Kapil Mohan & Associates Hydo Power Pvt. Ltd.

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Kapil Mohan & Associates Hydo Power Pvt. Ltd. (KMHPL) was a Special Purpose Vehicle (SPV) for setting up hydro power projects. The first two projects were Beas Kund and Jirah projects which were allotted to KMHPL by the Government of Himachal Pradesh (H.P.) in 2001. Jirah project was a 4MW (2x2MW) run of river power plant and The Implementation Agreement was executed between the Government of H.P. and KMHPL in July 2006. For the Beas Kund project, the initial Implementation Agreement between the Government of H.P. and KMHPL was of 5 MW executed in June 2007. Subsequently, the scope was enhanced to 9 MW and a new Agreement was signed in October 2009. KMHPL was given the right to establish, own, operate and maintain the projects for a period of 40 years from the respective commercial operation date. The estimated project cost of Rs.1051.6 million (US$23 million) for both the projects is proposed to be financed at a debt to equity ratio of 2.34:1. The debt portion of Rs.73.72 crore was tied up and the equity of Rs.31.44 cr was to be brought by the promoters. Out of the overall project cost, KMHPL has spent Rs.46 cr till January 09, 2010, which was funded by debt of Rs.30 cr and equity of Rs.16 cr. Estimated financial closure date was June 2010. KMHPL was expected the commercial operation date for the Beas Kund project to be in July 2010 and the Jirah project in October 2010. KMHPL entered into a Power Purchase Agreement with Tata Power for sale of power @ Rs.4.00/Kwh for a period of 10 years from the commercial operation date for both the projects. However, the purchase of energy by Tata Power from KMHPL was without any 'take or pay' agreement on either side for any deficit in off take or supply of power with respect to the contracted quantum of power. KMHPL obtained the necessary clearances & approvals from the respective authorities for setting up of the hydro power projects. The Government of India was promoting small hydro power projects through its capital subsidy schemes & provision for income tax holiday under section 80 IA for 10 years and such incentives shall also be available to KMHPL.