Raghu Rama Renewable Energy Limited (RRREL)

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Raghu Rama Renewable Energy Limited (RRREL) developed an 18 MW biomass coal based power plant at Ramnad, Tamil Nadu. RRREL was owned by Ind-Barath Power Infra Private Ltd. (99.7%). The power plant was commissioned in October 2004. Power was sold to PTC India on merchant basis. Pursuant to an agreement dated April 6, 2009, as amended on October 22, 2009, RRREL sells 12.0 MW of power per month to PTC India at an average tariff rate of Rs. 5.90 per kWh. The agreement is valid until March 31, 2014, however the tariff is valid until May 31, 2010, after which it is subject to renegotiation. In case RRREL fails to meet 80.0% of its scheduled energy supply for a given month, RRREL must pay a penalty to PTC India for such a shortfall. Similarly, where PTC India does not utilise more than 80.0% of the scheduled energy supply for a given month, PTC India must pay a penalty to RRREL. RRREL must also provide a performance guarantee equivalent to 10.0% of the expected monthly charges in favour of PTC India and the current performance guarantee is valid until June 2010. RRREL also provides a rebate of 2.0% to PTC India for full payments received from PTC India within 10 days of invoicing. RRREL has submitted bids through PTC India in respect of the TNEB tender for new tariffs, beginning June 1, 2010. The project was registered under the United Nations Framework Convention on Climate Change (“UNFCCC”) and hence is eligible for generating and selling CERs under the Kyoto Protocol’s Clean Development Mechanism (“CDM”) project. The project cost was estimated to be Rs605 million (US$13 million). The project reached financial closure in 2003. The RRREL Power Project was funded through a combination of equity contributions from our Company and other investors and secured debt. As of March 31, 2010, the total equity investment made in RRREL was Rs. 181.27 million. The company secured financing of Rs. 423.20 million for the implementation of the RRREL Power Project, from two lenders, UCO Bank and Power Finance Corporation Limited.