Essar Power (Jharkhand) Limited 2 x 600 MW Thermal Power Plant June 2018

Project Overview

Essar Power (Jharkhand) Limited, (EPJL), is a wholly owned subsidiary of Essar Power Limited (EPL). The project was envisaged to increase the power generation capacity of EPL and under the original detailed project report consisted of 2 x 600 MW power generation capacity. However, owing to a design change with the implementation of Air Cooled Condenser (ACC) instead of Water Cooled Condenser (WCC) the power generation capacity was rerated to 1168 MW.

The project is based on primarily fuel sourced from domestic sources. The Company got allotment of Chakla coal block (located 4km from the project site) and Ashok Karketa Central coal block by Ministry of Coal (MOC), Government of India (GOI). Subsequently, this coal block has been de-allocated in line with the Hon’ble Supreme Court order dated Sept 24, 2014.

The Company has signed Power Purchase Agreements for sale of 877 MW of power and submitted draft PPA for sale of 152 MW of power with state electricity boards.

The project is overall 43% complete.

Project Location

Project Location

Village: Angarah, Post: Chandwa, District: Latehar Nearest Highway: NH 99 at 2.4 Km Nearest Railway Station: Tori at 8 Km Nearest Airport: Ranchi, 85 Km

Project Capacity Phase I - 1200 MW (output with ACC 1168 MW)1

Technology Sub Critical with Air Cooled Condenser

1Project is designed for 1800 MW, however no progress has been made for Phase II

EPJL – Salient Features

Land

Out of 708 acres of land required, 524 acres of land is already been acquired, 36

acres of land is government land, 67 acres of land is under acquisition

(agreement executed) and 81 acres of land is to be acquired

BTG Package Order for Boiler – Turbine – Generator (BTG) Package has been placed with Hardin

Power Engineering Company (HPECL) through Global Supplies (UAE) FZE.

ACC Package Air Cooled Condenser (ACC) has been placed with Harbin Air Conditioning Limited

(HAC) through Global Supplies (UAE) FZE.

EPC Contractor EPC Constructions India Limited (earlier known as Essar Projects (India) Limited)

Fuel

Chakala coal block and Ashok Karketa Central coal block allocated for the project

has been de-allocated in line with the Hon’ble Supreme Court order dated Sept.

24, 2014. The Company has applied for Long-term coal linkage. There are several

mines in the vicinity of Project.

Evacuation

The Power Evacuation system has been commissioned by Power Grid Corporation

of India Limited at a distance of 1.6KM from Project site. Long Term open Access

(LToA) to be signed with PGCIL for evacuation of power. The Company has already

relinquished LToA from April 12, 2017.

EPJL – Salient Features

Power Purchase Agreement

The Company has signed Power Purchase Agreements (PPAs) for sale of 877 MW of

power and submitted draft PPA for sale of 152 MW of power with state electricity

boards.

# Under dispute @ PPA for 13% installed capacity under ROFR with full charge to be executed.

Water The Company is implementing Air Cooled Condenser for the Project which shall

reduce the water requirements substantially to 15 MCM. Intake point for the

desired requirement is on Damodar River located at a distance ~14 kms.

Project Progress

Bihar State Power (Holding) Company Limited (BSPHCL)# PPA executed for sale of 450 MW

Bihar State Power (Holding) Company Limited (BSPHCL)# PPA executed for sale of 300 MW

Jharkhand State Electricity Board (JSEB) PPA executed for sale of 127 MW (12% at Variable Cost)

Jharkhand State Electricity Board (JSEB)@ Draft PPA submitted to JSEB for 152 MW (13% at Fixed + Variable Cost)

Category % Completion

Design and Engineering 77.30%

Procurement 64.94%

Construction 19.56%

Overall Progress 43.24%

!  Concreting of all the foundation rafts of the Boiler has been completed

!  Structural steel erection work of 2886 MT is complete out of 6128 MT.

!  Electrostatic precipitator (ESP) - 1 pedestal work has been completed.

!  Steam Turbine Generator (STG) – 1 foundation concreting work (Raft) is completed.

!  For Unit-1, FD Fan raft has been completed.

