shall be the earlier of the following:

1. November 01, 2011;

2. Actual commercial operations date of the

last unit of the Project as certified by the

Lenders’ Independent Engineer (LIE).

17. Door to Door Tenor

Upto 12 years (Construction Period plus

Moratorium of 6 months and Repayment period

of 10 years)

18. MoratoriumMoratorium period of six (6) months from the

CoD.

19. RepaymentPrincipal repayment in forty equated quarterly

instalments post Moratorium.



MW Power Project

20.

(i) Interest Rate on

Rupee Term Loan

(ii) LC Charges

The Borrower shall pay the interest on the

outstanding principal amount of the Rupee

Term Loan at the end of every month to the

Lenders as under :

State Bank Advance Rate (SBAR) minus a

Spread of 0.25%, present effective being

11.50% p.a., floating, payable monthly.

Interest Rate shall be suitably adjusted in

accordance to the Base Rate Provisions, as and

when applicable to the Rupee Term Loan as

per the provisions to be introduced by the

Reserve Bank of India.

LC charges shall be decided mutually with the

Lenders at the time of opening of LC.

21. Interest Reset Date

Lenders would have the option to reset the

Spread on CoD and at annual intervals

thereafter, such date(s) being called the

Interest Reset Date(s).

Between two consecutive Interest Reset Dates,

the Spread would remain constant and SBAR

would be floating.

Facility Agent would advise the Borrower about

the reset of Interest Rate 30 days prior to each

Interest Reset Date.

22.Interest Tax, Levies

& Duties

Interest tax / other levies / duties, if any,

applicable as per Facility Agreement, shall be

payable by the Borrower over and above the

Interest Rate mentioned above.

23. Up-front Fees 0.25% of the Rupee Term Loan, payable at the



MW Power Project

time of signing of Facility Agreement.

24. Commitment Fee

1.20% p.a. on the undrawn amount with

respect to the quarterly Drawdown Schedule

provided by the Borrower on Financial Closure

Date with flexibility to amend/revise/replace

the Drawdown Schedule with fifteen (15) days

written notice by the Borrower to the Facility

Agent prior to beginning of each quarter.

Commitment Fee shall not be payable in case

of such amendments or replacement.

25.Pre-Payment

penalty

2% of the amount pre-paid. No pre-payment

penalty, however, shall be payable if the pre-

payment is effected in any of the following

events:

a. At the instance of the Lenders;

b. From surplus cash accruals generated by

the Project,

c. On Interest Reset Date, the Borrower

shall have the option to prepay the

outstanding Rupee Term Loan by

advising its intention to prepay with an

advance written notice of 15 days and

prepay the Rupee Term Loan within 4

months from Interest Reset Date;

26.

Liquidated

damages on

defaulted

payments

2% p.a. for the period of default on the

outstanding amount in respect of Principal &

interest, up-front fees or any other monies

specified in the Facility Agreement due on their

respective due dates.

27. Security The Rupee Term Loan alongwith interest, fees,

commission and other monies in respect

thereof and Working Capital Limits, to the

extent assessed and revised from time to time,



MW Power Project

shall be secured by way of:

a) Security to be created prior to the First

Disbursement:

1) First pari-passu charge by way of

hypothecation of all the movable assets

including, but not limited to plant &

machinery, machinery spares, tools &

accessories of the Project;

2) First pari-passu charge on all the bank

accounts of the Project including but not

limited to the Trust & Retention Account

(TRA) and Debt Service Reserve Account

(DSRA).

3) First pari-passu charge on book debts,

operating cash flows, commissions,

revenues of whatsoever nature and

wherever arising, present and future,

intangibles, goodwill, uncalled capital,

present and future relating to the Project;

4) First pari-passu charge on other Current

Assets of the Project;

b) Security to be created within six months

from the date of First Disbursement:

1) First pari-passu charge by way of

mortgage and charge over all immovable

assets (including mortgage of leasehold

rights in case of leasehold land, if any) of

the Project;

2) Assignment by way of security of all

rights, titles and interests of the Borrower

in, to and under all project documents,



MW Power Project

contracts, insurance policies, permits /

approvals etc. to which the Borrower is a

party and which can be legally assigned

related to the Project.

28. Collateral

Pledge of 51% of the fully paid-up equity

shares of BEPL by the Sponsor, at all times

during the currency of the Rupee Term Loan in

favour of the Lenders. The pledgor to ensure

that the voting rights of the pledged shares do

not fall below 51%.

Pledge of shares shall be created on the

Financial Closure Date.

29. Undertaking by BHL

BHL shall provide Undertaking backed by

Board Resolution for the following purposes:

1) Infuse sufficient money in the Borrower, in

case of any shortfall in equity, in a manner

and form to the satisfaction of the Lenders;

2) That the completion cost of the Project

shall not exceed the Project Cost indicated

above and in case of any cost over-run, the

same shall be met by BHL through

additional equity contribution /

subordinated debt from BHL or loans

arranged by BHL without recourse to the

Security and Collateral, in a manner and

form to the satisfaction of the Lenders.

30. Additional interest The Borrower shall create the security as per

Clause 27 (b) within six (6) months from the

date of First Disbursement. If the Borrower fails

to create the security within six (6) months

from the date of First Disbursement, the

Borrower shall pay an additional interest of 1%

p.a. on the entire outstanding Rupee Term



MW Power Project

Loan amount from 1st day of the seventh (7th)

month from the date of first disbursement till

creation of security. Any further disbursements

pending perfection of security shall be at the

sole discretion of the Lenders.

31.Financial

Covenants

Starting from first full year of operations post

CoD, for any adverse deviation of any two out

of the first three covenants i), ii) and iii)

indicated below by more than 10% from the

levels stipulated hereunder and any deviation

in covenant iv) stipulated hereunder, Penal

Interest of 1% p.a. will be levied for the period

of non-adherence, subject to a minimum period

of one year. The measurement of deviation

shall be once a year with reference to the last

annual audited financial statements.

(i) Current Ratio of 1.33 (never below 1.20) ;

(ii) Total Outstanding Liabilities* / Tangible Net

Worth** of 3.20 (never above 3.50);

(iii) Security Margin*** of 20% (never below

18%);

(iv) DSCR of 1.15

* Total Outstanding Liabilities = (Secured

Loans + Unsecured Loans + Current Liabilities

& Provisions + Advance Against Depreciation)

** Tangible Net Worth = (Paid up capital +

Reserves and Surplus (excluding Revaluation

reserve) + Net Deferred Tax Liability –

Intangible Assets)

*** Security Margin = (1- Outstanding Rupee

Term Loan/ Net Fixed Assets)



MW Power Project

32. Pre-Commitment

conditions

The Borrower agrees as under:

1) The Borrower shall have received sanctions

for the entire Rupee Term Loan;

2) To finalise the exact shareholding/equity

contribution pattern by the Sponsor in the

Borrower;

3) The Borrower/BHL shall have received

Letter of Assurance from Ministry of Coal for

the coal required for the Project.

