Professional Documents
Culture Documents
SUBMITTED BY:
Sidra nor 11
Aysha sahar 25
Lubna malik 48
SESSION (2008-10)
DEPARTMENT OF COMMERCE
THE ISLAMIA UNIVERSITY OF
BAHAWALPUR
We Dedicate our Project
To our
“BELOVED PARENTS
“Mr.JAVEED IQBAL”
TABLE OF CONTENTS
Page
Serial No. Items No.
1 Executive Summary 5
2 Main Body 8
2.1 Project Idea & Background of project 8
2.2 Opportunity Rationale 9
2.3 Project Parameters 9
2.4 Plant Capacity 10
2.5 Implementation 10
2.6 Geographical Level 10
2.7 Project Promoters 11
2.8 Corporate Setup 11
2.9 Project Capacity and Rationale 11
2.10 Key Success Factors 11
2.11 Strategic Recommendations 11
2.12 Industry Analysis 12
2.13 Production Process 14
2.14 Machinery Requirement 17
2.15 Human Resource Requirement 18
2.16 Project Parameters 19
3 Annexure 19
4 Site layout 37
Executive Summary
1.1 The Project. ‘MTS’ Solar Power Generation Plant (Pvt) Ltd.
1.3 Sponsors
This project has been financed with the financial
assistance of BOP. The equity contribution is made
by MTS and Son’s.
1.5 Access
1.14 Manpower
For this project there is the requirement of
plant and administration staff which is easily
available at local.
Financial Plan
Bank loan 70% Rs: 536,985,400
Equity 30% 230,136,600
Total 767,122,000
Operating Results
G. Profit
191159 204265 217283
Op. Profit
186355 198740 210927
PBT
109702 123661 137661
Net Profit
67100 75588 84101
The Government of Pakistan’s (GOP) Renewable Energy Policy 2006 emphasizes the
development of renewable and clean energy in the country. In fiscal year 2005-06,
Pakistan’s consumption of energy generated through renewable energy (RE) sources
stood at only 180-MW. Development of the power generation potential of existing RE
sources, solar, biogas, biomass, micro-hydel, and windmills, offers significant business
opportunities for American manufacturers and exporters. Due to in-country depletion of
conventional energy resources and an expanding gap between power demand and
supply, the development of RE sources in the country has gained force over the past 3-4
years. The GOP has decided to encourage and invest in the development of the
infrastructure necessary for power generation through RE sources through its Alternate
Energy Development Board (AEDB).
In view of this, the Ministry of New & Renewable Energy Sources has been promoting
electricity generation from Solar PV in Mega-Watt level. These projects are covered
under the Grid Interactive Solar PV Power Generation Projects of Ministry of New &
Renewable Energy Sources. The Ministry initiated the programme to establish as a
viable and environment friendly electricity generation option.
Power generation from solar has many benefits which are as follows:
This is the best time to enter in the market because there is a short fall of electricity in
the country, so presently it has a high demand.
The proposed 5MWp solar power plant project will generate electricity from non-
conventional sources. The project will use “polycrystalline” technology for the first time
in the state for producing power by solar energy. This project will generate safe, reliable
electricity in an environmentally friendly way.
2.5 Implementation:
We are operating in Southern Punjab distt. Bahawalpur. This is the perfect choice for our
project because here the weather conditions are good and ideal temperature for this
project is 25’c which is available whole the year. And this city is situated near the
Cholistan Desert.
Project Coverage:
The project will impact positively to our economy while contributing in production in
electricity industry which would increase our GDP. And it is beneficial for our city as well
as our country because due to this plant we meet the demand and short fall of electricity
in our city. It would provide employment opportunity to the people which ultimately
increase their living standard.
Muhammad Tufail Sukhera and Son’s are well known businessman of this city and also
they have a good knowledge of solar energy. And they are working on solar system for
last 5 years. They initially promoted this project.
MTS solar power generation Pvt. Ltd will be a Private limited company. 30% of the cost
will be provided by sponsors. MTS solar power generation Pvt. Ltd have best rational
and technically equipped corporate managers which have the ability to run effectively
and efficiently.
