A STUDY OF AN ULTRA MEGA POWER PROJECT - MUNDRA

ORIGIN

Launched under the Power for All by 2012 initiative by the Government of India (GOI) in 2005. To stimulate the required capacity addition, GOI launched an initiative for facilitating the development of coal based Ultra Mega Power Projects (UMPP) UMPPs have a minimum generation capacity of 4000 MW UMPPs provide cheaper power through economy of scale and use super critical technology. UMPPs are implemented through public private partnerships on build-own-operate (BOO) basis. The first UMPP of India, Mundra UMPP
Was awarded to Tata Power By a tariff based bidding process

LOCATION
1,200 hectare site is located in coastal area south of Tunda village in Kutch district of Gujarat. Nearest Highways:

SH-6 (6 Kms) NH-8A (15 Kms),

Nearest Seaport:

Mundra ~ 25 Kms Adipur ~ 85 Kms, Bhuj & Kandla ~75 Kms

Nearest Rail Head:

Nearest Airports:

COASTAL GUJARAT POWER LTD (CGPL)

Incorporated on 10th Feb. 2006 A special purpose vehicle (SPV) to implement the Mundra Ultra Mega Power Project The Mundra UMPP was awarded to Tata Power Tata Power acquired CGPL on 22 April 2007 The project has

5 units of 800 MW each generating a total of 4,000 MW using supercritical technology using 40,000 MT /day imported coal

Power is transmitted through six 400kV lines, installed by Power Grid

PROJECT FEATURES

Tata Power's 4000 MW Mundra UMPP fully commercial and generated 12440 MUs till 31st March 2013 Most efficient and environment friendly power plant Created 5,000 construction jobs Created 700 operations-oriented jobs Approx. 16 million domestic consumers in 5 different states of the country to benefit through the distribution system Set the record of commissioning total 3,200 MW at a single location in one year with an average gap of 3.5 months between units, a benchmark in the world Currently, Mundra UMPP has five units of 800 MW each Electricity produced from the plant is being supplied to five states

Gujarat, Rajasthan, Punjab, Haryana and Maharashtra.

POWER PROCURERS
Gujarat Urja Vikas Nigam Ltd. Maharastra State Electricity Distribution Company Ltd. Ajmer Vidyut Vitaran Nigam Ltd. Jaipur Vidyut Vitaran Nigam Ltd. Jodhpur Vidyut Vitaran Nigam Ltd. Punjab State Electricity Board Haryana Power Generation Corporation Ltd.

FINANCING

The Financing structure has won the Asia Pacific Power Deal of the year award from the prestigious Project Finance Magazine. The original cost estimate for Mundra project was Rs 17,000 crores. The debt to equity ratio for the plant's financing is 3:1 It has funding from

IFC IIFCL ADB Korea Eximbank BNP SBI 9 other lenders

FINANCING
CGPL received waiver from compliance of certain formal agreements up to June 30, 2013 CGPL has sought revision in certain terms of financing agreements In April 2013, Central Electricity Regulatory Commission (CERC) had asked entities procuring power from Mundra UMPP to form an expert panel to decide on compensating the company for higher cost of coal imports from Indonesia.

DEPRECIATION
Depriciation 2013 LAND BLDG PLANT BLDG OTHERS ROADS PL & EQ FURN & FIXT VEHICLES 124.09 315.21 113.33 33.02 2.42 0.29 2014 124.09 304.68 109.55 33.02 2.19 0.21 2015 124.09 294.50 105.89 33.02 1.98 0.16 2016 124.09 284.67 102.35 33.02 1.79 0.12 2017 124.09 275.16 98.93 33.02 1.62 0.09 2018 124.09 265.97 95.63 33.02 1.47 0.07 2019 124.09 257.09 92.44 33.02 9481.98 1.33 0.05 2020 124.09 248.50 89.35 33.02 8981.34 1.20 0.04 2021 124.09 240.20 86.36 33.02 8507.12 1.09 0.03 2022 124.09 232.18 83.48 33.02 8057.95 0.98 0.02

13129.53 12436.29 11779.65 11157.69 10568.56 10010.54

OFF EQUIP
LIGHTS TOTAL DEPRECIATION

2.37
0.25 747.30

2.15
0.23 708.09

1.94
0.22 670.95

1.76
0.21 635.76

1.59
0.20 602.43

1.44
0.19 570.85

1.30
0.18 9991.47 540.94

1.18
0.17 9478.88 512.59

1.07
0.16 8993.14 485.74

0.97
0.15 8532.83 460.30

13720.50 13012.41 12341.46 11705.70 11103.26 10532.41

PESSIMISTIC SCENARIO NPV & PAYBACK PERIOD

Year 0 1 2 3 4 5 6 7 8 9 10 11 Cashflow -18235 -2155 -1132 4054 4054 4054 4054 4954 4954 4954 4954 4954 NPV Present value of inflow Years Average yearly inflow Payback period (years) (Outflow/ average annual inflow) Discount Factor @ 10.6% 1.000 0.904 0.818 0.739 0.668 0.604 0.546 0.494 0.447 0.404 0.365 0.330 Discounted cashflow -18235 -1948 -925 2996 2709 2449 2215 2447 2213 2001 1809 1636 -633 15966 10 1597 11

MOST LIKELY SCENARIO NPV & PAYBACK PERIOD

Year 0 1 2 3 4 5 6 7 8 9 10 11 Cashflow -18235 -2155 -1132 4362 4362 4362 4362 5319 5319 5319 5319 5319 NPV Present value of inflow Years Average yearly inflow Payback period (years) (Outflow/ average annual inflow) Discount Factor @ 10.6% 1.000 0.904 0.818 0.739 0.668 0.604 0.546 0.494 0.447 0.404 0.365 0.330 Discounted cashflow -18235 -1948 -925 3224 2915 2636 2383 2628 2376 2148 1942 1756 900 17379 10 1738 10

OPTIMISTIC SCENARIO NPV & PAYBACK PERIOD

Year 0 1 2 3 4 5 6 7 8 9 10 11 Cashflow -18235 -2155 -1132 4671 4671 4671 4671 5684 5684 5684 5684 5684 NPV Present value of inflow Years Average yearly inflow Payback period (years) (Outflow/ average annual inflow) Discount Factor @ 10.6% 1.000 0.904 0.818 0.739 0.668 0.604 0.546 0.494 0.447 0.404 0.365 0.330 Discounted cashflow -18235 -1948 -925 3453 3122 2823 2552 2808 2539 2295 2075 1877 2436 18794 10 1879 10

SENSITIVITY
PAT in different scenarios

2014
Pessimistic

2015
3345.43

2016
3382.57

2017
3417.76

2018
4351.73

2019
4383.31

2020
4413.22

2021
4441.57

2022
4468.42

3306.22

Most Likely

3615.10

3654.31

3691.45

3726.64

4716.77

4748.35

4778.26

4806.61

4833.46

Optimistic

3923.98

3963.19

4000.33

4035.52

5081.81

5113.39

5143.30

5171.65

5198.50