4) Undertake to bring in the entire equity

requirement for the Project in a timely

manner;

5) Provide an undertaking that the completion

cost of the Project shall not exceed the

Project Cost indicated above and in case of

any cost over-run, the same shall be met by

BHL through additional equity contribution /

subordinated debt from BHL or loans

arranged by BHL without recourse to Project

assets, in a manner and to the satisfaction

of the Lenders;

6) Agree for appointment of Lenders’

Independent Engineer (LIE), Lenders’ Legal

Counsel (LLC) and Lenders’ Insurance

Advisor (LIA) and any other agencies as

may be necessary for review and

monitoring of the Project. The Borrower

shall also agree to bear the expenditure

incurred for availing the services of these

agencies;

7) Agree to prepare a schedule for award of

Project contracts adhering to or improving

upon the envisaged implementation



MW Power Project

schedule for the Project ;

8) That the Lenders reserves the right to

withhold disbursement of the amount of

loan equivalent to the provision against

margin money for working capital in the

cost of the Project till such time as the

Project is near completion and the build up

of the working capital commences;

9) That the Lenders shall reserve the right to

review the cost of the Project and means of

finance anytime during construction period

of the Project and stipulate relevant

conditions, as deemed necessary;

10) That the preliminary and preoperative

expenses shall be allowed as part of the

Project cost only to the extent they are

certified by the LIE / LLC/ Statutory

Auditor/Other agency as relating to the

Project and as accepted by the Lenders;

11) Agree to make suitable arrangements

for project management/ O&M during

implementation and operation of the

Project;

12) Agree to modify its Memorandum of

Association and Articles of Association, for

enhancement of the authorized share

capital and borrowing power as per the

envisaged financing plan, if required, and

incorporate any other changes as may be

required by the Lenders;

13) Ensure that the expenditure on the

Project is as per schedule and in case of any

savings in the expenditure on account of



MW Power Project

change in duties/other taxes and / or price

negotiations, the Lenders shall have the

right to cancel their Rupee Term Loan in the

proportion mentioned under Financing plan;

14) That the Lenders shall be entitled to

appoint one (1) nominee on behalf of all the

Lenders on the Board of the Borrower on

occurrence of an Event of Default;

15) Undertake to open a Trust and Retention

Account (TRA) to the satisfaction of the

Lenders through which all the Project cash

flows (including during construction period)

would flow and maintain a Debt Service

Reserve Account (DSRA) in the TRA for the

ensuing 3 months principal and interest

payment due to the Lenders from the cash

flows available after meeting debt service

obligations during the operational phase.

DSRA should be topped-up to the required

level within 6 months from CoD. The

Borrower will have one-time option to

provide a letter of credit/ bank guarantee

without recourse to project assets and as

acceptable to Lenders, for an amount

equivalent to ensuing 3 months principal

and interest payment to the Lenders, in lieu

of cash funded DSRA. No grace period will

be allowed for build-up of requisite amount

in DSRA if letter of credit/bank guarantee is

provided in lieu of cash funded DSRA.

The amounts accumulated in the DSRA

would be utilized only in case of a shortfall

in cash flows for meeting debt service



MW Power Project

requirements from time to time. The

Borrower shall invest the funds in DSRA only

in permitted investments and securities as

approved by Lenders. No dividend

distribution will be permitted until the DSRA

requirement is fulfilled.

16) To obtain rating by an external credit

rating agency for the Facility with-in three

(3) months from Financial Closure Date.

33. Conditions

Precedent to First

Disbursement

Prior to first disbursement under the Facility,

the Borrower/BHL, as the case may be, shall, to

the satisfaction of the Lenders, have complied

with the following:

1) 60% of the total equity required for the

Project shall have been spent on the

Project;

2) The Borrower/BHL shall have firmed up

power sale arrangements for at least 90%

of the Project capacity by entering into a

long term Power Purchase Agreement with

UPPCL with suitable payment security

mechanism;

3) Acquire/lease the requisite land for the

Project to the satisfaction of the Lenders.

4) Execute contract for BTG and major civil

contracts and display readiness to award

other major contracts;

5) Initiate steps to make necessary

arrangements for transportation of

requisite quantity of coal to the Project

site;

6) Obtain critical statutory clearances

required for implementation of the Project,



MW Power Project

as certified by Lenders Independent

Engineer (LIE), including NOC from State

Pollution Control Board and Environmental

Clearance from State Level Expert

Appraisal Committee and agree to comply

with all the conditions of these clearances.

7) To appoint Lenders Independent Engineer

(LIE) on the terms which would include

review of project cost, review of project

agreements/contracts/clearances, and pre-

construction due-diligence, monitoring of

construction and performance, testing, CoD

and monitoring of operations post CoD.

8) Arrange to review the water availability,

sourcing plans, etc. by LIE and accordingly

have a firm allocation from concerned state

government department for the same;

9) To demonstrate that actions have been

initiated for arrangement of evacuation

facilities for entire power generated from

the Project;;

10) Appoint Lenders’ Legal Counsel (LLC)

and Lenders’ Insurance Advisor (LIA) and

any other agencies as may be deemed

necessary for review and monitoring of the

Project. The Borrower shall also agree to

bear the expenditure incurred for availing

the services of these agencies;

11) To ensure that the concerns raised by

LIE/LLC in regard to key contracts required

for the implementation of the Project are

adequately addressed to satisfaction of the

lenders.



MW Power Project

12) Make a plan for obtaining necessary

right of way and/or acquisition of land, if

any, for laying of water pipeline, if

required, and power transmission line to

inter-connection point in line with the

commissioning schedule of the project (to

be reviewed by the LIE);

13) Prepare a schedule for award of Project

contracts adhering to or improving upon

the envisaged; implementation schedule

for the Project (to be reviewed by LIE);

14) Open a Trust & Retention Account (TRA)

into which the Borrower shall deposit all its

cash inflows from the Project to be utilized/

applied in a manner and priority to be

stipulated in the TRA Agreement. For this

purpose, the Borrower shall have to

appoint an acceptable bank/institution as a

Trust and Retention Agent and enter into a

Trust and Retention Agreement;

15) To appoint Owner’s Engineer for

monitoring of project implementation to

the satisfaction of Lenders / LIE;

16) Undertake that all the inter-group

transactions relating to the Project are not

prejudicial to the interest of BEPL and

appropriately disclosed;

17) Fully insure the Borrower’s assets,

offered as security for the Facility, against

fire and all such other risks as may be

required by the Lenders/ LIA and the

policies retained by the Borrower. Ensure

that requisite insurance policies have been



MW Power Project

suitable endorsed in favour of the Lenders

which should contain the Lenders’ Security

Stipulation and name the Lenders as loss

payees. A copy of this policy should be

submitted to the Lenders/ LIA for review. A

list of the current insurance policies should

be submitted to the Lenders detailing

therein the names and addresses of the

insurer, brief particulars of goods covered,

type of cover, amount of cover and date of

expiry of each policy.

