Dhariwal Infrastructure Private Limited

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In December 2009, the 600 MW merchant coal power plant developed by Dhariwal Infrastructure Private Limited(DIPL) at Chandrapur in Maharashtra reached financial closure. In August 28, 2009 Calcutta Electric Supply Corporation Limited (CESC), a 100% subsidiary of RPG Enterprises, acquired controlling stake in Dhariwal Infrastructure Private Limited(DIPL). The project had two units of 300 MW each. The primary fuel for the project was domestic coal. Dhariwal Infrastructure Private Limited 600MW power project was set up as an independent power producer with the revenue expected to come from a combination of long term and merchant power sale mix. CESC could sell 300 MW under PPA and another 300MW under merchant power. Details of the PPA tariffs and off-taker could not be ascertained. The project was expected to have a fuel cost of INR 1250/tonne (US$25.82/tonne) at the plant level, rising to INR 1500/tonne (USD 30.98/tonne) by FY13. This would translate into coal cost of roughly INR 1.3/kWh (US 2.68 cents/kWh) at the time of commissioning (at a calorific value of 3,300kCal/kg and heat rate assumption of 2,450kCal/kWh). The cost of generation worked out to INR 2.4-2.2 per kWh (US 4.54-4.96 Cents/kWh) with an assumption of INR 1.1-0.9/kWh of fixed cost. Even at an assumed tariff of INR 3/kWh (US 6.2 Cents/Unit), the project could generate equity IRR of ~24% in the merchant category and 19% for the PPA portion. The PPA would be based on Maharashtra Electricity Regulatory Commission (MERC) rules and regulations. The project cost was estimated to be approximately USD 599 million (INR 29000 million at 48.41 INR/USD). DIPL financed this project through an equity contribution of USD 149.7 million and a loan of USD 449.3 million at a debt/equity ratio of 75/25. Further details on financing were not known at the time of collection of this information. Construction had already started and commissioning was expected by FY 2013. Maharashtra Industrial Development Corporation on 22.2.2008 had allocated 200 hectares of land at Chandrapur (Tadli) industrial area. 100% of the land required for the project had been acquired (455 acres). State Water Resource Department (Govt. of Maharashtra) on 16.9.2008 had certified and entered into a water supply agreement for 19.27 MCM of water for proposed power project at 90% dependability. Project had received all clearances for the project from Ministry of Environment and Forests. Dhariwal Infrastructure had awarded the EPC contract to Punj Lloyd and the boiler turbine generator (BTG) contract had been awarded to Shanghai Electric Power Company. Coal linkage for project had been obtained from South Eastern Coal fields Limited (20.08.2008 LOA issued by SECL) for the entire project. In-principle clearance had been received from PGCIL for evacuating 300 MW power through Chandrapur sub-station.