Power Summit – 2008, Kathmandu
Developer’s perspectives;
Road Ahead for Hydro Power Project implementation in
Nepal
1 GMR : Leading Infrastructure Player
2 Airports
3 Power
4 Urban Infrastructure & Highways
5 Strong Management
7Requests to Govt. of Nepal
Issues in Project Development in Nepal
8
Key Highlights
6 Status of Project Development in Nepal
GMR Group : A Diversified Conglomerate
The GMR Group was established in 1976 and is a listed company on Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).
GMR Group has rapidly expanded into infrastructure and other businesses:
Airports
GMR Industries LtdSugar plant in Sankili in AP having cane crushing capacity of 5000 tonnes per dayConstructing an integrated Sugar complex in Haliyal having cane crushing capacity of 3500 tonnes per day
Corporate Social Responsibility
GMR Varalakshmi Foundation The Foundation has been working with communities in the quest of improving lives and livelihoods since 1991 It focuses on Education, Health, Hygiene and Sanitation, Livelihood and Empowerment and Community Development
The Group was also engaged in the Banking (ING Vysya) & IT (iGate), which were divested with shift in focus to infrastructure.
Agro based Business
Infrastructure Energy Roads
3,300 acres SEZ in Tamil Nadu 250 acres Aviation specific SEZ on
eastern side of Hyderabad Airport 250 acres Multiproduct General
SEZ on western side of Hyderabad Airport
GMR Infrastructure : India’s Leading Infrastructure Company
AIRPORTS
ENERGY
HIGHWAYS
URBAN INFRASTRUCTURE
Delhi Airport Development Hyderabad Airport
Istanbul Airport Modernization
Power Projects (10 Nos) Operational (3 Nos) Under development (7 Nos) Gross Capacity of 4097.625 MW
Road Projects (6 Nos; 444 km) Operational (2 Nos;152 km) Under construction (4 Nos; 292
km)
Flagship company of the GMR group
Infrastructure Developer, Owner & Operator of Airports, Power, Roads and SEZs
Assets with exclusive concessions ranging from 15-60 Years
Balanced Revenue Model – blend of stable and volume driven growth streams
Current Market capitalization of Rs. 2,900 bn (US$ 7 bn)
Net Revenue ( FY08) EBITDA ( FY08)
Total = Rs. 229 bn Total = Rs. 67 bn
Key financials
FY08: Gross Revenue – Rs. 270 bn; PAT(After MI) – Rs. 21 bn
GMR Infrastructure : A Compelling Growth Story
Key player in the Indian Infrastructure story: Over US$ 500 bn investments planned over next five years
PPP model to play significant role in the Infrastructure sector
GMR is well positioned to benefit from this large growth opportunity
Entry in the MSCI India index reinforces the company’s credentials in infrastructure development
1
Broad Based Infrastructure player: Significant presence across high growth sectors like airports, power and roads
Consistently enjoyed early mover advantage in all the business segments
2
Strong track record & established Player: Extensive experience of developing and executing projects
Established a reputation of reliability and timely project completion
3
Balanced revenue mix: Healthy mix of fixed and variable revenue streams across airports, power and roads
4
Strong Management Team: Experienced management team backed by strong global partnership
5
Significant Growth Opportunities: Plans to tap into new opportunities in India and Abroad in the infrastructure space
6
1 GMR : Leading Infrastructure Player
2 Airports
3 Power
4 Urban Infrastructure & Highways
5 Strong Management
7Requests to Govt. of Nepal
Issues in Project Development in Nepal
8
Key Highlights
6 Status of Project Development in Nepal
Passenger Traffic : Growth In Leading Indian Airports
Delhi Airport accounted for the highest growth in air passengers movement in the world in 2006 (Source: TOI)
PAX (Dom+Int) distribution in FY2008 (Total PAX = 116.87 mm)
Traffic Growth ( % )
Delhi and Hyderabad airports control 27% of the passenger traffic
FY 08
FY 07
Delhi International Airport: Modernization and development of one of the busiest airports in the sub-continent