18) To ensure that Lenders shall have

received the final copies of the

construction schedule, organization chart,

copies and related contracts, the

construction budget and disbursement

schedule, in accordance with the Base case

business plan as agreed between Borrower

and the relevant contractors and duly

certified by LIE.

19) Furnish an undertaking that Borrower

and other contracted parties have

complied with the conditions precedent in

major project documents and in critical

statutory clearances/approvals of the

Project.

20) To ensure that all representations and

warranties which are made till the date of

first drawdown are true in all material

respects.

34. Conditions

Subsequent to First

Disbursement

1) Within 6 months of the date of First

Disbursement, the Borrower shall submit to

the Facility Agent/Security Trustee ‘No



MW Power Project

Objection Certificates’ from the existing

lenders of BHL/Bajaj Hindusthan Sugar and

Industries Ltd. (BHSIL) for the following:

a. Use of Land, transmission network

and other assets transferred/leased

by BHL/BHSIL to the Borrower;

b. Infusion of Equity by BHL in the

Borrower.

2) The Borrower shall execute the Fuel Supply

Agreement and Fuel Transportation

Agreement 6 months prior to the CoD and

the same shall be vetted by the LE/LLC and

the Borrower shall comply with their

observations, if any.

35. Negative

Covenants

During the currency of the Rupee Term Loan,

the Borrower shall not without prior approval of

the Lenders, which would not be withheld

unreasonably:

1) Effect any change in the capital structure

which results in the Long Term Debt to

Equity ratio exceeding 75:25;

2) Formulate and effect any scheme of

amalgamation or restructuring or

reconstruction;

3) Create any Security Interest over the

Project assets/ properties and contracts

other than those required to be created

under the Facility Agreement;

4) Undertake any new project either itself or

through any of its subsidiary(ies).

5) Augment, modernize, expand or otherwise

make material change in the scope of the



MW Power Project

Project;

6) Make any material modifications to Project

Contracts/ Agreements;

7) Enter into borrowing arrangements, either

secured or unsecured, with any other bank

or financial institution or undertake any

guarantee obligation on behalf of any other

borrower (including group companies). The

Borrower may however enter into

borrowing arrangements for refinancing

and for meeting its working capital

requirements and such additional financing

arranged to meet any cost overruns as

discussed in this Term Sheet.

8) Allow the following:

a. Dilution of equity holding of the

Sponsor in BEPL below 51%, and

b. Dilution of equity holding of Bajaj

Hindusthan Limited in BEPL below

26%.

36. Event of Default The Lenders may reserve the right to call up

the Facility by giving a notice of 30 days upon

the happening of any of the following events of

Default (each an “Event of Default”): –

1) Any instalment of principal amount or

interest on the Facility remaining unpaid

for a period exceeding thirty (30) days on

their respective due dates.

2) The Borrower committing any breach or

default in the performance or observance

of the material covenants of the Facility

Agreement and such breach or default

continues for a period of ninety (90) days



MW Power Project

after receipt of a notice from the Lenders.

3) Execution or distress being enforced or

levied against the whole or any part of the

Borrower’s property and any order relating

thereto is not discharged or stayed within a

period of ninety (90) days from the date of

enforcement or levy.

4) The Borrower ceasing or threatening to

cease to carry on its business for a period

exceeding ninety (90) days.

5) A receiver being appointed in respect of

the whole or any part of the property of the

Borrower and such appointment is not

stayed, quashed or dismissed within a

period of ninety (90) days.

6) The occurrence of any event or

circumstance which is prejudicial to or

imperils or depreciates the security given

to the Lenders and such event or

circumstance continues to have an effect

for a period in excess of ninety (90) days.

37. Other Terms &

Conditions

1) In case of default in repayment of the

principal amount or payment of interest or

any other dues on due dates, the Lenders /

RBI / CIBIL shall have right to disclose

details of the default and/or other

information and the name of the Borrower

and of its directors as defaulters;

2) The Lenders acting through the Lead Bank

will have the right to examine the books of

accounts of the Borrower and to have the

Project site inspected from time to time by

officers of the Lenders and/or outside



MW Power Project

auditors. Expenses incurred by the Bank in

this regard will be borne by the Borrower;

3) The Borrower shall ensure that, as required

by the Lenders, approvals and clearances

received in the name of Bajaj Hindusthan

Limited/Bajaj Hindusthan Sugar and

Industries Limited/any other entity shall be

transferred in the name of BEPL;

4) Rupee Term Loan will be disbursed after

each drawdown request is certified by the

LIE as being in consonance with the project

implementation schedule/status and by a

chartered accountant as being in

consonance with the expenditure incurred

on the Project.

5) The Borrower shall to the satisfaction of the

Lenders:

a. Obtain prior approval of the

Lenders for incurring and utilizing amount

of the loans equivalent to the contingency

provision in the Project cost. The

disbursement of the contingency provision

shall be based on LIE certification.

b. Maintain a Debt Service Reserve

Account (DSRA) in the TRA for the ensuing

3 months principal and interest payment

due to the Lenders from the cash flows

available after meeting debt service

obligations during the operational phase.

DSRA should be topped-up to the required

level within 6 months from CoD. The

Borrower will have one-time option to

provide a letter of credit/ bank guarantee



MW Power Project

without recourse to project assets and as

acceptable to Lenders, for an amount

equivalent to ensuing 3 months principal

and interest payment to the Lenders, in

lieu of cash funded DSRA. No grace period

will be allowed for build-up of requisite

amount in DSRA if letter of credit/bank

guarantee is provided in lieu of cash

funded DSRA.

