Amravati Power Transmission Company Limited

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In July 2010, Indiabulls Power Limited (IPL) had formed Amravati Power Transmission Company Limited (APTCL), a joint venture company with Maharashtra State Electricity Transmission Company Limited (MSETCL) to build,own and operate a transmission system/network for evacuation of power generated by 1350 (5x270) MW thermal plant (phase I) of Indiabulls Power Limited at Amravati, Maharashtra. IPL held 74% and MSETCL held 26% of the equity capital of the JV Company. The project included (a) 400 KV D/C Quad Moose Amaravati TPP- Akola S/S Transmission line. (b) LILO of 400 KV S/C Akola to Koradi Transmission line at Amravati TPP,and (c) 2 Nos. 400 KV line bays at MSETC Akola-I Sub- station. The proposed project was a part of the Maharashtra Intrastate Transmission System network plan. The Amravati-Akola transmission line was approximately 104kms. APTCL had received MSETCL’s approval for this project. APTCL had entered into a transmission development agreement with IPL Amravati Power Plant (“TDA”) for the development of transmission systems and networks for supplying power generated by IPL to the state transmission system. APTCL also entered into a bulk power transmission agreement with IPL (Amravati) and MSETCL (“BPTA”) for evacuating the power generated by the power plant. The BPTA was valid for a period of 25 years from the date of execution or for the period of the transmission license whichever was longer. The Maharashtra Electricity Regulatory Commission on 30th December 2010 had issued a transmission license, valid for 25 years, to APTCL for establishing transmission lines as envisaged in the TDA. As per BPTA, APTCL had the responsibility to procure and maintain all the consents required to erect the tranmission assets and to maintain and repair the transmission system as required by BPTA. IPL (Amravati) and other transmission system users of Maharashtra Intra State Transmission System (“InSTS”) would pay transmission tariff in accordance with the tariff orders issued by MERC from time to time. Amravati Power Transmission Company Limited (APTCL) was awarded the license to construct this transmission project on a negotiated basis. As the said transmission lines had not been identified for development under the Competitive Bidding Guidelines issued by the Ministry of Power, IPL (Amravati) had applied for the grant of Transmission License for development and operation of the proposed transmission project. MERC (State Regulator) held that all the expenditure made on the Intra-State Transmission system was finally recovered from the Transmission System Users (TSU),as per the “pooled cost” concept. Hence, it was essential to take every step to optimize on the costs to be incurred in development of the projects. Hence MERC instructed that APTCL would be following a transparent competitive bidding process for development of the transmission project to ensure that the cost of the project was the most reasonable and most competitive. The project attained financial closure on 20th February 2014. The project was financed at a debt/equity ratio of 75/25. The cost of the project was estimated to be US$ 45.3mn (INR 2761.5mn @61 INR/USD) at the time of financial closure. Financing comprised a 12-year term loan of USD 33.9mn (INR 2071.1mn) and sponsor equity of USD 11.3mn (INR 690.4mn).The term loan was arranged by Power Finance Corporation Limited (INR 1380.8mn) and Rural Electrification Corporation Limited (INR 690.3mn). The transmission line was commissioned in April 2014.