Project OverviewProject Overview Consortium PartnersConsortium PartnersFinancing Plan (Phase I)Financing Plan (Phase I)
Delhi International Airport: Glimpses of Phase 1A
Domestic DepartureDomestic Departure
Domestic ArrivalDomestic Arrival
International TerminalInternational Terminal
Delhi International Airport: Glimpses of Phase 1B
Terminal 3Terminal 3
Hyderabad International Airport: Development of fastest growing airport in India
Project overviewProject overview
Hyd
era
bad
In
tern
ati
on
al
Air
port
Consortium partnersConsortium partners Catchment area
Source: AAI website, Company
Hyderabad
Emergence of Hyderabad as a major IT& ITeS destination
Centrally located with respect to India, South-East Asia and Middle East Catchment area of 75mm people
Growth in the passenger traffic - 40% over the past 2 years (2005-07)
First Airport in the country to get ‘Leeds’ Certificate for leadership in Energy & Environmental Design
Airside & Landside works contractor: Larsen & Tubro
Phase I Development completed on 23rd March 2008
Phase I Development completed . . . . . . Phase I Development completed . . . . . . Uniquely positioned to capitalize on the current growth
Uniquely positioned to capitalize on the current growth
Hyderabad International Airport: Glimpses
Hyderabad International Airport: Glimpses
Hyderabad International Airport: Glimpses
Sabiha Gokcen International Airport – Turkey Overview
Development plan for the Sabiha Gokcen International Airport in Istanbul
Development plan for the Sabiha Gokcen International Airport in Istanbul
New International
Terminal
Hotel
Car Park Area
Existing Int’l +
Domestic Terminal
Sabiha Gokcen International Airport
Sabiha Gokcen International Airport
1 GMR : Leading Infrastructure Player
2 Airports
3 Power
4 Urban Infrastructure & Highways
5 Strong Management
7Requests to Govt. of Nepal
Issues in Project Development in Nepal
8
Key Highlights
6 Status of Project Development in Nepal
GMR has successfully implemented and operationlized Power Assets
GMR Energy Limited
GMR Power Corporation Pvt. Ltd.
Vemagiri Power Generation Ltd.
Barge-mounted power plant
One of the largest operational Independent Power Producer (IPP) in Karnataka
ISO 14001, ISO 9001 and OHSAS 18001 certified
Evaluating the options for relocation Post PPA
ISO 14001 and OHSAS 18001 compliant
Dr. M.S. Swaminathan Award for being an environment friendly project
Company’s third Greenfield power project
PPA got extended from 15 to 23 years
Expansion plan for additional 700 MW capacity
Operating on diverted gas made available by GAIL as per the directive from Andhra Pradesh Power Coordination Committee
Facility Mangalore, Karnataka
Contracted Capacity 220 MW
Fuel Naptha
COD 2001
PPA7 Years till 2008; at 85% PLF Take or pay fixed charges
Facility Chennai, Tamil Nadu
Contracted Capacity 200 MW
Fuel Low Sulphur Heavy Stock
COD 1999
PPA15 Years till 2014; minimum offtake at 68.5% PLFTake or pay fixed charges
Facility Vemagiri, Andhra Pradesh
Contracted Capacity Contracted – 370 MWMerchant Sale – 17.625 MW
Fuel Natural Gas
COD 2006
PPA23 Years till 2029; at 80% PLF Take or pay of fixed charges
Strong pipeline of power projects under development
Power assets under developmentPower assets under development
Location Kamalanga, Orissa Chattisgarh Badrinath, UttaranchalCapacity 1,050 MW 1,050 MW 300 MWFuel Coal Coal HydroContract details Build Own and Operate for
25 years from Plant COD
Build Own and Operate for 40 years from Plant COD
Build Own and Operate for 45 years from Implementation Agreement
Expected CoD 2012 2012 2013Project status Land acquisition process started (Sec
6(1) notification completed. Coal linkage of 500 MW obtained and awaiting LOA from Mahanadi Coal Fields. Coal allocation namely “Rampia” & Dip Rampia” obtained for 1000 MW capacity. A Joint Venture Company has been formed by all the 6 allocattees of the coal block. EPC contract finalised with SEPCO. PPA: GRIDCO (upto 25%) and remaining with Power Trading Corporation ( PTC). IDFC has appraised the project and 50% of the loan has been sanctioned.