Status at Project Site – Construction

Unit 1 – Construction

!  Foundation concreting work is completed. 1474 MT of structural steel erection is done out of 5697MT.

!  Pedestal work and Bottom Ash hopper retaining wall has been completed.

!  For ESP-2, foundation concreting of 3257 M3 is completed out of total 5867 M3 of concrete work. ESP- 2 duct support raft is completed.

!  ESP Control Room pedestal work is completed. STG-2 foundation concreting work (Raft) is completed

Unit 2 - Construction

Status at Project Site – Construction

!  For Chimney, wind shield work has been completed. Chimney wind shield height of 272 m / 272 m has been achieved.

!  For Unit-1 ACC, concreting work for columns is under progress and civil work on 9 columns completed

!  For Coal mills, foundations rafts have been completed and pedestals work was under progress.

!  Fuel Oil pump house foundation is completed & area is ready for structural erection. LDO & HFO tanks foundation is completed & the bottom plate is placed on its position.

!  Fly Ash Silo-1 RCC work has been completed. Fly ash Silo-2 1st lift work has been completed and reinforcement work for 2nd lift is partially done.

!  Chemical House column work is completed. Sludge sump raft work is completed. Foundation works for all the three DM Water tanks has been completed.

!  O&M building structural erection work is completed. For Administration Building indoor finishing and carpentry work is almost complete. Outer Glass fitting is completed.

Other Construction Activities

Status at Project Site – Procurement & Supply of Materials

!  Out of the total 110295 MT of BTG materials to be supplied from China, 78073 MT of materials has been dispatched, 66208 MT of materials have been received at site and 11865 MT of materials have been received at Kolkata Port.

!  Major chunk of BTG material from China has been dispatched including Boiler/ESP Structural, Boiler Pressure Parts, Air/Flue Gas Ducting, ESP material etc.

!  Major equipment yet to be received from China include, turbine for unit 2, LP heaters, boilers feedwater pumps, generators & its auxiliaries etc.

!  Equipment that has been received by EPJL at site is stored in two custom bonded warehouse (measuring ~27 Acres and 6 Acres respectively)

!  Additional structural material and equipment (both loose cargo and containers) are stored at Kolkata Port under CFS maintenance maintianed by Balmer Lawrie, Concor, Century Ply and others.

!Site!Storage!&!Off!Site!Storage!Facili0es!

Project Costs and Cost Incurred

Consolidated Cost of Project Original Cost (INR Crores)1

Revised Cost (INR Crores)2

Land 122.00 122.00

Offshore and Onshore Contract 4,315.00 6,566.00

Total Hard Costs 4,437.00 6,688.00

Preliminary & Pre-Operative Expenses 242.00 396.00

Interest During Construction 701.00 2,432.00

Contingencies 192.00 192.00

Margin Money For Working Capital 128.00 128.00

Total Project Cost 5,700.00 9,836.00

Cost Incurred3 INR (Crores)

Land and site development 93.64

Offshore and Onshore Contract 2,821.29

Total Hard Costs 2,914.93

Preliminary & Pre-Operative Expenses 269.89

Interest During Construction 927.09

Forex Fluctuation 606.67

Cash and Bank Balance 39.33

Total 4,757.92

1 Based on the reports available with the Company 2 Estimated in 2016 on best effort basis, subject to revision

3 Based on the certificate available dated February 14, 2017 issued by M/s S.S. Kothari Mehta and Co, Chartered Accountants

Key Investment Highlights

98%# of capacity tied up through PPAs with JSEB

and BSPCL

Land for major construction work already

acquired. No delay envisaged due to land

acquisition issues

ACC reduces overall water needs from 72 MCM to 15

MCM thereby ensuring optimal plant operation

throughout the year

All key clearances for project implementation has been received and no delay is foreseen in respect of

clearances

Single location 1200 MW production capacity, with possible expansion upto

1800 MW

Reduced fuel logistics costs because of presence

of several operational coal mines in vacinity

Reduced O&M cost on account of ACC as water

treatment cost is decreased. Also reduced effluent treatment costs

Shortened lead time from current start of construction

to COD of 21 months#

Project vicinity has several coal mines with an annual

output of close to 55 MMTPA and coal reserves of more

than 900mn MT