Ind-Barath Utkal Power Company

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Ind-Barath Utkal Power Company (IBEUL) was created to set up and operate a thermal Project of 700MW (2X350 MW) at Sahajbahal village of Lakhanpur Tehsil, Jharsuguda District, Orissa State. Ind-Barath Utkal Power Companywas owned by Ind-Barath Power Infra Private Ltd. (79.4%) and state owned Power Trade Company India (PTC India) (20.6%) The investment agreement was signed in October 2009. IBEUL signed a memorandum of understanding with the State Government of Orissa on February 07, 2009. Under the terms of the memorandum, the State Government of Orissa had the right to purchase 14.0% of power generated by IBEUL in case captive coal blocks are allocated in Orissa or 12% otherwise. In addition, IBEUL was required to pay Rs. 0.06 for every unit of power produced to the state government’s environment management fund. Further, the State Government of Orissa agreed to provide assistance in securing land, coal linkages and necessary approvals and clearances. Balance was to be sold to state owned PTC India on merchant and long term basis. The power generated from the plant will be evacuated through one of the four 400 kV transmission line circuits of PGCIL. IBEUL and others have signed a long term open access agreement with Power Grid Corporation of India Limited under which IBEUL will receive open access for up to 616.00 MW of electricity for 25 years from the scheduled date of commissioning of the units. The transmission lines would be built at an estimated cost of Rs. 400.00 million, which has been included as a part of project cost. In addition, under the terms of the memorandum of understanding, IBEUL was also required to employ a certain number of Orissa residents at the project. The memorandum of understanding reserved 90.0%, 60.0% and 30.0% of the positions available, to Orissa residents, for unskilled/semiskilled labour, skilled labour and supervisory/managerial labour, respectively. IBEUL through its letter dated February 5, 2009 also committed to constructing a biomass power project of 20.0 MW generating capacity, in Orissa at an appropriate time. The aggregate land requirement for the project is 464 acres. Ind-Barath Energy (Utkal) Limited acquired and registered the required land for a total consideration of Rs.216.60 million as of April 30, 2010. IBEUL entered into a supply agreement with Cethar Vessels Limited, dated May 16, 2009, for a total value of Rs. 10,990.00 million. The scope of work under the supply agreement includes supply of all equipment, auxiliaries and accessories. IBEUL also entered into a service agreement with Cethar Vessels Limited, dated May 16, 2009, for a total value of Rs. 725.00 million. Fuel requirement for of the Utkal Project would be 11,500 metric tonnes of domestic coal per day. IBEUL received a letter of assurance from Mahanadi Coalfields Limited on July 8, 2009 for supply of 1.95 million tonnes per annum of Grade F coal towards a 450.0 MW power project. In addition, IBEL received a letter of assurance from Mahanadi Coalfields Limited on December 29, 2008 for supply of 1.12 million tonnes per annum of Grade F coal towards a 250.0 MW power project. Pursuant to a scheme of arrangement order issued by the Hyderabad High Court on December 26, 2008, the IBEL letter was transferred to IBEUL. The project estimated cost was INR 31,850 million (US$ 696.5 million). On March 29, 2010, sole book-runner and mandated lead arranger Axis Bank had closed an INR 23890m term loan facility for the now INR 31,850m project. Other participants in the loan were Andhra bank, Bank of Baroda, Bank of India, Corporation Bank, Jammu &Kashmir Bank, Karnatka Bank Ltd, Karur Vysya Bank Ltd, L&T Infrastructure Finance Co Ltd, Power Finance Corporation Limited, Punjab National Bank,UCO Bank, Union Bank of India, and United Bank of India. The loan included a 10-year repayment period, and an interest rate of 11.75%. The first 350.0 MW unit of this power project was expected to be commissioned by January 20