Revision in the determination of upfront tariff based on coal

Lahore, May 21, 2014 (PPI-OT): The Authority considered the Government of Pakistan’s reconsideration request dated February 11, 2014 and Thar Power Company’s request dated January 24, 2014 regarding the revision in determination of Authority in the matter of upfront tariff for coal fired power plants and approved the tariffs attached as Annex-I. The detailed determination/ decision of the Authority in the matter will be issued accordingly.

Annex-1

SUMMARY OF REVISED UPFRONT COAL TARIFF

Imported Coal Local Coal Thar 330 MW
Levelized Tariff F. Financing
F. Financing L. Financing F. Financing L. Financing Cents/kWh
Cents/kWh Cents/kWh Cents/kWh Cents/kWh
220 MW 8.6417 9.6774 8.2537 9.2978
660 MW 8.3601 9.5422 8.0116 9.2100 8.5015
1100 MW 8.0189 9.1198 7.6738 8.7897

Imported Coal Local Coal Thar 330 MW
Foreign Fin.
1st 10 Years Tariff F. Financing L. Financing F. Financing L. Financing Cents/kWh
Cents/kWh Cents/kWh Cents/kWh Cents/kWh
220 MW 9.3821 10.9148 8.9941 10.5352
660 MW 9.0642 10.7776 8.7157 10.4454 9.6576
1100 MW 8.6746 10.2702 8.3294 9.9400

Imported Coal Local Coal Thar 330 MW
11-30 Years Tariff Foreign Fin.
F. Financing L. Financing F. Financing L. Financing Cents/kWh
Cents/kWh Cents/kWh Cents/kWh Cents/kWh
220 MW 7.2557 7.3609 6.8677 6.9813
660 MW 7.0419 7.2295 6.6934 6.8974 6.2898
1100 MW 6.7915 6.9664 6.4463 6.6362

Assumptions: 220 MW 660 MW 1100 MW 330MW
Efficiency Local Coal 37.0% 39.0% 40.0%
37%
Efficiency Imported Coal 37.0% 39.0% 40.0%
Auxiliary 9.0% 8.0% 8.0% 9%
Availability/Plant Factor 85.0% 85.0% 85.0% 85.0%
Calorific Value:
Imported Coal LHV (Btu/kg.) 25,555.98 25,555.98 25,555.98
11,005.00
Local Coal LHV (Btu/kg.) 22,046.00 22,046.00 22,046.00
Price:
Imported Coal (US$/M. Ton) 129.06 129.06 129.06
46.10
Local Coal (US$/M. Ton) 103.17 103.17 103.17
Proj. Cost F. Fin. (US$ Million/MW) 1.51 1.45 1.35 1.51
Proj. Cost L. Fin. (US$ Million/MW) 1.62 1.64 1.53
Exchange Rate (Rs./$) 97.10 97.10 97.10 97.10
Debt Equity Ratio:
Debt 75% 75% 75% 75%
Equity 25% 25% 25% 25%
Kibor/Libor 11.91%/0.45% 11.91%/0.45% 11.91%/0.45% 11.91%/0.45%
Premium Kibor/Libor 3.5%/4.5% 3.5%/4.5% 3.5%/4.5% 3.5%/4.5%
ROE Imported Coal 24.5% 27.2% 27.2%
30.65%
ROE Local Coal 26.5% 29.5% 29.5%
Withholding Tax on Dividends 0.0% 0.0% 0.0% 0.0%
Project Drawdown:
1st Year of Construction Period 40% 40% 40% 40%
2nd Year of Construction Period 30% 30% 30% 30%
3rd Year of Construction Period 20% 15% 15% 20%
4th Year of Construction Period 10% 15% 15% 10%
Debt Drawdown:
1st Year of Construction Period 33% 33% 33% 33%
2nd Year of Construction Period 33% 33% 33% 33%
3rd Year of Construction Period 20% 13% 13% 20%
4th Year of Construction Period 13% 20% 20% 13%
Equity Drawdown:
1st Year of Construction Period 60% 60% 60% 60%
2nd Year of Construction Period 20% 20% 20% 20%
3rd Year of Construction Period 20% 20% 20% 20%