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October 2009
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Corporate Presentation October 2009 Contents Slide No. Disclaimer - - PDF document
Corporate Presentation October 2009 Contents Slide No. Disclaimer - - PDF document
Corporate Presentation October 2009 Contents Slide No. Disclaimer 3 Power Sector 04-07 Power Generation 04 Hydro Power Industry in India 05 Solar Power Industry in India 06 Madhya Pradesh Attractive Investment Destination 07
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Disclaimer
No representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained in this presentation. Such information and opinions are in all events not current after the date of this presentation. Certain statements made in this presentation may not be based on historical information or facts and may be "forward looking statements" based on the currently held beliefs and assumptions of the management of Entegra Limited (“Company” or “Entegra”), which are expressed in good faith and in their opinion reasonable, including those relating to the Company’s general business plans and strategy, its future financial condition and growth prospects and future developments in its industry and its competitive and regulatory environment. Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, financial condition, performance or achievements of the Company or industry results to differ materially from the results, financial condition, performance or achievements expressed
- r implied by such forward-looking statements, including future changes or developments in the Company’s business, its competitive environment and political,
economic, legal and social conditions. Further, past performance is not necessarily indicative of future results. Given these risks, uncertainties and other factors, viewers of this presentation are cautioned not to place undue reliance on these forward-looking statements. The Company disclaims any obligation to update these forward-looking statements to reflect future events or developments. This presentation is for general information purposes only, without regard to any specific objectives, financial situations or informational needs of any particular person. This presentation does not constitute an offer or invitation to purchase or subscribe for any securities in any jurisdiction, including the United States. No part of it should form the basis of or be relied upon in connection with any investment decision or any contract or commitment to purchase or subscribe for any securities. None of our securities may be offered or sold in the United States, without registration under the U.S. Securities Act of 1933, as amended, or pursuant to an exemption from registration therefrom. This presentation is confidential and may not be copied or disseminated, in whole or in part, and in any manner.
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Power Generation
- Generation has been leading the reform in the power sector
- Generation capacity has grown manifold from 1,712 MW in 1950* to
more than 150,000 MW**
- 17% of the total power is generated by the private sector
- Despite significant installed capacity addition India has a peak
demand deficit of 12%; energy deficit of 11%**
- Peak deficit has been growing year on year and is likely to continue
in the northern and the western region Policy Drivers
- Enabling policy and regulatory framework in power sector –
Electricity Act, 2003 and Accelerated Power Development and Reform Program (APDRP)
- Government encouraging private investments to realize targets -
100% FDI permitted in Generation, Transmission & Distribution
- Independent Regulators: Central Electricity Regulatory Commission
for Central PSUs and inter-State issues. Each State has its own Electricity Regulatory Commission
Installed Capacity (‘000MW) Deficit Overhang & Inefficiency Entails Massive Investments Peak Demand/Supply Deficit
2 5 13 28 66 150 212
50 100 150 200 250 1950 1960 1970 1980 1990 Present 2012
20 40 60 80 100 120 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2 4 6 8 10 12 14 16 18 20
Dem and ('000 M W) Supply ('000 M W) Deficit (RH S) (%)
Source: Power Sector at a Glance, July 09 CEA
Source: * Power Development Strategy, Power Ministry ** Power Sector at a Glance – Central Electricity Authority, Planning Wing – July 2009
Source: Power Sector at a Glance, July 09 CEA
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Hydro Power in India
- Hydro Power accounts for 25% of the total installed capacity
- Hydro Power Projects have a longer life and cost of generation is
free from inflationary effects after the initial installation