Signed MOU with the Govt. of Chhattisgarh. State is entitled to avail 5% of net energy and has the right to purchase up to 30% of the power for 20 years. State Govt. has recommended to the Ministry of coal for coal linkage. Pre feasibility report submitted and approved by Dept. of Energy. Draft DPR under review. Land Identified and state Govt. agreed to allot the same. Railway siding feasibility and location survey being carried out for coal transportation.
DPR finalised and submitted. Project capacity revised to 300 MW with Design Energy @ 1117 MU (PLF 42.50%). Clearance obtained from Ministry of Environment & Forests. SNC– Lavalin appointed for review of DPR, Tendering and detailed engineering. Concurrence of CEA – August 2008 To execute the implementation agreement after CEA concurrence on DPR.
Planned Action Completion of Land Acquisition Finalisation of coal linkage for balance 500 MW and signing coal supply Agreement. Award of NTP. Financial Close.
Initiate forest clearance and Land Acquisition. Signing Implementation Agreement.
Facility
Orissa (Coal)1 Chattisgarh (Coal)2 Uttaranchal (Hydro) 3
Strong pipeline of power projects under development
Power assets under developmentPower assets under development
7 Himachal Pradesh
(Hydro)
6 Arunachal Pradesh
(Hydro)
5
Location Talong, Arunachal Pradesh Bajoli Holi, Himachal Pradesh Upper Karnali, Nepal Upper Marsyangdi
Capacity 160 MW 180 MW 300 MW 250 MW
Fuel Hydro Hydro Hydro Hydro
Contract detailsRun of the River on BOOT basis for a concession period of 40 years from COD
Run of the River on BOOT basis for a concession period of 40 years from COD
Run of the River Build Own and Operate for 30 years from Plant COD
Build Own and operate for 30 years from Plant COD
Expected COD 2014 2015 2015 2015
Project status MOA with the State Govt. Colenco of Switzerland has been appointed as the principal engineer. Terms of Reference for Environment study approved by MOEF. Consultants have been appointed for carrying out Environment Impact Assessment and Environment Management Plan. GEL has offered 14% free power and 12% Equity in the SPV.
Upfront premium of US $ 20.5 Mn paid to the Govt. of Himachal Pradesh Pre – Implementation Agreement signed with the Govt. of Himachal Pradesh. DPR preparation is under process by in house engineering team. Royalty power offered : 12% (Yr 1-12), 18% (Yr 13-30), 30% (Yr > 30).
MOU signed between GMR – ITD consortium and Govt. of Nepal. Incorporated a company namely GMR Upper Karnali Hydro Power Limited. GEL has offered 12% free power and 27% free Equity to the Govt.of Nepal.
GMR owns 80% shares in Himtal Hydropower Company.GMR is taking care of all Project development activities and is preparing the DPR for the Project.
Nepal (Hydro)
8 Facility
Nepal (Hydro) 7
Towards securing fuel supply for Power Plants
Acquisition of 50% shareholding in Intergen
Intergen is a global Power generation Utility with over 12000 MW of Power
Projects in 5 different continents around the world
Over 8000 MW out of the above is operational in the following countries:
Mexico United Kingdom Holland Australia Philippines
GMR’s newly acquired footprint in all these diverse locations shall help achieving its burgeoning international growth ambitions
This is the largest international acquisition by an Indian Co. in the Power Utility sector.
This acquisition has catapulted GMR as the largest power generation company from India
GMR has acquired 5% stake in Homeland Mining and Energy, a South African Subsidiary of Homeland Energy Group Ltd, Canada
GMR has the option to acquire additional 45% stake of Homeland South Africa.
Homeland South Africa owns Mining Licenses for Kendal (74% share - Reserve 34m ton), Eloff (50% share with option to increase to 74% - Reserve 382m ton) and North Field (100% share – Reserve 1m ton ) with total reserves of 417m ton.
Production from Kendal mine would be 1.8m tpa. Eloff mine would produce 6m tpa in phase 1 which would increase to 12m tpa in phase 2.
