Jhabua Power Limited (Madhya Pradesh Power Project Phase I)

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Jhabua Power Limited (JPL), a company of Avantha Power & Infrastructure Limited (APIL), was created to implement Madhya Pradesh coal based Power Project (or Barela Gorakhpur Power Plant) a 1200 MW power plant. The power project was to be commissioned in two phases of 600 MW each for an aggregate capacity of 1,200 MW upon completion of construction. The project was initially proposed to be established in the district Jhabua in Madhya Pradesh, but the site was then changed to Seoni district due to benefits offered by the site in terms of proximity to coal blocks and water sources. For Madhya Pradesh Power Project Phase I, APIL and the Government of Madhya Pradesh (GoMP) executed the MoU on January 17, 2007. The implementation agreement, signed with the GoMP on January 14, 2008, indicated that JPL was to provide to the Government 5% of the net electricity generated by the project annually at energy charges to be determined by the appropriate electricity regulatory commission. Right of first purchase by Government of Madhya Pradesh to purchase electricity up to 30% of the aggregate capacity of the generating units for a period of 20 years at the rate approved by CERC or MERC. In January 2010, the GoMP indicated its in-principle expression of interest to purchase 30% of the aggregate capacity of Madhya Pradesh Power Project Phase I on a long term basis for 20 years. The total investment estimated for the Madhya Pradesh Power Project Phase I (600 MW) was Rs. 29,100 million (US$636 million), which was financed by a mix of debt and our contribution in the proportion of 75/25. The debt of Rs. 21,800 million was funded via a Rupee term loan, syndicated by a consortium of 15 banks. Axis Bank Limited was the lead arranger. The common loan agreement was executed on January 1, 2010. The remaining was equity contribution. The sponsor deployed Rs. 578.51 million in the Madhya Pradesh Power Project Phase I as on January 31, 2010. The total investment estimated for the Madhya Pradesh Power Project Phase II was Rs. 29,240 million (US$639 million), expected to be financed by a mix of debt and our contribution in the proportion of 75/25. In 2010, the project company applied for all clearances required by Phase II. As of December 2010, phase II have not secured financial closure The project company expected that the Madhya Pradesh Power Project Phase I to be commissioned by the fourth quarter of fiscal 2013 and that the Madhya Pradesh Power Project Phase II to be commissioned by the fourth quarter of fiscal 2014.