Moser Baer Projects Private Limited (Madhya Pradesh)

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In July 2008, the Madhya Pradesh Government, signed a MoU with Moser Baer Projects Private Limited for development of a 2520 MW coal-fired thermal power plant in the district Anuppur in Madhya Pradesh. The project was planned to be executed in two phase - Phase-1 of 1200 MW (2X600 MW), and Phase-2 of 1320 MW (2X660 MW).Moser Baer was currently developing the 1st phase of 1200MW, through its Special Purpose Vehicle MB Power Madhya Pradesh Limited (MBPMPL).Water requirement of 5480 cum/hr would be sourced from Son river flowing at a distance of 6kms from plant.Water allocaton from Water Resources Department, Government of Madhya Pradesh had been obtained. Land requirement was 996 acres and acquisition had been completed. Environmental clearance had been obtained in November 2010.The EPC contract for phase 1 of the project had already been awarded to Lanco Infratech Ltd at a fixed price of INR 41000mn. Lanco had inturn placed order for Boiler-Turbine-Generator (BTG) package with Harbin Power Engg. Co. Ltd., China. Long Term Open Access had also been granted by PGCIL(Powergrid) in June 2010. The primary fuel for the project was domestic coal, the total requirement of which is estimated at 5.4 Million Tons Per Annum (MTPA). MBPL had received coal linkage from South Eastern Coalfield Ltd. (SECL) for the supply of 5.0 Million Tons Per annum (MTPA) coal [92% of total requirement]. Further, the company had applied for remaining 8% of coal required to SECL and LOA was expected in next few months. The power generated from the Phase-I of the project of 1200MW (net capacity of 1122MW after deducting the auxiliary power consumption of 78MW) was expected to be sold to entities including state electricity boards, state owned utility companies, power trading companies. As per the Implementation Agreement signed with GoMP on 1st December 2009, 35% of the net capacity (393MW) was reserved for Government of Madhya Pradesh; Madhya Pradesh Power Trading Corporation Limited (MPPTCL) had entered into a PPA for purchase of this share at 5% capacity at variable cost and 30% at tariff determined by CERC. For 400 MW capacity, MBPL had signed a long-term (25 years) PPA with PTC India Ltd. (PTC) with base tariff of INR 2.89 per unit.The PPA with PTC allows for increase in coal price by about 4% p.a. Hence, MBPL would have to bear the risk of sudden hikes in linkage coal, if any. The balance 329 MW capacity was untied and the company was planning to sell the same on merchant basis (short term market) The project cost was estimated to be approximately USD 1386.7 million (INR 62400mn @45 INR/USD). Financial close took place on 24th April 2011 at a Debt/Equity ratio of 75/25. Moser Baer financed this project through an equity contribution of USD 346.7 million (INR 15600 @45 INR/USD) and a debt of USD 1040 million (INR 46800mn @45 INR/USD). The debt, arranged by Axis Bank and SBI Capital, had a door-to-door tenor of 14 years and was priced at a margin of 450bp over the SBI base rate. Repayment was in 40 quarterly instalments commencing 6months after COD (so a grace period of 4.0 years,which included the construction period of 3.5 years).The final maturity date was September 30 2024. Securities include a first charge on project assets and a pledge of a 51% share of the borrower, as held by the sponsor. Lenders were led by Axis Bank with INR 2340mn and SBI with INR 1890mn. Other banks were L&T Infrastructure Finance (INR 2500mn),State Bank of Patiala (INR 1000mn), and State Bank of Bikaner & Jaipur (INR 1000mn). Macquarie SBI Infrastructure Fund (MSIF) and the State Bank Of India (SBI) on behalf of the SBI Macquarie Infrastructure Trust would together invest USD 123.4mn (INR 5800mn @47 INR/USD) equity in Phase-I of Anuppur Thermal Power Plant.The residual equity of USD 208.5mn (INR 9800mn) will be funded by the Sponsor Mosear Baer Projects Private Limited. The construction for the Phase-I of the project started in october 2010 and was expected to be pro

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India

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