OPGS Power Gujarat Private Limited

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In April 2007, the Gujarat Government, signed a MoU with OPGS Power Gujarat Private Limited (OPGL),a Special Purpose Vehicle (SPV) of OPG Energy Private Limited (OEPL), for development of a 300 MW (2x150 MW) coal based thermal power station in Bhadreshwar in Kutch district of Gujarat. OPGL had initially planned to setup a 270 MW (2 x 135 MW) coal based power plant but had subsequently revised its plant capacity to 300 MW (2 x 150 MW). The project was planned to be executed based on sub critical technology. The land required for the project was had been acquired. Water requirement would be met from state water utility as well as sea water. OPGL had received all major clearances like environment clearance, coastal clearance, chimney clearance etc. OPGL would be responsible for any transmission infrastructure to connect the power project to the designated state grid substation. The primary fuel for the project was domestic coal (expected to cater to about 70% of the requirement) while the residual 30% of the requirement was expected to be met by imported Indonesian coal. OPGL had fuel supply agreements with Indonesian coal supplier (which also catered to OEPL's other plants in India). OPGL had applied for coal linkage to South Eastern Coalfields Limited and Letter of Assurance (LOA) was in place. However the Fuel Supply Agreement was yet to be executed (supposed to sign the FSA with South Eastern Coalfields Ltd before December 30, 2013). OPGL had sought the intervention of the Project Monitoring Group (PMG) of the Cabinet Secretariat (Gov of India) to expedite the grant of FSA. OPGL had already entered into a contract with Bharat Heavy Electrical Limited (BHEL) for supply of BTG (boiler-turbine-generator) package on fixed price basis and major orders for balance of plant (BOP) packages have also been placed.Tata Power would provide Project Management Services to OPGL. The evacuation of the power from the project would be through the transmission networks of Gujarat Energy Transmission Corporation Limited (GETL- transmission agreement signed on 21 December 2010) Power generated was expected to be distributed to industrial users in the area, though it couldn't be ascertained if this project fell under the "group captive power project" scheme under existing power regulations. As on March 2014, PPAs had been signed for about 53% of the total capacity with group captive customers at tariffs linked to discom rates, with effective realization of around INR 5.7 per unit (USD 0.097/kWh) under prevailing tariffs in Gujarat. OPGL had also signed a PPA with Reliance Energy Trading Limited for the entire 300 MW of capacity - however this PPA didnot provide any minimum off-take or guaranteed realizations for OPGL. However the high grid tariff rates in Gujarat and power deficit scenario in neighboring states in Western India, offered a significant upside. The total cost of the project was initially estimated at INR 12820mn, however, following the increase in project scope (revised to 300MW from initial plan of 270MW) the total project cost had been revised to INR 16400mn. OPGL finally refinanced the approved term loans with a marginally lower project cost estimate. The estimated project cost at the time of revised financial closure was USD 276.6mn (INR 16210mn @ 58.6 USD/INR). The project reached financial closure on 20th November 2013 with a debt/equity ratio of 75/25. Financing comprised a 13-year 6-month term loan of USD 207.4mn (INR 12154.1mn) and sponsor equity of USD 69.1mn (INR 4051.4mn). The term loan facility was syndicated by Rural Electrification Corp Limited (RECL) and the lenders were REC, State Bank of Hyderabad and Punjab National Bank. As on December 2013, the financial progress achieved on the project was 71%, with most of the equity requirement for the project already brought in by OGPL. OGPL was well placed to meet the pending equity requirements in the project through the funds (GBP 57