The amounts accumulated in the DSRA

would be utilized only in case of a shortfall

in cash flows for meeting debt service

requirements from time to time. The

Borrower shall invest the funds in DSRA

only in permitted investments and

securities as approved by Lenders. No

dividend distribution will be permitted

until the DSRA requirement is fulfilled.

c. Make satisfactory arrangements

for tie-up of the required working capital

facilities prior to start of commercial

operations;

d. Appoint technical, financial and

executive personnel of proper qualification

and experience for the key posts and

ensure that the organization set up is

adequate enough for smooth

implementation and operation of the

Project;

e. Undertake not to declare any

dividend during construction/ moratorium

period and that during the repayment

period of Rupee Term Loan, it shall not,



MW Power Project

without obtaining prior consent of the

lenders declare any dividend on its share

capital in case; (i) During the Continuance

of an Event of Default, or (ii) if the DSRA is

not funded and /or arranged as required by

the Lenders;

f.Constitute a Project Management

Committee of Directors/Senior Executives

for the purpose of supervising and

monitoring the progress of implementation

of the Project. The committee shall be

responsible for the management of the

Project during construction period and

monitoring of the implementation of the

Project.

g. Constitute an Audit Sub-

committee of its Directors to the

satisfaction of Lenders for monitoring of

the company’s operations;

h. Furnish to the Lenders every year

a copy of audited annual accounts of the

Borrower immediately on finalisation of the

same but in any case not later than 180

days from the end of each relevant

accounting period;

i. Submit to the Lenders such financial

statements as may be required by the

Lenders from time to time, apart from the

set of such statements to be furnished by

the Borrower to the Lenders as on date of

publication of the company’s annual

accounts.

j. Provide regular progress reports on the



MW Power Project

Project both during construction and during

operation to the Lenders as may be

required by the Lenders;

k. Agree to broad-base its Board of

Directors with professional nominees and

strengthen its management set up to the

satisfaction of Lenders;

l. Permit the Lenders and their authorized

officers or employees to carry out

technical, financial and legal inspections of

the assets created out of the Facility and to

visit any facilities and construction sites

included in the Project and to examine any

plants, installations, sites, works, buildings,

properties, equipment, records and

documents relevant to the performance of

the obligations of Borrower under the

Facility agreement. Any such

representative of the Lenders shall have

access to Borrower’s properties upon

suitable prior notice and shall receive full

cooperation and assistance from the

employees of Borrower provided no

material disturbance will be caused to the

business and operations of Borrower.

m. Maintain adequate books of

accounts which should correctly reflect its

financial position and scale of operations

and should not radically change its

accounting system without prior notice to

the Lenders.

n. Keep the Lenders informed of the

happening of any event likely to have



MW Power Project

substantial effect on its profit and business

with explanations and the remedial steps

proposed to be taken.

o. Keep the Lenders advised of any

circumstances adversely affecting the

financial position of their subsidiaries/group

companies or companies or in which it has

large investments, including any action

taken by the creditor against the said

companies legally or otherwise.

p. Increase its authorized share

capital in line with the envisaged means of

finance, if required.

38. Documentation

In addition to the terms and conditions

contained in this Term Sheet, the final

documentation will contain other customary

clauses such as Financial covenants,

Representation & Warranties from the

Borrower, Conditions Precedent to the

effectiveness of the loan and Condition

Precedent to each disbursement, Affirmative

Covenants by Borrower, Negative Covenants,

Additional Covenants, Information Covenants,

Events of Defaults by the Borrower and the

Consequences of the Event of Default, RBI

disclosure norms, as applicable etc.



MW Power Project

12 Annexure

12.1 Annexure I: Historical Financials of BHL

Profit & Loss Statement

(Rs.Crore)

Year ending September 30, 2006 2007 2008 2009 INCOME

Sales1526.9

2 1841.2

2 1879.4

9 1655.75

Less: Excise Duty 79.68 128.21 123.21 72.02

Net Sales1,447.

24 1,713.

01 1,756.

28 1,583.7

4

Total Income (A)1,447.

24 1,713.

01 1,756.

28 1,583.7

4 EXPENDITURE

Raw Material Consumed951.45

1,283.42

1,390.33

816.76

Stores Consumed 53.34 108.81 75.99 35.46 Power & Fuel 9.88 12.79 18.23 14.98 Repairs & Maintenance 32.73 42.61 46.22 19.89 Manpower Cost 56.60 112.52 116.29 120.83 Rent 1.49 2.44 3.55 3.81



MW Power Project

(Rs.Crore)

Year ending September 30, 2006 2007 2008 2009 Other Expenses 25.71 42.05 141.52 51.11 Selling & Distribution expenses

12.12 22.98 16.90 13.04

(Increase)/ Decrease in Stocks

(6.98)(132.4

1)(224.69

)143.73

Total Expenses (B)1,136.

33 1,495.

20 1,584.

33 1,219.6

0

EBITDA (A-B)310.9

1 217.8

1 171.95 364.13

Less: Interest on Term Loans, Debentures, Fixed Deposits

27.71 46.18 102.99 85.57

Interest Income 52.20 73.35

100.09

107.98

Less: Interest on Others9.29 38.52

47.27

115.84

Less: Interest on Working Capital Loans

11.81 47.24 65.97 81.34

Finance Charges 1.23 5.09 23.31 12.31

PBDT313.0

5 154.1

2 32.50 177.06

Less: Depreciation 72.39

146.88

187.22 202.21

Operating Profit240.6

6 7.24

(154.72)

(25.16)

Add: Other Income 39.51 30.65 46.59 231.16

PBT 280.

17 37.89

(108.13)

206.00

Less: Income Tax89.34

(7.81)

(60.44)

49.77

PAT190.8

3 45.70

(47.69)

156.23

Balance Sheet

(Rs.Crore)

As on September 30, 2006 2007 2008 2009 ASSETSFixed Assets Land & Building 261.71 550.04 643.13 724.94



MW Power Project

(Rs.Crore)

As on September 30, 2006 2007 2008 2009

Plant & Machinery866.17

1895.26

2237.22 2507.8

9 Other Fixed Assets 157.46 193.96 176.03 174.65

Gross Block1,285.

34 2,639.

26 3,056.3

8 3,407.

48 Less: Depreciation 271.86 418.62 577.56 774.98

Net Fixed Assets 1,013

.48 2,220

.64 2,478.8

3 2,632.

50

Capital work in progress1,223.

08 562.97 138.69 131.28

Total Fixed Assets & CWIP (A) 2,236

.56 2,783.

61 2,617.5

2 2,763.

77

Investments (B)205.8

1 437.4

7 488.26 549.11

Current Assets Inventories

Raw Materials0.05

-

- 305.66

Work in progress -

-

- 0.40

Finished Goods 70.83 308.71 584.06 395.37 Stores & Spares 42.29 59.81 44.90 59.00 By products 9.21 26.31 8.28 40.02

Total Inventories122.3

9 394.8

3 637.24 800.45

Receivables Outstanding for more than six months (Net)

0.50 1.56 2.05 0.87

Other debts 61.36 108.44 40.25 27.70

Total Receivables61.86

110.00

42.30 28.57

Loans & Advances Advance Tax 59.47 80.10 99.45 110.21 Loans to Subsidiaries & Joint Venture

200.76 828.19 900.73 956.21

Others loans & advances274.06 586.99 806.03

1,026.63

Total Loans & Advances534.2

8 1,495.