- Higher efficiency (~90%) vs. thermal (~35%) and gas (~50%)
- Govt. targets to add 15,627MW in the 11th Five Year Plan and
targets to reach potential generation of ~150GW by the 14th year plan
- Private sector contributes only 3.5% of existing hydro capacity
- Given govt. estimate of potential capacity ~150GW there is a huge
untapped opportunity for the private sector
- Entegra, Jaiprakash Hydro and NHPC are the three significant listed
players operating in India in this space
Fuel-wise installed capacity (in MW , July 09) Hydro Power – Huge Untapped Opportunity Opportunity – Hydropower ( in MW)
92893, 64% 36348, 25% 4120, 3% 12194, 8% Therm al Hydro Other Renewable* Nuclear
R egion Identified C apacity C apacity C
- mplete/
U nder C
- ns
truction C apacity to be developed R emaining Opportunity N
- rthern
53,395 20,490 32,905 62% Western 8,928 6,184 2,744 31% Southern 16,458 10,156 6,302 38% Eastern 10,949 5,260 5,689 52% N
- rth- Eastern
58,971 3,927 55,044 93% A lll India 148,701 46,017 102,684 69%
* Other Renewable means Wind, Small Hydro & Solar Source: Power Sector at a Glance, July 09 CEA * Source: Power Sector at a Glance, July 09 CEA Source: Hydro Power Policy, 2008, MoP
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Market Drivers & Challenges Emerging Trends Players
Solar Power in India
* Source: Ministry of New and Renewable Energy
- The total installed solar power capacity in India is 2 MW*
- Accounts for less than 0.01% of total installed renewable energy capacity
- Huge untapped potential - ~300 clear sunny days in a year- equivalent to over 5,000 trillion kWh per year*
- A target of 50 MW has been set for solar power generation during the Eleventh Five Year Plan*
- Drivers: Positive government policies, entry of new players in polysilicon market, abundant solar radiation in
India, export demand for solar equipment
- Challenges: High unit cost of solar energy, volatility in polysilicon prices, and dependence on raw material
imports
- Increase in M&A activity in renewable energy sector
- Domestic and international players are moving in solar energy space
- Public and private investments have increased in solar energy market
- Players include Tata BP Solar, Moser Baer PV Ltd, Reliance Industries, Entegra etc
- New players entering the solar space include Suzlon Energy
- Companies have increased their investments in solar technology and products
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Madhya Pradesh – Attractive Investment Destination
Madhya Pradesh (MP) has nearly 5.5 % of the total installed capacity of India with 8,274 MW* ~ 39% of installed capacity in the state is of hydro power (presence
- f large river – Narmada)*
Energy deficit of 17% in 2008-09* The demand for energy in the State is estimated to increase by 45% by the year 2011-12 (Source: MPIDC) The increasing energy shortages and peak deficit indicates a need for rapid increase in power generation capacity of the State Players such as Reliance (4,000MW), Essar (1,000 MW), Jaypee Group (1,000MW) and Entegra (400MW) have already invested in the state
Fuel-wise installed capacity (in MW , Mar 09) Projects lined up for the XIth Plan (2007-2012)
Project Agency Type Capacity (MW) Year Omkareshwar NHDC Hydro 520 2007-08 Birsinghpur - Ext MPGENCO Coal 500 2007-08 Amarkantak U-5 MPGENCO Coal 210 2008-09 Satoura Ext U-1,2 MPGENCO Coal 500 2011-12 Maheshwar (SMHPCL) Entegra Hydro 400 2010-11 Sasan UMPP U-1,2 Reliance Coal 1,320 2011-12
4524, 55% 273, 3% 263, 3% 3224, 39% Thermal Nuclear Other Renewable Hydro
* Other Renewable means Wind, Small Hydro & Solar Source: Power Sector at a Glance, July 09 CEA Source: MPIDC * Source: Power Sector at a Glance, July 09 CEA
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Entegra Limited EnnerGreen Solutions EnnerGreen Resources Hydro Power
(SMHPCL)
Solar Thermal Power EnnerGreen Projects EnnerGreen Products & Services
Entegra – Business Overview
- Entegra Limited (“Entegra”) is a pioneer in Renewable Energy (RE)
in India with an integrated approach to RE development, solutions and products
- Entegra is listed on Bombay Stock Exchange and National Stock
Exchange
- Entegra operates its business through two key business divisions:
– EnnerGreen Resources – Focus on development & generation
- f RE – Hydro and Solar Power
– EnnerGreen Solutions – provides customized RE solutions to commercial, industrial, public & residential infrastructure
- Shree Maheshwar Hydel Power Corporation Limited (“SMHPCL”) is
a subsidiary of Entegra and is in process of setting up 400 MW Hydro Power Project in Madhya Pradesh
- Other projects which Entegra is planning are:-
