Annex-E
Pg.1 of 2
Replies to the comments / observations of IF Division, Ministry of Power on the PIB Note
on Revised Cost (Completion Cost) in respect of Nimoo Bazgo Hydro-electric project
S.No.
Observations of IF Division, MoP
Further comments / replies of NHPC
1
FIRR/EIRR of the proposed vis-à-vis
Original Cost estimates may be
incorporated in the Memo (In Para 4.8
of RCE Memo).
As desired the information has been
incorporated in para 4.8 of PIB Memo.
2
As can be seen from Annex–I of the
RCE Memo (page 30 of the Memo)
para – 2 of the original sanction order
of the project stipulated that the
project will be funded through equity
(Rs. 183.30 crore) and subordinate
debt to be provided by Government
of India and commercial loan to be
raised by NHPC. However, it has
further been stated that NHPC is
authorized to incur expenditure of the
project for which equity will be
released by Government of India. It
may be clarified as to whether
Government of India was to release
subordinate debt or equity. As per
the sanction order dated 24.8.2006,
details of financing pattern and terms
and conditions of the subordinate
debt including the interest rate were
to be issued separately in due course
along with abstract cost. A copy of
such financing pattern etc. may be
included in the RCE Memo.
It is clarified that the Govt of India was to
release only subordinate debt amounting to
Rs 270.00 crore as conveyed vide
sanctioned order No.33/1/2002-DO(NHPC)
dated 23.11.2006 in which the details of
Financing Pattern and terms of condition of
subordinate debt including the interest rate
have been mentioned. As desired the copy
of the same is enclosed as Annex-B of PIB
Memo.
Equity portion has been arranged by NHPC
through Internal Resource (IR).
Contd..
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Pg.2 of 2
3
As far as financing of the project is
concerned there is an increase of
Rs.374.14 crore. In the cost. The
project is to be funded on 70:30 debt
equity ratio. Thus, the increase of
Rs. 112.25 crore. (Being 30% of the
increase in cost) is proposed to be
borne
by
NHPC
as
equity
component. The remaining amount
of Rs. 261.89 crore is proposed to be
raised through subordinate debt to be
provided by Government of India. As
per the note on page 12 of the RCE
memo, the initial subordinate debt of
Rs. 270 crore was released at an
interest rate of 4% p.a. with
repayment of principle starting from
12th year of commissioning to be
continued
till
29th
year
of
commissioning NHPC does not want
to increase the commercial loan
component of Rs. 157.71 crore so as
to keep the tariff on lower side. The
first year cost levelised tariff have
been stated to be Rs. 8.12 per unit
and Rs. 7.56 per unit respectively.
As per the original proposal of the
project, the same were Rs.5.19 and
Rs.4.73 respectively.
Since the
project
has
already
been
commissioned and only Rs.71.01
crore is the anticipated expenditure.
It may be clarified as to why the
subordinate debt to be further
released may not be restricted to
Rs. 71.01 crore only.
In case the Sub-debt is restricted to
Rs.71.01 crore only, the same will result in
further increase in Tariff rates which are
already on higher side and thus shall not be
desirable.
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