28 1,806.2

1 2,093.

05 Cash & Bank Balance 223.31 108.95 39.73 112.36 Total Current Assets © 941.8 2,109. 2,525. 3,034.



MW Power Project

(Rs.Crore)

As on September 30, 2006 2007 2008 2009 3 05 47 42

Total Assets (A+B+C)3,384.

21 5,330.

13 5,631.2

5 6,347.

30 LIABILITIESShare Capital Share Capital (Equity) 14.14 14.14 14.14 17.69 Equity Warrants - - - 18.90

General Reserve 276.

60 281.60 281.407 379.97

Other Reserves1,077.

93 1,138.

59 1,049.56

1,877.11

Total (D)1,368.

67 1,434.

33 1,345.1

1 2,293.

67 Current Liabilities & Provisions

Sundry Creditors 172.87 602.04 562.75 657.35 Bank Borrowings (Working Capital) 95.96 984.84 858.54 539.51

Other current liabilities9.168 22.5

47.74

25.68

Provisions197.46 259.49

207.64

187.42

Total Current Liabilities (E) 475

.45 1,868

.87 1,676.

67 1,409.

96 Long Term Liabilities Secured Loans

- From Fis/ Banks 330

.90 800

.54 1,377

.50 1345.8

7 - From others 13.31 0.50 7.05 56.35

- Debentures -

250.00

565.00

15.00

Unsecured Loans - From promoters - - - -

- From others 1,065

.92 855.0

1 600.

99 1,118.

42 Total Long Term Liabilities (F) 1,410 1,906 2,550. 2,535.



MW Power Project

(Rs.Crore)

As on September 30, 2006 2007 2008 2009 .13 .05 53 64

Deferred Tax Liability/(Asset) (G)129.9

6 120.8

8 58.

94 108.04

Total Liabilities (D+E+F+G)3,384.

21 5,330.

13 5,631.2

5 6,347.

31

12.2 Annexure II: Detailed Banking Arrangement of BHL

S.NoFinancial Institutions/ Banks from which borrowed.

Loan Amount (Rs crore)

Sanctioned

Outstanding as on 31.12.2009

(A) Secured LoanNon Convertible Debentures

1. GIC 15.00 15.00Total Non Convertible Debentures (Total a) 15.00 15.00

Working Capital Loans 2. State Bank of India 750.00 400.66 3. State Bank of Patiala 100.00 90.43 4. Punjab National Bank 300.00 (30.55)5. HDFC 10.00 1.99 6. Oriental Bank of Commerce 150.00 50.70 7. IDBI 170.00 - 8. YES bank 50.00 - 9. Allahabad Bank 25.00 1.29

Total Working Capital Loan(Total b) 1,555.00 514.52

Term Loans from Banks 10. ECB Loan from BNP/ABN 309.64 479.3611. State Bank of Patiala Term Loans 150.88 17.9712. State Bank of India 390.25 90.2513. Punjab National Bank 37.87 37.8714. Oriental Bank of Commerce 20.00 20.0015. Yes bank 30.00 30.0016. IDBI 15.19 15.19

Term loans From Banks(Total c) 953.83 690.64



MW Power Project

S.NoFinancial Institutions/ Banks from which borrowed.

Loan Amount (Rs crore)

Sanctioned

Outstanding as on 31.12.2009

Corporate Loans 17. Punjab National Bank 550.00 466.6718. Bank of Rajasthan 170.00 110.0019. Allahabad Bank 100.00 83.3420. Bank Of India 200.00 200.0021. Corporation Bank 200.00 200.0022. State Bank of Mysore 50.00 50.0023. State Bank of Hyderabad 50.00 50.0024. State Bank of India 300.00 300.00

Total Corporate Loans(Total d) 1,620.00 1,460.01

Term Loans from Others 25. Sugar Development Fund 123.77 70.04

Total Other Loans Others(Total e) 123.77 70.04Total Secured Loans (Total a to e) 4,267.59 2,750.21

(B) Unsecured Loan Deposits

26. Public Deposits 0.08 0.08Total Deposits (Total a) 0.08 0.08

Short Term Loan (STL)27. Central Bank of India 100.00 100.00

Total STL (Total b) 100.00 100.00

Mutual Funds & Others28. LIC Mutual Funds 400.00 400.0029. JP Morgan Assets Management 150.00 0.00

(Total c) 550.00 400.0030. FCCB 549.22 464.80

Total FCCB(Total d) 549.22 464.80Total Unsecured (Total a to d) 1,199.30 964.88Total Loan & Funds (Total A+ B) 5,466.89 3,715.09

Notes The sanctioned amount of FCCB is representing the FCCB of 119.50

million. Out of outstanding Foreign Currency Convertible Bonds (FCCBs) aggregating to US$ 119.50 million, FCCBs of the aggregate



MW Power Project

face value of US$ 19.93 million were repurchased at discount and cancelled during the year 2008-2009.

The outstanding amount of FCCB is representing the FCCB of 99.57 million USD (119.50-19.93)

The difference in the sanctioned and outstanding amount of ECB is only due to the exchange fluctuation.



MW Power Project

12.3 Annexure III: Project Implementation Schedule



MW Power Project

12.4 Annexure IV: Key Assumptions

Particulars DetailsGeneral AssumptionsTotal Capacity of the

Project

450 MW (5 x 2 x 45 MW)

Schedule of

Implementation

CoD of the Project – 1st November, 2011

Phasing AssumptionsQuarterly Phasing of

ExpenditureQuarte

r Ending

%age of total

Expenditure

Mar-10 18.9%

Jun-10 11.0%

Sep-10 8.7%

Dec-10 18.3%

Mar-11 13.6%

Jun-11 8.3%

Sep-11 9.7%

Dec-11 11.5%

Total 100.0%

Operational & Technical DetailsCoal (Primary Fuel) GCV: 3865 Kcal/Kg

Price: Rs. 1880 per tonne as on 1st April, 2010

Escalated: @ 2.5% p.a. thereafter.

LDO (Secondary Fuel) Price: Rs. 24000 per kL as on 1st April, 2010.

Escalated: @ 3.0% p.a. thereafter

Consumption: 1 ml per KWh (UPERC)

Consumption: 0.3 ml per KWh (Actual)

Power Block Actual:

Station Heat Rate: 2675 kcal/KWh

Auxiliary Consumption: 10%

PLF: 80% in the first part-year of Operations



MW Power Project

Particulars Detailsand 85% thereafter for Plant Life.