– Uttarakhand – 33MW Hydro Power project – Rajasthan – 10MW Concentrated Solar Power project
Entegra – Key Business Segments
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MW Corp Pvt. Ltd. MW Infra Developers Pvt. Ltd. Entegra Limited Shree Maheshwar Hydel Power Corp. Ltd. 1.7% 65% * 100% 68.7%
MW Corp was formed by Mr. Mukul Kasliwal and Mr. Warij Kasliwal
- ut
- f
the comprehensive reorganization of the erstwhile
- S. Kumars Group in December 2006
Other members of the promoter group 7.6%
*MW Infra also holds 135.6mn CCPS in Entegra which will be converted to equity at par The above shareholdings will be post merger of SKG Power, a promoter group entity, with Entegra
Group Shareholding Structure
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~55km ~41km Bargi Dam
Implemented 2 x 45MW = 90 MW
Indira Sagar Dam
Implemented 8 x 125MW = 1,000 MW
Omkareshwar Dam
Implemented 8 x 65MW = 520 MW
Maheshwar Dam
Under Implementation 10 x 40MW = 400MW
Sardar Sarovar Dam
Implemented 1,200 MW Project Highlight
- Only private hydro power project being commissioned in Madhya Pradesh
- First turbine is likely to be commissioned in first quarter of FY 11 and project is expected
to be fully commissioned third quarter of FY 11
- 100% Debt tied up
SMHPCL - Project Overview
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SMHPCL - Project Details
Project is a part of the overall Narmada Valley Development Plan for maximizing the water utilization plan Project Type: Hydro Power ( run of the river) – Peaking power station Project Location: Khargone district, Narmada River, Madhya Pradesh Capacity : 400 MW ( 10 units x 40MW) Expected Power Generation: 970 mn units (90% dependability) Expected Power Generation: 1,488 mn units (50% dependability) Project Cost: INR 27.6bn Project Awarded: S Kumars Ltd. (1992) Incorporation of SMHPCL:1993 ( incorporated as an execution arm of S Kumars Ltd) Construction commenced:1998 Execution History Project work stalled in year 2000 as Ogden Energy Asia withdrew its 49% equity commitment Ogden Energy’s exit was a part of their global strategy to exit Asia power business Construction resumed in late 2005 post submission of a revised restructuring package Current Status: First turbine is likely to be commissioned in first quarter of FY11 and project is expected to be fully commissioned in third quarter of FY11
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Other Technical Details
Project Configuration
10 x 40 MW run-of-the-river with storage of up to 28 mm3
Project Location
Located on Narmada river at a distance of 4 km from Mandleshwar town in Khargone district, Madhya Pradesh 80 km south of Indore, which is a major commercial centre in Madhya Pradesh and well connected by air, rail and road Project site on Dhamnod–Barwah state highway, situated at 20 km from NH3
Barrage
1,075 meter long concrete dam divided into two parts Spillway dam: 27 openings with hydraulically operated radial gates; these gates will normally be closed to store water Power Dam: 30 vertical gates (3 for each turbine), which will allow water to enter into the 10 turbines
Electro - Mechanical
10 vertical Kaplan type turbines of 40 MW each with 20 m design head 10 generators with rated output of 44.44 MVA and output voltage of 11 kV 10 main transformers –3 phase, 50 MVA step up 11 kV / 220 kV oil filled transformer
Major Contractors
Electro-mechanical-BHEL, Hydro-mechanical-SEW Construction Ltd, Civil Works –SEW and Prasad & Co. Techno-feasibility study –SMEC, Project Appraisal –PFC & SBI
Power Evacuation
To be handed over to MPEB at 220 kV through 19 bay (220 kV) switchyard located close to the powerhouse MPEB to establish transmission facility to evacuate power from the switchyard
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SMHPCL
Attractive Tariff and Incentive Structure
- Base level guaranteed RoE of 15.5%
- Potential to increase RoE up to 31.8% at
99% availability and generation of 1,370 MUs
Low Gestation
- Civil work almost complete and work on
turbines in progress
- Complete commissioning of the project by
Dec 2010
- Adequate water availability to generate
base power
Funding tie-up
- Project appraised by PFC as well as SBI
- Project being executed under project
financing arrangement with a Debt:Equity requirement of 70:30
- 100% Debt tied up
Multi-layered Secured Payment Guarantee Mechanism
- 35 years PPA with MP Electricity Board
- Three levels of Payment Security
- Letter of Credit
- Escrow Account
- State Government Guarantee
Project Strengths
