FLOW CHART OF FINANCIAL MODEL

INPUT MODULE

Existing Cost Structure &

Assumptions Generation Expansion Plan Transmission Expansion Plan DISCO's Future Cost KESC
Revenue (2010)

Inflation rate for fuels Hydel Cost Structure Annual Capital Expenditure Hydel/Thermal Capital Expenditure Transmission DISCO's Cost
Inflation rate on O&M Thermal Cost Structure O&M Hydel/Thermal Capital Expenditure DISCO Transmission Distribution Cost O&M
Inflation rate on Capital Expenditures IPPs Cost Structure Fuel(Gas/Oil/Coal) O&M Cost of New Investment: Commercial Cost
Hydel Depreciation rate NTDC Existing Cost Annual Energy (GWh) Production Fuel wise NTDC(%) Interest
Thermal Depreciation rate DISCO's Cost Structure Annual Energy (GWh) Production Hydel DISCO(%) Administration Cost
NTDC Depreciation rate KESC Total Annual Energy(GWh) Production
DISCO Depreciation rate Revenue=Sales X Average Tariff Capacity Hydel(MW)
Financing: Subsidies Capacity Thermal Fuel(MW)
Debt/Equity Ratio (70/30)
Interest Rate (6%-8%)
Return on Equity (15%)
Losses at Transimission
Losses at Distribution
Annual Revenue Required (ARR)
Tariff Escalation

PROCESS MODULE

TURNING INVESTMENT COST INTO FINANCIAL COST

Development of Depreciation Expense and Blending Existing Plant Costs

Financing of Capital Expenditure Gross Fixed Assets Fuel Cost Revenue
Interest Expense with new Generation
Escalation Applied GFA Hydel= Debt+IDC+Equity Accumulated Depreciation
Hydel Loan Drawdown GFA Thermal= Debt+IDC+Equity Interest Expense GENCO Cost
Thermal Loan Drawdown GFA NTDC= Debt+IDC+Equity Depreciation Expense Hydel
NTDC Loan Drawdown Depreciation Expense Thermal NTDC Cost
Interest Depreciation Expense NTDC
Interest During Construction (IDC) DISCO Cost
Development of Assets (Hydel, Thermal, Transmission)
Equity Invested Profit
Investment= Debt+ Equity
Gross Fixed Asset= Debt+IDC+Equity Income Taxes

Return on Equity

OUTPUT MODULE

Total Assets Generation Cost NTDC Cost Tariff ARR

-Hydel Production Hydel - Power Transmission
-Thermal - Wheeling Cost Cost
-NTDC Cost of Hydel
DISCO Cost Tariff Escalation
Debt Value Production Thermal
KESC Cost Cost
Equity Value Cost of Thermal

Annual Capital Cost Annual Cost of Fuel

Average Cost of Production