UPERC Norms:

Station Heat Rate: 2675 kcal/KWh

Auxiliary Consumption: 10%

PLF: 80% in the first part-year of Operations

and 85% thereafter for Plant Life

O&M Expenses Actual: Rs. 12.0 Lacs per MW p.a. (for FY

2009-10) escalated at 5.72%

UPERC Norms: Rs. 18.2 Lacs per MW p.a. (for

FY 2009-10) escalated at 5.72%.

Working Capital Actual:

Margin Money: 25%

Interest on Working Capital: 11.75% p.a.

Coal Stock: 1.5 Months

Fuel Oil Stock: 1.5 Months

O&M Expenses: 1 Month

Spares: 20% of O&M Expenses

Receivables: 1.5 Months

For UPERC Tariff Calculation;

Coal Stock:2 Months

Fuel Oil Stock: 2 Months

O&M Expenses: 1 Month

Maintenance Spares: 20% of O&M Expenses

Receivables: 2 Months

Financing Related Assumption:

Debt : Equity Ratio 75:25

Upfront Equity 60%

Debt Related

Assumptions

Moratorium from CoD 6 Months



MW Power Project

Particulars Detailsof Project

Rate of Interest on

Rupee Term Loan (for

Projections purpose)

11.50% p.a.

Tariff Assumptions

Power Sale 405 MW (90% of Net Saleable Power) to

UPPCL at Regulated Tariff as per UPERC Tariff

Norms. Levelized tariff for 25 years works out

to Rs. 3.54/kwh.

45 MW (10% of Net Saleable Power) on

Merchant basis at Rs. 3.54/kwh in line with the

tariff for long-term PPA with UPPCL.

12.5 Annexure V: Award of Coal Linkage for the Project



MW Power Project

12.6 Annexure VI: Brief profile of Contractors

Thermax (india) Limited

Thermax is an India based solution provider in energy and

engineering services for over 30 years. It has teamed up with

Babcock & Wilcox Power Generation Group, Inc. (B&W PGG), USA



MW Power Project

under a technology license agreement for offering B&W’s Radiant

line of boilers for power utilities. These radiant boilers are the most

thoroughly field-tested and proven sub-critical power utility boiler in

the world.

Some contracts already contracted by Thermax includes Welspun

(43 MW), DCW (50 MW), Maral Overseas (10 MW), J K Laxmi Cements

(36 MW), CESC-RPG enterprise (40 MW), etc. Projects like Meenakshi

Energy Private Limited (270 MW), Brahmani Industries (60 MW),

Chemplast Sanmar – 50 MW, Jay Kay Cements – 50 MW, Madras

Cement Limited – 40 MW are still under execution.

Siemens India Limited

The Siemens Group in India is a unique player in the field of

electrical and electronics engineering with a business volume

aggregating about Rs 11,800 crores. The group’s business is

represented by various companies that span across three major

business segments of Industry, Energy and Healthcare. Siemens

Group in India comprises of 20 companies, providing direct

employment to over 17,200 persons. Currently, the group has 19

manufacturing plants, a wide network up of Sales and Service offices

across the country as well as over 500 channel partners.

Thyssenkrupp Industires India Pvt. Limited

ThyssenKrupp Industries India Pvt. Ltd. (TKII) in the last five decades

has grown to become one of the most trusted names in the fields of

Sugar Plants & Machinery, Open Cast Mining & Bulk Material

Handling Systems, Cement Plants & Machinery and Steam & Power

Generation Plants. The company's nationwide branch network along

with the support of ThyssenKrupp’s global establishments enables it

to meet the needs of customers on time. Few of the projects



MW Power Project

executed by TKII in power generation are as follows:

Aditya Cement Limited: 2x25 MW Thermal power plant at

Chittorgarh Rajasthan

Ultratech Cement Limited: 2x25 MW Thermal power plant at

Tadipatri Andhra Pradesh

Tata Chemicals Limited (TCL): 1x50 MW Thermal Power plant

for TCL at Mithapur, Gujarat.

The India Cements Limited: 1x50 MW power plant for The India

Cement Limited at Sankarnagar, Tamil Nadu is under

execution

ANRAK Aluminium Limited: 2x75 MW thermal power plant at

Vishakapatnam, Andhra Pradesh is under execution

Mantech Technical Services Private Limited (MTSPL)

MTSPL is an engineering consultancy services and specializes in

project development and engineering services for the following

projects.

Coal based Thermal Power Projects,

Gas based Power Projects,

Renewable Energy Projects,

Waste to Energy Projects,

Desalination Projects.

Few of the projects completed by MTSPL are as under:

Construction Services for 46 MW Coal Fired CPP Project for

L&T Awarpur, Maharashtra

105 MW Diesel Based Power Project of Balaji Power

Corporation, Tamil Nadu

Lender Engineering Services for Vishnuprayag Hydro Power

Project, Uttar Pradesh - Electrical & Balance of plant

equipments and substation



MW Power Project

Installation of 2 X 210 MW steam turbine and auxiliaries at

Raichur Thermal Power Project, Karnataka.

Powertech Engineering Pvt. Limited (PEPL)

PEPL is a reputed engineering organizations with well established

credentials in the Indian Power Sector. PEPL has an Engineering

Consultancy practice as well as an Infrastructure and Management

Consultancy practice. The firm has so far executed more than 130

assignments under different categories of services such as Project

development (PD), Owners Engineer (OE), Detailed Engineering (DE),

etc. Few of the executed assignments by PEPL are as follows:

105.66 MW DG Based Project for Balaji Power Co. Pvt. Ltd in

Tamil Nadu

330 MW Combined Cycle IPP of PPN Power Generating Co. Pvt.

Ltd., in Tamil Nadu

330 MW Gas Based Combined Cycle Power Project for RRVUNL

at Dholpur, Rajasthan.

Petron Civil Engineering Pvt Limited (Petron)

Petron Civil Engineering Pvt. Ltd. is a privately held organization which

was formed in 1980. It is mainly involved in the civil construction works

in Industrial and Infrastructure Sector including Heavy Industrial

Construction in steel and concrete.

Few of the projects undertaken by Petron are as follows:

Thermal Power Plant, BHEL, Harduaganj, Uttar Pradesh

Thermal Power Plant, BHEL, Bhatinda, Punjab

Construction of Cement Plant for Madras Cement Ltd.,

Ariyalur, Tamil Nadu

Construction of Preheater, Gujarat Ambuja Cement Ltd.,

Darlaghat, Himachal Pradesh



MW Power Project

ERA Building Systems Ltd (Era)

Era Building Systems Ltd. is an engineering, construction and services

conglomerate with operations across the entire spectrum of

infrastructure development including power transmission &

distribution. ERA has successfully completed projects across various

sector i.e Power, Highways, Railways, Airports, Urban Infrastructure,

Refineries, Industrial Complexes, Commercial and Office buildings, etc.