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INR 19bn spent on the project (Total Project cost of INR 27.6bn) – The civil work for the project is almost complete – Out of the 27 gates, 9 have been installed – Work is in progress on all the ten turbines Rehabilitation & Resettlement (R&R) – As of Jun 2009, 583 Ha of land has been acquired (of the total requirement of 873 Ha) – SMHPCL has engaged MPEB to carry out R&R work on its behalf – 15 new villages with all civic amenities planned for the project (~ 10,000 people affected) – Plans to complete the R&R work by Dec 2009 Project commissioning – First turbine is likely to be commissioned in first quarter of FY11 – Project is expected to be fully commissioned in third quarter of FY11 Civil Construction Schedule Summary Excavation Schedule Summary
Low Gestation
Package N ame % completion as
- n June'09
Spillw ay 96.4 Pow er D am 94.9 Pow er H
- use
68.6 T ail R ace C hannel 43.5 Earth D am 51.7 Sw itch Yard 26.7 Package N ame % completion as
- n June'09
Approach C hannel 57.0 Spillw ay 100.0 Pow er D am 100.0 Pow er H
- use
100.0 T ail R ace C hannel 65.0 Left Earth D am 85.9 R ight Earth D am 20.9 Sw itch yard 100.0
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Attractive Incentive Structure – potential to generate ROE of 31.8% As per CERC norm, SMHPCL is assured a minimum ROE of 15.5% Above ROE is based on generation up to design level – 970m units Additional incentives in the PPA – Availability incentive – 0.7% incremental ROE for every 1% increase in utilization above 90% – Energy Incentive – if power generation exceeds design energy level ( capped at 50%) – At a 99% utilization and power generation > 1,370MW , 31.8% ROE could be achieved – SMHPCL is also eligible to claim tax exemption for 10 consecutive year from a block of 15 years 35 year PPA with Madhya Pradesh Electricity Borad with three level of Payment Security Letter of Credit Escrow Account State Government Guarantee
Attractive Tariff and Incentive Structure
Utilization (%) 91 92 93 94 95 96 97 98 99 100 Incremental ROE (%) 0.7 1.4 2.1 2.8 3.5 4.2 4.9 5.6 6.3 7
(Million U nits ) Incremental Incentives (% ) Total E nergy Incentives (% ) 970-1,070 4 4 1,070-1,170 +3 7 1,170-1,270 +2 9 1,270-1,370 +1 10
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Funding tie-up
Financing Project Cost Break-up
Particulars IN R Mn Land 110 Building and civ il w
- rks
6,580 Electro-mechanical w
- rks
6,418 H ydro-mechanical w
- rks
2,699
- Misc. fixed assets
90 T echnical Know
- H
- w
fees 229 R ehabilitation and R esettlement (R &R ) 1,941 Preliminary expenses 9 Preliminary inv estigation 168 Administrativ e expenses 865 Financial charges 1,047 Interest during construction period (ID C ) 8,773 Prov ision for contingency 250 Total C apital C
- s
t 29,179 R ev enue from sale of electricity
- 1,701
Margin money for w
- rking capital
127 Total Project C
- s
t 27,605 Total Funding R equired 27,605
Financial Plan & Structure IN R Mn %
- f Project C
- s
t E quity Entegra 7,199 26.1% FIIs/ Banks / O thers 1,082 3.9% Total E quity 8,282 30.00% D ebt Z C Bs 2,848 10.3% O FC D s 1,825 6.6% PFC 3,250 11.8% R EC 2,500 9.1% H U D C O 2,590 9.4% C entral Bank 1,800 6.5% State Bank of India 2,000 7.2% LIC 1,060 3.8% O ther D ebts 1,451 5.3% D ebt tied up 19,323 70.0%
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Execution Risk
- First turbine is likely to be commissioned in first quarter of FY11 and project is expected to be fully commissioned in third quarter of FY11
Cost escalation
- Significant progress on the project is achieved; no further cost escalation is expected
Water Availability
- Study by SMEC indicate that water is available for running the plant at base load throughout the year
- Sardar Sarovar dam is further downstream which has thrice the power generation capacity (1,200MW)
ROE consideration and achievability
- Base ROE of 15.5%
- Unique PPA - RoE attainable up to 31.8% based on energy and availability incentives
- PPA secured by three levels of payment security
Funding Commitment
- 100% Debt tied up
- Equity ~INR 5.6bn tied up and commitment of sub-debt in lieu of rest of the equity is in place
SMHPCL mitigates most of the major issues faced by other hydro power project
Mitigated Project Risks
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Dynamic Leadership Team
- Mr. Mukul S Kasliwal
Founder & Chairman Over 20yrs of diversified business experience Pioneer in the field of Energy and Infrastructure Development in India Serves on high powered institutions and committees of Govt. of India (Youngest business leader to be appointed to the National Manufacturing Competitiveness Council) Chairman, Board of Governors of Malaviya National Institute of Technology (MNIT), Jaipur and Chairman of the Advisory Board for the Centre For Indian Business at the University of Greenwich and Member of the Advisory Board at Simon School of Business MBA (Finance) from Simon School of Business, Univ. of Rochester, USA