Coal mines in South Africa and Indonesia
Power projects: Continued focus on diversification of revenue, fuel mix and expansion of geographic presence
4,097.625 MW of power projects spread across the country
4,097.625 MW of power projects spread across the country
Bajoli Holi180 MW
Fuel type - HydroCoD - 2015
Alaknanda300 MW1
Fuel type - HydroCoD - 2013
Talong160 MWFuel type - HydroCoD - 2014
Orissa1,050 MWFuel type - CoalCoD – 2012
Chattisgarh1,050 MW
Coal powerCoD- 2012
Vemagiri387.625 MWFuel type – GasPPA – 23 years till 2019(80% PLF)
Chennai200 MWFuel type – SulphurPPA – 15 years till 2014(min. offtake at 68.5% PLF)
Mangalore220 MW
Fuel type – NaphthaPPA – 7 years till 2008
(85% PLF)
Operating assets Under implementation3 projects
(807.625 MW)
7 projects
(3,290 MW)
Diversified fuel mix1
Projects distributed across all the fuel types – Hydro, thermal & Gas
Tied up fuel for most of the plants
Total capacity = 4,097.625 MW
Diversified revenue mix
2
Mix of short-term & long-term Power Purchase Agreements (PPAs)
Exiting 3 projects have long term PPAs tied up Fixed revenue stream from the Mangalore &
Chennai plant Availability of gas for the Vemagiri project to
create future revenue growth potential
New projects (other than the Orissa project) have the flexibility to choose between short-term/long-term PPAs
Distribution of total capacity
PPA - 1390 MW, Merchant Power – 2,707.625 MWNote: 1Capacity to be increased to 300 MW subject to approval of project development plan by CEA
Upper Karnali 300 MWFuel type - HydroCoD – 2015
Upper Marsyangdi 250 MWFuel type - HydroCoD – 2015
1 GMR : Leading Infrastructure Player
2 Airports
3 Power
4 Urban Infrastructure & Highways
5 Strong Management
7Requests to Govt. of Nepal
Issues in Project Development in Nepal
8
Key Highlights
6 Status of Project Development in Nepal
Particulars GTAEPL GTTEPL GPEPL GACEPL GJEPL GUEPL
Location Tuni-Anakapalli Tambaram-Tindivanam
Pochanpalli Ambala-Chandigarh Faruknagar-J adcherla Tindivanam-Ulundurpet
Road Length 59 kms 93 kms Construct - 86 kms + O&M Sweetener - 27
kms
Construct - 35 kms Construct - 46 kms + O&M Sweetener - 25
kms
Construct - 73 kms
Concession Period 17.5 years incl. construction period
of 2.5 yrs.
17.5 years incl. construction period of
2.5 yrs.
20 years incl. construction Period of
2.5 years
20 years incl. construction period of
2.5 years
20 years incl. construction period of
2.5 years
20 years incl.
Construction Period of 2.5 years
Concession Duration
May. 2002 – Nov. 2019
May. 2002 – Nov. 2019 Oct. 2006 – Oct . 2026 May. 2006 – May. 2026 Aug. 2006 – Aug. 2026 Oct. 2006 – Oct. 2026
Project Cost(Rs.Mn) 3040 3900 6900
3911
4713
7950
Financial Closure J une 2002 J une 2002 September 2006 May 2006 August 2006 October 2006
Commercial Operation Date
Oct 2004 Oct 2004 Nov 2008 Feb 2009 Apr 2009 Apr 2009
Project status as of 31st March 08
Started commercial operations
Started commercial operations
All major contracts have been awarded
68% construction completed
All major contracts have been awarded
54% construction completed
All major contracts have been awarded
46% construction completed
All major contracts have been awarded
42% construction
completed.
