funding in india hydro power ,arunachal pradesh
Submitted by atinkamble on Sat, 2011/01/15 - 17:59.
EXECUTIVE SUMMARY OF BUSINESS PLANF OF ARTI POWER & VENTURE PVT LTD-(APVPL)
EXECUTIVE SUMMARY OF BUSINESS
Introduction
While the power sector in India has witnessed a few success stories in the last 4-5 years, the road
that lies ahead of us is dotted with opportunities along with innumerable challenges that result
from the gaps that exist between what’s planned versus what the power sector has been able to
deliver so far. Considering current scenario of power generation India, out of the overall installed
capacity of 152 GW, the share of central and state utilities stands at 49.8 GW and 76.6 GW,
respectively; and that of private sector stands at 25.8 GW. Even, of the 78.7 GW planned capacity
additions during the 11th five-year-plan, central and state utilities together are estimated to add
nearly 63.7 GW. Aided by the ambitious plan to add around 78.7 GW of additional generation
capacity in the 11th plan by the year 2012, The hydropower generation contributes about 24 % of
the power generation and India plans to increase it by 40 % in coming 8 years time.
Seeing this enormous opportunity in this sector, particularly, Hydro power generation, Arti
Power & Ventures Pvt Ltd (APVPL) was set up in 2009 by Atin Kamble and Arti Kamble, with the
focus of becoming an independent power producer (IPP) by setting up a hydro power plant.
Project Concept
As a first step towards becoming an Independent power player, APVPL had applied for allocation in
Arunachal Pradesh and are allotted, two plants totaling 50 MW in Arunachal Pradesh by State
Government on negotiated route basis for 40 years of concession period on DBFOT basis.
The Project is a run-of-river grid connected hydroelectric project. It is located Siang
basin, the State of Arunachal Pradesh in India, power for sale to Arunachal Pradesh Electricity
Board, the state utility, under a long term power purchase agreements.
The current Statues of the project is the files are ready for signing of MOU with the state
government with all clearances, T.E.C clearances where all four directors of the power board give
approval to go ahead with the project on behalf of the state, and with forest clearances,
environmental clearances , as there is no habitation near site so no re-habitation is required , land is
allotted by government for the project, with all N.O.C. from the respective honorable MLA and MP of
the state.
Target Market
APVPL has planned to install 30 MW hydro power generation plant at Ashupani river bank
and 20 MW hydro power generation plant at Yammeng river bank. The target customer market is
the State Government of Arunachal Pradesh (70% of total generation out of which 12% is free of
cost) and 30% of the generated power will be sold to merchant units via National grid.
Competitive Scenario
Presently there is no proposed and/or approved power generation site by CEA upstream to
our plant location. Our proposed site over the river is 7 to 8 Km upstream to ongoing establishment
of NHPC 4000MW plant which is likely to be operational in next 4 to 5 years time. There is no
competitive threat to our plant location by which it can affect our power generation or water
supply. Currently, the state has installed hydel projects of about 35,190 MW, however, as per CEA,
the estimated future potential for hydro power generation is about 57,000 MW. Therefore, there is
till enormous scope for more power generation in this state and supply to other regions where
there is an acute power shortage. APVPL is already aiming for more allotment of project in the state.
Additional Stages of Project Development
Currently, APVPL will be signing the Memorandum of Understanding with the State
Government of Arunachal Pradesh in the month of January 2011. In the next stage, the DPR for
above mentioned two projects will be made along with detail financial modeling and technical
designs.
Further, the project SPV will be formed and concession agreement with the state
government will be signed. Later the financial closer will be achieved and with all due clearances
related the forest & environment, land acquisition; the project will be taken up for the construction.
One year of time duration is expected for the completion of this entire process.
Funding Requirement
The project proponent currently requires the equity investor for this project as JV partner
with an initial investment of 4.5 cr for the MOU and in further as equity of the project cost.
Preliminary Financial estimates
The hydro power plant of total 50MW, Ashupani (15X2) = 30 MW and Yameng – 20 MW is
proposed in Arunachal Pradesh on DBFOT basis for the period of 40 years concession. The
Preliminary total cost of the project is about Rs. 311 Cr, with the 30:70 debt equity ratio
The Equity IRR is estimated for 40 years concession period is about 19%. The proposed
project is expected to be constructed in 3 years and to be operational by 4th year from the start of
the project.
The Debt of Rs. 217 Cr will be taken for the period of 10 years excluding the period of one
year of moratorium. The Average DSCR is 1.9
Revenue Assumptions
The average revenue from 50MW power is estimated about Rs. 163. Cr /per year from the
262.8 million Kwh units per year. The assumed tariff is Rs. 4.5 / Kwh from the state government
(58% of total power generation) and Rs. 7.00/ Kwh from merchant units and REC revenue (30% of
total power generation). The PLF is considered at 60%. The tariff from state government is
assumed to rise by 6% after every five years and 8% from merchant and REC. 12% of the total
power has to be given free of cost to the state government.
Cost Assumption
2% escalation is assumed every year in O&M. while Civil works constitutes about 40% of the total
capital cost. The estimated direct and indirect cost per year is about Rs. 86 Cr.
Profit Scenario
The estimated Average EBITDA margins are about 47%.
Break-Even: the breakeven for the project is expected by 6th year from the date of operations.
Note: All the above financial estimates are made on the basis of preliminary information about the project. These financial estimates can be
made accurately once the DPR of the project is made and optimsation in the cost can be achieved.
The Long term Goals of APVPL
APVPL also has plans to add other power assets in its portfolio and become a full fledged
IPP. The company plans to add 200MW of gas based power plant in near Pune, 10 MW of Biomass
plant base on rice husk in Maharastra, 15MW of Windmill projects in, 5MW of solar plants each in
Maharashtra (Totaling 10MW) and the company is exploring possibilities of setting up gas based
power plant in different part of country as well. The company plans to have total of 250MW of
assets initiated by March 2012 and 500MW by March 2014.
The company under the leadership of the dynamic duo; Arti & Atin, has huge plans for
scaling up the business and creating an entity to reckon with in the power sector with prime focus
on renewable energy.
Intended Long Term Partnerships
APVPL intends to partner with professionally and technically sound EPC and power
equipment manufacturing companies which has expertise in power industry. In addition, APVPL
also look forward to join hands with funding agencies and private equity player to form holding
company for entry into infrastructure sector, by which APVPL can venture into other prospective
infrastructure sectors such as water, transportation etc.
Arti Power & Ventures Pvt Ltd (APVPL)
atin kamble,
9892174223
admin@artiagrofoods.com
info@artienterprises.co.in
info@artigroup.in
atin.kamble74@gmail.com
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