Few of the projects undertaken by Era are as follows:

For Thermax, 3 projects at Savali, Vadodara

Bajaj Ecotech, Sugar Mills at Paliakalan (U.P.)

Civil works, L & T, Hazira

Civil Works, Videocon, Kashipur

K.K Construction Builders (KKCB)

KKCB started its operations in 1991. The company’s core competency

is in civil structures interiors, plumbing, electrical working, housing

complexes, institutional projects, development work including

infrastructure with road and bridges and heavy steel fabrication.

Few of the projects executed by KKCB are as follows:

Development of 440 KVA sub-station, Uttar Pradesh Elecricity

Board, Gorakhpur, Uttar Pradesh

Construction of cooling towers, switch yard, control room and

township for 4x300 MW Rosa Thermal Power Project (Reliance

Energy Limited), Shahjahanpur, Uttar Pradesh

Civil works of 27 MW co-generation plant (BHL), at Budhana,

Uttar Pradesh



MW Power Project

Toshiba Plant Systems & Services Corporation India Private

Limited (TPSCI)

Toshiba Plant Systems & Services Corporation India Private Limited

(TPSCI) is Engineering, Procurement and Construction company under

the flagship of Toshiba Corporation, Japan which has been active in the

development of power projects for the last sixty six years. The

company’s focus and core competence has been on the power

projects.

TPSCI was registered in India in December, 1998 and is wholly owned

by Toshiba Plant Systems & Services Corporation (TPSC) to further

strengthen the business interest of Toshiba Corporation in the thermal,

combined cycle, diesel based, hydro-electric and non-conventional

energy power plants, in India, Middle East and the South East Asia.

TPSCI has full-fledged technical support and access to the database of

TPSC developed through the principal company’s long and rich

experience from projects executed across the globe.

Few of the projects executed by TPSCI are as follows:

2 x 500 MW Anpara ‘B’ Thermal Power Plant at Sonebhadra,

Uttar Pradesh

2 x 125 MW Hydel Power Station, Ghatghar, Maharashtra

3 x 170 MW Teesta Stage-V, Hydro Power Project, Sikkim

4 x 225 MW Hydro Electric Project, Purulia, West Bengal

172 Combined Cycle Power Project, Vijjesswaram, Andhra

Pradesh

4 x 10.5 MW Hydro Electric Project (Modernization and

Renovation), Umiam, Meghalaya


http://www.toshiba-india.com/


MW Power Project


Bajaj Energy Private Ltd Project Information Memorandum 450 MW Power Project

12.7 Annexure VII: Projected Financials of Project

DSCR Calculations

(Rs. Crores)

ParticularsMar-

12Mar-

13Mar-

14Mar-

15Mar-

16Mar-

17Mar-

18Mar-

19Mar-

20Mar-

21Mar-

22Interest Payments 81.5 190.1 170.1 150.1 130.1 110.1 90.0 70.0 50.0 30.0 10.0Loan Repayments - 174.0 174.0 174.0 174.0 174.0 174.0 174.0 174.0 174.0 174.0Total Debt Servicing Liability 81.5 364.1 344.1 324.1 304.1 284.1 264.0 244.0 224.0 204.0 184.0

PBDIT + AAD 190.7 536.3 519.2 502.2 485.3 468.5 451.7 435.0 418.5 402.0 357.1

Less: WC Interest 6.4 17.2 17.3 17.5 17.6 17.8 18.0 18.2 18.4 18.6 18.5

Less: Current Tax 11.4 27.5 28.0 28.6 29.2 29.8 30.4 31.0 31.7 32.3 33.3Amount available for Debt servicing 172.9 491.6 473.9 456.2 438.5 420.9 403.3 385.9 368.4 351.1 305.3

DSCR 2.12 1.35 1.38 1.41 1.44 1.48 1.53 1.58 1.64 1.72 1.66

Minimum DSCR 1.35

Average DSCR 1.51



Profit & Loss Account

(Rs.

Crores)

Profit and Loss Statement

Mar-12

Mar-13

Mar-14

Mar-15

Mar-16

Mar-17

Mar-18

Mar-19

Mar-20

Mar-21

Mar-22

Revenue Sale of Power 393.5 982.5 980.7 979.5 978.8 978.8 979.5 980.8 982.8 985.5 990.2ExpenditureCoal Cost 176.7 461.7 473.3 485.1 497.3 509.7 522.4 535.5 548.9 562.6 576.7

Oil Cost 1.0 2.6 2.7 2.8 2.9 3.0 3.1 3.1 3.2 3.3 3.4

O& M Cost 25.1 63.8 67.5 71.3 75.4 79.7 84.3 89.1 94.2 99.6 105.3Total Expenditure 202.8 528.2 543.5 559.2 575.5 592.4 609.7 627.7 646.3 665.5 685.4PBDIT 190.7 454.3 437.2 420.2 403.3 386.5 369.7 353.1 336.5 320.0 304.8

InterestInterest on Loan 81.5 190.1 170.1 150.1 130.1 110.1 90.0 70.0 50.0 30.0 10.0Interest on Working Capital 6.4 17.2 17.3 17.5 17.6 17.8 18.0 18.2 18.4 18.6 18.5Total Interest 87.9 207.3 187.4 167.5 147.7 127.8 108.0 88.2 68.4 48.6 28.5PBDT 102.8 247.0 249.8 252.7 255.6 258.6 261.7 264.9 268.1 271.4 276.3

Depreciation 45.5 109.2 109.2 109.2 109.2 109.2 109.2 109.2 109.2 109.2 109.2PBT 57.3 137.8 140.6 143.5 146.4 149.4 152.5 155.6 158.8 162.2 167.1

Tax

Income Tax 11.4 27.5 28.0 28.6 29.2 29.8 30.4 31.0 31.7 32.3 33.3

Deferred Tax 7.6 18.3 18.7 19.1 19.5 19.8 20.3 20.7 21.1 21.5 22.2

Total Tax 19.0 45.8 46.7 47.7 48.6 49.6 50.6 51.7 52.8 53.9 55.5PAT 38.3 92.0 93.9 95.8 97.8 99.8 101.8 103.9 106.1 108.3 111.6



Balance Sheet

ParticularsMar-

10Mar-

11Mar-

12Mar-

13Mar-

14Mar-

15Mar-

16Mar-

17Mar-

18Mar-

19Mar-

20Mar-

21Mar-

22Liabilities Shareholders Funds

Equity 438.6 439.5 580.0 580.0 580.0 580.0 580.0 580.0 580.0 580.0 580.0 580.0 580.0Reserves & Surplus - - 38.3 130.3 224.2 320.0 417.7 517.5 619.3 723.2 829.3 937.6

