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m 4,000 MW greenfield coal-fired plant located near Mundra Port, Gujarat

m India¶s first private sector power project using supercritical technology; most energy
efficient plant in the country
m Awarded by Ministry of Power through tariff-based competitive bidding in December
2006
m Levelized tariff of US 5.65 cents per kWh
m Project cost of US$4.2 billion to be financed by equity (US$1 billion) and debt from IFC
(US$450 million), ADB (US$450 million), Korean ECAs (US$800 million), local banks
(US$1.5 billion)
m Will sell electricity to state-owned utilities in 5 states ± Gujarat, Maharashtra, Haryana,
Rajasthan and Punjab
m First unit of 800 MW to be commissioned in July 2011
m Will import coal from Indonesia and other countries through the Mundra Port
m Main equipment from Korea and Japan
m Sponsor is Tata Power, India¶s largest private sector power company with operating
capacity of 2,355 MW (1,838 MW in thermal, 457 MW in hydro and 62 MW in wind)

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m India is facing energy shortages of 11% of Ô
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demand and even higher peak shortages of 



14% 

  



m Demand-supply gap is more acute in Western 


region (where 70% of the Project¶s power will
be supplied) with energy deficit at 16% and  

peak deficit at 21% 

 
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m Capacity additions of 160,000 MW required in

the next 10 years to satisfy India¶s power needs

m New capacity will need to come from a

combination of coal, hydro, gas, nuclear and
wind projects



 








m   
  Limited availability of indigenous gas; high price of LNG
  Gas shortages expected to persist despite new domestic production
m 
  India has substantial hydro potential mainly in the North and Northeast
  High capital costs, long gestation periods and E&S issues
  Run-of-river hydros affected by seasonality of rainfall
m 9
  Intermittent nature makes wind unsuitable for large scale base load demand
  India has a moderate wind regime with low load factors of 20-25%
m   
  India has ambitious plans for nuclear power but faces many challenges
m  
  Domestic coal resources are abundant in Eastern India
  Imported coal is reasonably accessible for coastal locations
  Coal is a viable alternative for meeting base load demand
  GoI is emphasizing the use of cleaner technologies

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m GoI made a comprehensive assessment of India¶s future energy needs and

alternatives for energy supply
m Detailed consultation process with various stakeholders
m Large scale capacity additions needed to address the country¶s poverty alleviation
agenda
m Launched a program in 2005-06 to bid out 9 UMPPs of 4,000 MW each
m Economies of scale and competitive bidding expected to benefit consumers
through lower tariffs
m GoI stipulated use of supercritical technology because it results in lower carbon
emissions
m Coastal Gujarat Power Limited is the first UMPP to be awarded in December 2006;
financial closure required by April 22, 2008
m Since then, two more UMPPs awarded to Reliance Power

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m Access to electricity is essential for reduction in poverty and improved health,

education and economic development

m Project will increase India¶s generation capacity by 3%; likely to impact about 16
million domestic consumers in the country and, hence, in line with our ³inclusive´
growth strategy for infrastructure

m Creation of 5,000 construction jobs and 700 jobs during operations

m Project will sell competitively-priced power at US 5.65 cents per kWh and provide
affordable energy to consumers

m First private sector project in India using supercritical technology; most energy-
efficient plant in India (40.5%) compared to existing assets (about 27%) &
therefore lower GHG emissions

m Project¶s tax transfers of about US$790 million to GoI

m Growth in port and power transmission capacity will further create infrastructure
and employment for the country

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m IFC requested by GoI to support this first private supercritical project in the country
  IFC participated in pre-bid consultations to improve Project¶s bankability
  Success is important to boost confidence of domestic & international investors in India¶s power
sector
m Project has significant risks due to size and complexity
  First private project using supercritical coal technology in India
  Significantly larger than any previous project by the sponsor, tripling its generation capacity
  IFC played a key role in financial structuring on behalf of all lenders
  IFC¶s presence contributes indirectly towards mitigation of political and regulatory risk
m Project requires very long maturities (20 years) to achieve a low tariff for consumers
  IFC¶s financing is critical to meet large debt financing needs
  Local banks are providing significant debt but are unable to meet entire debt needs due to
exposure limits
  International commercial banks have limited appetite for long maturities because of refinancing
risks and poor creditworthiness of state-owned offtakers
m IFC¶s involvement requires CGPL to comply with more stringent E&S standards than GoI¶s

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m India has few scalable alternatives to coal; IFC encourages use of more efficient coal
technology which results in lower carbon emissions
m Project will have amongst the ~
 
 ~ ~~ lower by 40%, 18% and
16% compared to the average GHG emission rate of coal based plants in India, across the
globe and OECD, respectively
m First supercritical project sets a precedent for efficient coal usage: consumes 1.7 million tons
of coal less per year than traditional subcritical plants of comparable size
m IFC support for this project will have a strong demonstration effect for other developing
countries that need to develop coal-fired generation
m Project may be eligible to sell carbon credits under the Clean Development Mechanism
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m Project site is sparsely vegetated with marginal cultivation; remotely situated from eco-sensitive
spots; impacted coastal area devoid of mangrove vegetation and coral reefs
m Robust air quality monitoring program by CGPL to evaluate conformity with IFC¶s and Indian National
Ambient Air Quality Standards
m Project will meet IFC¶s E&S Performance Standards which are more stringent than those of GoI

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m No physical displacement resulting from Project¶s land acquisition
m Key Livelihood Impact: Loss of access to grazing land; Company has developed a mitigation plan
consistent with PS 5
m IFC has confirmed Broad Community Support for the Project
m Community development plan by Coastal Gujarat Power Limited to ensure accrual of Project benefits
to the affected communities

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m Largest ever power plant in India with significant implementation risks including delays and cost
overruns
  Key technology supplied by reputable contractors at fixed price; adequate contingencies and
sponsor support for cost overruns and delays
m Fuel supply risks from imported coal could expose Project to volatility in coal pricing
  Long term coal supply contract at reasonable prices; Coastal Gujarat Power Limited plans to
further diversify coal sources
m Delays in completing the requisite transmission lines and port infrastructure
  Transmission & port infrastructure developed by reputable companies with good track record
m Off-take risks from poor creditworthiness of the state-owned utilities
  Project¶s tariff is highly competitive; ensures that state utilities are incentivized to pay; power
sector reforms progressing in most Indian states
m Refinancing risks after 10 years of operations because of insufficiently long tenors from local banks
  IFC and other foreign lenders providing long-term loans with 20 year tenor which will help
mobilize other commercial lenders when needed