Tadas Wind Energy Limited

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In July 2011, IL&FS Renewable Energy Limited (“IREL”) set up a special purpose vehicle, Tadas Wind Energy Limited (“TWEL”) to develop 200.8MW wind power project across the states of Andhra Pradesh (50.4MW), Karnataka (100MW), and Gujarat (50.4MW). The 50.4MW Nallakonda wind farm in Anantpur district of Andhra Pradesh would involve building of 63 Enercon E53 wind turbines of 0.8MW each and the power would be evacuated to the Southern regional power grid. The 100MW wind farm at Haveri and Dharwad district in Karnataka would involve building of 125 Enercon E53 wind turbines of 0.8MW each and the power would be evacuated to the Southern regional power grid. The 50.4MW Lalpur wind farm in Jamnagar district of Karnataka would involve building of 63 Enercon E53 wind turbines of 0.8MW each and the power would be evacuated to the North-East-West-North-East (NEWNE) regional power grid. Tadas Wind Energy Limited had already executed PPA contracts with distribution entities in the States of Karnataka (Hubli Electricity Supply Company Limited) and Andhra Pradesh (Andhra Pradesh Central Power Distribution Company Limited) under the Renewable Energy Certificate (REC) route. The APPC (Average Power Purchase Cost) 25-year base feed-in tariff as per APERC (Andhra Pradesh State Regulator) tariff order, was US$ 0.088/Unit (INR 4.70 per unit @ 53.44INR/USD). The APPC (Average Power Purchase Cost) 10-year base feed-in tariff as per KERC (Karnataka State Regulator) tariff order, was US$ 0.069/Unit (INR 3.70 per unit @ 53.44INR/USD).The APPC (Average Power Purchase Cost) 25-year base feed-in tariff as per GERC (Gujarat State Regulator) tariff order, was US$ 0.079/Unit (INR 4.23 per unit @ 53.44INR/USD). The transmission charges would be paid by TWEL to the state transmission utility. Only 32 MW of project capacity of 200.8 MW had been registered till March 31, 2012 and for the units commissioned thereafter the GBI policy had been discontinued.However, the total capacity of 200.8MW was eligible for CDM benefits and the company had initiated the process with UNFCC. TWEL had entered into agreements with the wind turbine manufacturer in August 2011, Enercon India Limited, to develop (fixed-price EPC contract of INR 10940mn) and then operate and mainten these greenfield projects. Financial closure took place on 2nd March 2012.The total project cost at the time of financial closure was US$ 218.5mn (INR 11680mn @53.44 INR/USD).The debt equity ratio for the project was 75/25. Financing comprised of a 14-year 6-months term loan of US$ 163.9mn (INR 8760mn) and sponsor equity of US$ 54.6mn (INR 2920mn). The loan was priced at 12.25% unitl the end of construction period and 11.75% after the construction period and had a ballooning repayment schedule. IL&FS Financial Services Limited (IFIN) was the mandated lead arranger. The other participating banks included Canara Bank (1510mn), Oriental Bank of Commerce (1500mn), Indian Renewable Energy Development Agency (1250mn), Central Bank of India (1000mn), Dena Bank (1000mn), State Bank of Mysore (1000mn), State Bank of Patiala (1000mn), and Corporation Bank (500mn). As on September 7, 2012, 170.4 MW had already been commissioned, with the remaining 30.4 MW expected to be commissioned by September 30, 2012. The 50.4MW Andhra wind farm was commissioned by 20th July 2012 and 100MW Karnataka wind farm was commissioned by 30th September 2012.