1,049.2

Net worth 438.6 439.5 618.3 710.3 804.2 900.0 997.71,097

.51,199

.31,303

.21,409

.31,517

.61,629

.2Loan FundsLong term borrowings -

1,195.7

1,740.0

1,566.0

1,392.0

1,218.0

1,044.0 870.0 696.0 522.0 348.0 174.0 (0.0)

Working Capital Borrowings - - 54.7 146.1 147.3 148.5 149.9 151.4 153.0 154.7 156.5 158.4 157.8

Sub Total -1,195

.71,794

.71,712

.11,539

.31,366

.51,193

.91,021

.4 849.0 676.7 504.5 332.4 157.8Deferred Tax Liability - - 7.6 25.9 44.6 63.7 83.1 103.0 123.2 143.9 165.0 186.5 208.7Deferred Revenue - - - 82.0 163.9 245.9 327.9 409.9 491.8 573.8 655.8 737.8 790.0Total Liabilities 438.6

1,635.3

2,420.5

2,530.3

2,552.0

2,576.1

2,602.7

2,631.7

2,663.4

2,697.6

2,734.6

2,774.4

2,785.8

AssetsFixed Assets



ParticularsMar-

10Mar-

11Mar-

12Mar-

13Mar-

14Mar-

15Mar-

16Mar-

17Mar-

18Mar-

19Mar-

20Mar-

21Mar-

22

Gross Block - -2,271.

32,271.

32,271.

32,271.

32,271.

32,271.

32,271.

32,271.

32,271.

32,271.

32,271.

3Less:Depreciation - - 45.5 154.8 264.0 373.3 482.5 591.8 701.0 810.2 919.5

1,028.7

1,138.0

Net Block - -2,225

.82,116

.52,007

.31,898

.01,788

.81,679

.51,570

.31,461

.11,351

.81,242

.61,133

.3

CWIP 438.61,635.

3 - - - - - - - - - - -

Sub Total 438.61,635

.32,225

.82,116

.52,007

.31,898

.01,788

.81,679

.51,570

.31,461

.11,351

.81,242

.61,133

.3Currents Assets, Loans & Advances

Inventories - - 21.9 57.3 58.7 60.2 61.7 63.2 64.8 66.4 68.1 69.8 71.5

Debtors - - 48.5 131.2 131.0 130.9 130.8 130.8 130.9 131.0 131.3 131.6 128.5Maintenance & Spares - - 0.4 1.0 1.1 1.2 1.2 1.3 1.4 1.5 1.5 1.6 1.7Cash & Bank Balances (including cash in DSRA) - - 123.9 224.2 353.9 485.9 620.2 756.9 896.0

1,037.7

1,181.9

1,328.8

1,450.7

Current LiabilitiesNet Current Assets - - 70.8 189.5 190.8 192.2 193.7 195.3 197.0 198.9 200.9 203.0 201.8Total Assets 438.6

1,635.3

2,420.5

2,530.3

2,552.0

2,576.1

2,602.7

2,631.7

2,663.4

2,697.6

2,734.6

2,774.4

2,785.8



Cash flow Statement

FY Ending March 31,

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Cash Flow from Operating Activities

PBT - - 57.3 137.8 140.6 143.5 146.4 149.4 152.5 155.6 158.8 162.2 167.1Add:Depreciation - - 45.5 109.2 109.2 109.2 109.2 109.2 109.2 109.2 109.2 109.2 109.2

Add: AAD - - - 82.0 82.0 82.0 82.0 82.0 82.0 82.0 82.0 82.0 52.3Add:Interest Paid - - 87.9 207.3 187.4 167.5 147.7 127.8 108.0 88.2 68.4 48.6 28.5Operating Profit before Working Capital Changes - - 190.7 536.3 519.2 502.2 485.3 468.5 451.7 435.0 418.5 402.0 357.1Adjustment for Working Capital

Add/(Less)Change in Inventory - - (21.9) (35.3) (1.4) (1.5) (1.5) (1.5) (1.6) (1.6) (1.7) (1.7) (1.7)Change in Maintenance & Spares - - (0.4) (0.6) (0.1) (0.1) (0.1) (0.1) (0.1) (0.1) (0.1) (0.1) (0.1)Change in Receivables - - (48.5) (82.7) 0.2 0.2 0.1 0.0 (0.1) (0.2) (0.2) (0.3) 3.1

Sub Total - - (70.8) (118.7) (1.3) (1.4) (1.5) (1.6) (1.7) (1.9) (2.0) (2.1) 1.2Less: Income Tax Paid - - 11.4 27.5 28.0 28.6 29.2 29.8 30.4 31.0 31.7 32.3 33.3Net Cash from Operating

- - 108.4 390.1 489.9 472.2 454.6 437.1 419.6 402.2 384.8 367.6 325.1



FY Ending March 31,

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Activities

Cash Flow from Investing ActivitiesPurchase of Fixed Assets (438.6)(1,196.7)(636.0) - - - - - - - - - -Net Cash from Investing Activities (438.6)(1,196.7)(636.0) - - - - - - - - - -Cash Flow from Financing Activities

Infusion of Equity 438.6 0.9 140.5 - - - - - - - - - -Add:Proceeds from Long term borrowings - 1,195.7 544.3 - - - - - - - - - -Add:working Capital Borrowing - - 54.7 91.4 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 (0.6)

Transfer to DSRA - - 91.0 (5.0) (5.0) (5.0) (5.0) (5.0) (5.0) (5.0) (5.0) (5.0) (46.0)Less:Repayment of Loan - - - 174.0 174.0 174.0 174.0 174.0 174.0 174.0 174.0 174.0 174.0Less:Interest Paid - - 87.9 207.3 187.4 167.5 147.7 127.8 108.0 88.2 68.4 48.6 28.5Net Cash from Financing Activities 438.6 1,196.7 560.5 (284.8) (355.2) (335.3) (315.3) (295.4) (275.4) (255.5) (235.6) (215.7) (157.1)Increase/ - - 32.9 105.3 134.7 137.0 139.3 141.7 144.1 146.7 149.2 151.9 167.9



FY Ending March 31,

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Decrease in cash balanceOpening Cash Balance - - - 32.9 138.2 272.9 409.9 549.2 690.9 835.0 981.7 1,130.9 1,282.8Closing Cash Balance - - 32.9 138.2 272.9 409.9 549.2 690.9 835.0 981.7 1,130.9 1,282.8 1,450.7Cash Balance in DSRA - - 91.0 86.0 81.0 76.0 71.0 66.0 61.0 56.0 51.0 46.0 -Closing Cash Balance including DSRA - - 123.9 224.2 353.9 485.9 620.2 756.9 896.0 1,037.7 1,181.9 1,328.8 1,450.7


Documents

Bepl 450 Mw Im_final (1)