TRN Energy Limited

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On 15 January 2010, the Chattisgarh Government, signed a MoU with TRN Energy Limited (TRN),a subsidiary (74%) acquired by ACB (India) Power Limited in may 2009, for development of a 600 MW (2x300 MW) coal based thermal power station in at Nawapara Village in the Raigarh district of Chhattisgarh. The project was planned to be executed in two phases of 300 MW each,based on sub critical technology. The total land requirement for project was approximately 548acres out of which about 160acres land was acquired which was adequate for the main island of the project. TRN was currently in the process of acquisition of the remaining land. TRN had been granted the allocation of 19 million cubic meters per annum of water from the river Kurket on December 3, 2009 by the Water Resources Department, Raipur. The river Kurket was at a distance of approximately 4 kilometers from the site. TRN intended to transport the water to the project site by a water pumping station and a pipeline network.TRN had received all major clearances like environment clearance, chimney clearance etc. TRN would be responsible for any transmission infrastructure to connect the power project to the designated state grid substation. The primary fuel for the Raigarh Power Project would be domestic coal. The expected consumption of coal for the project was 2.6 million tonnes per annum with an average gross calorific value of 3,800 kilo calories per kilogram of fuel at a Plant Load Factor of 80%.TRN had been granted a long-term coal linkage for 2.60 million tons per annum by the Standing Linkage Committee, Ministry of Coal under a letter of assurance from South Eastern Coalfields Limited on July 3, 2009. The raw coal would be transported by road from the mine to the project site, as the mine was at a distance of approximately 10 kilometers from the project site. TRN had entered into supplies and services contracts (both BTG and BOP) with BGR Energy System Limited for undertaking the engineering, procurement and construction of the Raigarh Power Project. TRN had entered into a power purchase agreement with Chhattisgarh State Power Trading Company Limited for sale of 5% of the net power generated at variable cost. In the event TRN was allocated captive coal block also in the State of Chhattisgarh for supply of coal to the Raigarh Project, then TRN would provide, on an annualized basis, to the Purchasing Entity 7.5% per cent of the net power.In addition, the Government shall have the first right to purchase power up to 30% of the aggregate capacity of the generating unit(s) for a period of 20 years, through its nominated agency, at the rate to be approved by the appropriate electricity regulatory commission. The manner in which offer would be made by TRN for the sale of power had been detailed in the IA. On 26 June 2012, TRN and PTC had entered into a power purchase agreement. The PPA was valid for a period of 25 years from the commissioning of the power project. Under the PPA, TRN had agreed to sell 390 MW gross capacity at a specified delivery point to PTC and PTC had agreed to purchase the said power for onward sale. PTC would sell and market the power for long term/ medium term sale basis through the tariff based competitive bidding process or on short term sale basis through the negotiated route. TRN expected to sell 250MW through a long-term PPA with a bidder appointed throug competitive bidding, with the balance to be sold through short-term agreements to third parties on a merchant basis. TRN also expected approximately 9% of the power generated to be lost through auxiliary consumption and transmission losses. TRN had been granted long-term open access by Power Grid Corporation through their Tamnar Pooling Station and entered into a bulk power transmission agreement with Power Grid Corporation. On 5th May 2012, the project attained financial closure at a debt equity ratio of 70/30. The estimated project cost at the time of financial closure was US$ 532.6mn (INR 2