Maharashtra Vidyut Nigam Limited

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Maharashtra Vidyut Nigam Limited (MVNL), a subsidiary of Gupta Corporation, signed memorandum of understanding with Government of Maharashtra to set up a 10MW biomass based cogeneration power plant at Deoli MIDC in Wardha district of Maharashtra. Environmental clearance was obtained in 12th July 2010. The EPC contract was awared to Cethar Vessels Limited in April 2009. The output from the project would be fed through the 132kV Deoli substation to the Northern, Eastern, Western and North Eastern (NEWNE) grid of India. MVNL would bear the cost of project switchyard and interconnection facilities at the site up to the point of energy metering point and MSETCL would bear the cost of transmission lines and associated facilities beyond the energy metering point of MSETCL substation at MIDC. The primary fuel for the projeact would be 100% biomass - a mix of Cotton Stalk (80%); Soyabean Stalk (10%), and Red gram Stalk (10%).The project would use only biomass over the life of project except the use of coal during start-up and emergency situations of unavailability of biomass fuel or given quality. Based on MERC’s (regulator) recommendation and the GCV of biomass envisaged to be used, the fuel price should be in the range of INR 1110 to INR 1330/MT. MERC had fixed a cost of INR 315 /MKcal or INR 2065/MT. MERC in their tariff order dated 8th August 2005 had recommended an annual biomass price escalation of 5%. MVNL signed a power purchase agreement with Reliance Energy Trading Limited (RETL) on 13th June 2008. As per the Power Purchase agreement, the tariff at US$ 0.084/kWh (INR 4.90/kWh @58.6 INR/USD) was fixed for the block commencing from the date of commissioning till 31st December 2012. Hence the tariff at Rs. 4.90/kWh had been considered from the date of commissioning to 31st December 2012. After that considering the fact that the PPA states that the tariff would not be less than the tariff recommended by MERC, tariff at Rs.4.98/kWh (which Was MERC recommended tariff in the tariff order dated 14th July 2010) was considered.An annual escalation of 1.01% was considered. All transmission charges, transmission losses and other open access charges beyond the Delivery Point shall be borne by RETL. The transmission losses beyond the delivery point would be borne by RETL. The losses till the delivery point would be borne by MVNL. Financial closure took place on 8th October 2013. The estimated cost of the project at the time of financial closure was USD 9.5mn (INR 556.6 mn @58.65 INR/USD).The debt to equity ratio for the project was 57/43. Financing comprised of a 10-year term loan of USD 5.4mn (INR 318.8mn) and sponsor equity of USD 4.0mn (INR 237.8mn). The term loan was priced at 325 basis points over Yes Bank's base rate. Yes Bank was the sole arranger for the loan. Construction of the project was started in June 2009 and was expected to be completed by January 2011.The plant was commissioned in September 2012.