GMR Group Road Projects implemented/under implementation
AnnuityAnnuity TollToll
Mobilizing all resources and harnessing the best practices in all aspects of project implementation to ensure that the four Road projects under implementation are
commissioned on schedule
Already Operational Under Construction
Progress of Construction
Jadcherla Road
Ulundurpeth Road Pochanpalli Road
Ambala – Chandigarh Road
Project overview
Planned Action for next 12 months
Land Acquisition by December, 2008
Krishnagiri Special Economic Zone – Recent Foray
1 GMR : Leading Infrastructure Player
2 Airports
3 Power
4 Urban Infrastructure & Highways
5 Strong Management
7Requests to Govt. of Nepal
Issues in Project Development in Nepal
8
Key Highlights
6 Status of Project Development in Nepal
GMR has an experienced and dedicated team of individuals across hierarchy managing projects across sectors
GM Rao
Group Chairman
Srinivas Bommidala
Chairman -Urban Infrastructure & Highways
GBS Raju
Chairman – Corporate & International Business
G Kiran Kumar
Chairman - Airports
B V N Rao
Chairman – Energy & Agro
GMR Holding BoardGMR Holding Board
Management teamManagement team
AirportAirportStrategic FinanceStrategic FinanceEnergyEnergy
Urban Infrastructure & Highways
Urban Infrastructure & Highways
Raajkumar – CEO
G.K. Raghunandanan – CFO
G Subba Rao – President – Hydro
R. K Goel – VP – Transmission
K V V Rao – Director & President
S N Barde – VP – O & M
Ashish Basu – VP – Commercial & Contracts
I V Srinivas Rao – VP – Finance
V K Sharma – VP – Hydro
Harvinder Manocha – Head Nepal Projects
Rajan Krishnan – COO
D R Santhana Krishna – CFO
V Jayaraman – COO – Property Devlp.
O Bangaru Raju – COO - Strategic Initiatives & Central Procurement
Y M Shivamurthy – President, Legal
A, Subba Rao, EVP – CIG
A.S. Cherukupalli, EVP – Company Sec.
Vijay Vancheswar – Head,Corp.Comm.
P M Kumar - ED – Group Corporate Development
R. Ram Mohan – EVP – GCM’s office
B. S. Shantharaju – CEO
Andrew Harrison – COO
Shirish M Navlekar – CFO
I Prabhakara Rao – VP – Project Development
Phua chai Teck – VP - Planning & Develop
Sudhir Mathur –Chief – Commcl .Officer
Rajgopalsamy – CFO
P Sripathy – Head -Project Mgmnt. Ranjit Muregesan , CEO
Madhu Terdal, EVP
Cenk – CEO – Turkey
International DevelopmentInternational Development
K. Balasubramanian
Member Group Holding Board
GMR Infra BoardGMR Infra Board
G. M. Rao
Srinivas Bommidala
G. B.S. Raju
G. Kiran Kumar
B.V. Nageswara Rao
K.Balasubramanian
O B Raju
Arun K. Thiagarajan
K.R. Ramamoorthy
Prakash G. Apte
R.S.S.L.N. Bhaskarudu
T. R. Prasad
Udaya Holla
Uday M. Chitale
Corporate ServicesCorporate Services
Ashutosh Agarwala – CFO
P M Kumar
Member Group Holding Board
1 GMR : Leading Infrastructure Player
2 Airports
3 Power
4 Urban Infrastructure & Highways
5 Strong Management
7Requests to Govt. of Nepal
Issues in Project Development in Nepal
8
Key Highlights
6 Status of Project Development in Nepal
Status of Project Development in Nepal – 300 MW Upper Karnali HEP
Project MoU executed with MoWR
JVA executed with NEA
Foreign Investment approval received from Dept. of Industries (DoI), Govt. of Nepal
JVC (Public Company) incorporated in Nepal
Survey License obtained from DoED
Certificate of commencement of operations obtained from DoI
Project establishment at Surkhet finalised
Project team is in place; Engineering office operational at Kathmandu
Site is presently inaccessible due to heavy rains and landslides
EIA Consultants appointed – M/s SchEMS and data collection process started
Public Consultations for ToR and Scoping documents are being taken up
Topographical Survey agency finalised and activities will commence immediately after monsoon
DPR preparation started; Review of past studies undertaken by NEA (through CIWEC) are on
CSR activities are being taken up after the current year monsoon
At the time of DPR and Investigations stage itself
Status of Project Development in Nepal – 250 MW Upper Marsyangdi HEP
80% shareholding taken over in Himtal Hydro Power Company
Project site establishments are in place:
Project team in place; Engineering office operational at Kathmandu
Offices at Syange (Powerhouse site) & Taal (River diversion site) are operational
Site is presently inaccessible due to heavy rains and landslides
Project access road from Besisahar to Syange – washed away due to heavy monsoon
Site visits are being undertaken through trekking and through helicopter at times
Topographical Survey completed and geo-technical Investigations are underway
Both these are being undertaken through local agencies in Nepal
EIA Consultants - M/s SchEMS from Nepal ; Data collection process completed
Approval of ToR & Scoping documents for revised capacity of 250 MW is expected shortly
Approval process was delayed due to approval from ACAP / Wild life Board
Project layout finalised and Engineering activities have started
CSR activities are being taken up after the current year monsoon
At the time of DPR and Investigations stage itself
1 GMR : Leading Infrastructure Player
2 Airports
3 Power
4 Urban Infrastructure & Highways
5 Strong Management
7Requests to Govt. of Nepal
Issues in Project Development in Nepal
8
Key Highlights
6 Status of Project Development in Nepal
Issues in Hydro Power Project Development in Nepal
What the Hydro Project developer looks for?