- Mr. Warij A Kasliwal
Vice Chairman Over 30 years of diversified industry experience Involved in various aspects of Organizational and Human Resources Development B.Sc. and Associate of the National College of Rubber Technology, London
- Mr. V. K. Jain
Managing Director Over 25 years of diversified industry experience. Associated with renewable energy industry for last 10 years Occupied senior positions in various companies engaged in shipping, genetic engineering, paper manufacturing, chemicals & textiles Worked on large M&A transactions across various industry sectors Member of ICAI
- Mr. N. Ramakrishnan
Group CFO 30 years of experience in dealing with the financial services for the top business organizations in the country Worked at senior levels in Singer India, Philips India, Reliance Industries, Leo Burnett, Precision Fasteners Member of ICAI, ICSI & ICWAI
- Mr. Dennis Quinn
Director –Business Development Extensive experience in both the regulated and non-regulated electric utility industry and renewable energy development with over US$500mn of projects successfully operating worldwide Experience of 20 years with a leading US investor-owned integrated utility MBA from Oregon State University
- Ms. Sarika Patel Group
Director -Strategy & Corporate Finance Strong experience in technology advisory practice with focus on clean technology space. Leadership role in cross-border M&A with Grant Thornton, UK Worked as Director of Innovation & Sector Development with London Development Agency (LDA) MSc, LLB, Member of ICAI, Chartered Marketer
- Ms. Rekha
Jagdale Company Secretary Over 24 years of professional experience with Shree Maheshwar Hydel Power Corp, LIC Housing Finance and LIC LLB and FCS.
- Mr. M. Hudli President
–Corp. Fin Over 31 years of experience in the Banking & Corporate sector
- LLB. & CAIIB
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- Mr. M. L. Gupta
Managing Director- SHMPCL Project Over 39 years of experience in Hydro power sector Former Chairman –Tehri Hydro Power Development Corporation Limited. (April 1996 to Sept. 2004) Director Technical –Tehri Hydro Power Development Corporation Limited (Sept. 1994 to April 1996) General Manager and Chief Engineer NHPC from May 1980 to Sept. 1994
- Mr. S. R. Ganguly
President Project – SHMPCL Project Over 25 years of experience in Hydro power sector Worked with NHPC for more than 10 years at various capacities from inception to commissioning of Hydro Electric project Deputed abroad for various assignments & undergone professional training in various countries
- Mr. Vimal Kumar
- Sr. Vice President
EnnerGreen Resources, Business Development Over 18 years of work experience in Worked as Country-Manager for Hydro Tasmania (A Govt. of Tasmania Company from Australia) a consulting company in RE space Also worked for over 7 years with Greenspan Technology Pty Ltd (Australia)-A TYCO Company from Australia Heading the market development function for RE products, Systems, Products and Services B.Tech. (Gold Medalist)
- Dr. Abhaya Swarup
- Sr. Vice President –
EnnerGreen Solutions Strong experience in the Energy sector Worked with MP state Energy Development where he was involved in building and application of Renewable Energy Technologies for Rural Electrification in developing countries and Danfoss (I) as Engineer for Automatic Controls and Energy Conservation B.E. (Mech.), MBA and PhD; FIE
- Mr. Anant Wagh In-
charge -Project Implementation, EnnerGreen Solutions Strong experience of over 38 years in manufacturing various components including non-conventional energy systems Ex-Member on Advisory Committee, Ministry of Non-Conventional Energy Sources (“MNES”), New Delhi Member of Technical Committee for Non-Conventional Energy Source Recipient of `Renewable Energy Golden Award –1995’at the hands of Minister of Energy, Govt. of India Member of Govt. Delegations to various countries & presented papers on subject related to Non conventional energy
- Mr. AsadJafar
General Manager - Hydro Projects Over 20 years of experience in Project Management, Installation & Commissioning and Design Engineering Instrumental in obtaining CEA clearance for 3 Hydro Power Projects (99 MW, 300 MW and 280 MW) with Capital Fortunes Pvt Ltd B.Sc and Post Graduate Diploma in Business Administration
- Mr. B. D. Dubedi Sr.
Vice President -Hydro Projects Over 30 years of experience in Hydro power sector Worked with NHPC for more than 20 years in various capacities Deputed abroad on various assignments
Experienced Management Team
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