Good infrastructure to and at site
Flexibility to create the same, may be on a selective basis
Availability of necessary approvals / clearances within reasonable time and efforts
Simple & clear regulations, acting as ‘FACILITATOR’ rather than ‘OBSTRUCTOR’
Clear and simple tax regime
Decent law and order situation
Supportive and facilitating Government at the centre and also at the district level
Availability of Competitive financing options
Are all these currently available in Nepal ?
The intent and will of the Government to create this enabling mix is critical
Developers have the will to implement and execute
All they need is SUPPORT’ and an ‘ENABLING ENVIRONMENT’
Nepal’s dream of achieving 10000 MW, requires some serious considerations on the above
Key Constraints in Hydro Power Project Development in Nepal
Lack of infrastructure (Access roads, Transmission links) Clearly defined Policy and Regulations
Should be free from any ambiguity Long term protection against ‘Change in Law’
Approvals and Clearances in a timely manner Supply of construction materials & machinery Conducive law and order situation Adequate availability of :
Construction Agencies and Engineering / EIA Consultants Support services like Survey and Investigation agencies etc. Skilled Hydro Manpower Resources Situation is likely to reach alarming proportions in coming years
Evacuation of Power: Licensing / Right of Way for transmission lines Connectivity with Indian Grid – Regulatory / Technical issues
Sale of Power in India: Long term / short term Open access Tariff mechanism
1 GMR : Leading Infrastructure Player
2 Airports
3 Power
4 Urban Infrastructure & Highways
5 Strong Management
7Requests to Govt. of Nepal
Issues in Project Development in Nepal
8
Key Highlights
6 Status of Project Development in Nepal
Requests to Govt. of Nepal
51
Select few large Hydro Power Projects: Serious development on >3000 MW of Projects - Upper Tamakoshi, Upper Karnali,
Arun III, West Seti, Upper Marsyangdi, Tamakoshi II & III, Likhu etc. Declare them as ‘National Priority Projects’ Proactively build access roads to identified Project sites Allow Developers to build Infrastructure before ‘Generation License’ Create ‘Single Window Cell’ for hassle-free and expeditious clearances Simplify Clearance procedure Demand timely achievement of realistic and pre-agreed Project development and
implementation milestones, from Developers Proactive Govt. support on:
Land Acquisition / Right of Way Rehabilitation and Resettlement Availability of Explosives
Provide impetus to manufacturing inds. supplying goods to Hydro projects: Need to explore creation of substantive indigenous capacity in Cement and Steel
Open G2G dialogue with Govt. of India: High Voltage Transmission corridor and Grid connectivity / compatibility issues Power exchange between countries on ‘Win-Win’ principles Develop large Projects on PPP route
Requests to Govt. of Nepal
51
Licensing policy: Integrated Basin development - Preference for developers of large Projects for
additional projects in the same basin: Why not look at ‘Swiss Challenge’ route for such projects?
Provide Fiscal benefits to improve ‘Investor Confidence’: VAT exemption – already proposed in current year budget – a Welcome step Restore Tax holiday provisions in Hydro Power Liberalize dividend repatriation provisions for foreign investment Generation License period – increase to 45 years Deferment of royalty to improve financeability of long gestation Projects Provide incentives to local industries in all areas of Hydro Power Support services
Local Civil Contractors and Equipment suppliers, Survey and Investigation agencies, Transport and logistics service providers
Provide nation-wide boost to technical education To promote young Nepalese Engineers
Simplify banking regulations Clarity and consistency in Customs and import policies Strengthen Legal, accounting and taxation system Consultations with IPPs in framing Acts, policies for Power sector
Thank You