This plant is installed at 5MW. This solar power plant produces 18250000 Kwh
electricity in a year at its full capacity. It can be computed as follows:
(5000 Kw*10 hrs*365 days).
Initially, the electricity is supply to the near by areas. The company will later expand into
other cities through an agreement with WAPDA that we use their supply system or we
sell our electricity directly to the house holds.
As we analyze the industry, we see there is a huge demand of these kinds of projects at
present and in future to fulfill the demand and supply gap of electricity in the country.
It was estimated that in 2005, 86% of primary energy production in the world came from
burning fossil fuels, with the remaining non-fossil sources being hydroelectric 6.3%,
nuclear 6.0%, and renewable energy sources, i.e. geothermal, solar, wind, biomass and
wastes contributed only 0.9%.
• France
• China
• Greece
• America
• Italy
• European countries
• India
For about a year now, Pakistan is facing the worst energy crisis of his history. If on one
hand, the increase in the oil prices at the world level is severely affecting the common
masses, on the other hand, the shortage of electricity is creating disorder in the country.
Beside others, one important reason that is advocated for this shortage is the rise in
electricity demand due to increase in production as well as rise in household income.
Pakistan covers 796,095 square kilometers of land between latitudes 24° and 36° north
and longitudes 61° and 76° east. At present, it faces serious energy problems:
95 per cent of its electricity generation comes from hydropower, which becomes less
productive during the driest, hottest months of the year and cannot keep pace with the
sharp rise in energy demand. Also, about 70 per cent of the populations live in some
50,000 villages dispersed around the country. Many of these villages are far from the
main transmission lines of the national grid and, because of their relatively small
populations; it is usually not economically viable to connect these villages to the grid.
Solar energy, on the other hand, has excellent potential in areas of Pakistan that
receive high levels of solar radiation throughout the year. Every day, for example, the
country receives an average of about 19 mega joules per square meter of solar
energy. Solar energy systems have already been developed and tested, and they
should now be adopted extensively as a way of supporting the economy of the country
and improving the living standards of its people. Not only can solar systems meet basic
needs of rural areas, but they can also reduce the pressure on conventional energy
sources in urban areas, leaving more of these valuable resources for other domestic and
industrial needs.
2.12.3 Current Industry Structure at Bahawalpur
In Bahawalpur division, a lot of work is being done on solar projects and at present,
there are two large projects are in pipe line that are,
Machinery Details,
• 2500 Solar panel (Poly crystalline) PV module of 200w each.
• 5000 Invertors (1 KVA)
• Cables and fixing structure and miscellaneous.
Solar system is purchased from China because we need it in bulk and China
manufactured high quality solar panels and all relevant material. And the other
remaining things are easily available at locally.
Reference:
• www.alibaba.com
• www.google.com
• Advance electronics ( Mr. Afzal )
In developed countries, Solar PV module Panels dust cleaning system is widely used in
solar photovoltaic power station. Trees leaves, bird poop and airborne particles (from dirt
and pollen) make solar panels dirty, dirty panels causes power loss. Dirt and waste
reduce the ability of the solar array to perform at full capacity. The potential energy loss
depends on the level of fifth accumulated on solar panels. Energy loss could reach 25
percent of generating power. Cleaning system for solar panels will improve the
photovoltaic conversion rate, keep the generation capacity steady all over the year
capacity. Panels can ve cleaned either manually or mechanically.
In Mechanical cleaning system mainly, water sprinkler system is used, but it needs lot of
power to spray water in wide module area, Manual system need manpower for cleaning.
Though mechanical dust cleaning system are efficient than manual system. This solar
PV plant manual cleaning is proposed because manual labor cost is less compared to
total supplementary power cost.
So, the maintenance and cleaning cost of solar panel is 1% of the cost of solar
panels that is Rs: 2500000
Annexure-1
MTS SOLAR POWER PLANT
Estimated cost of the Land
Rs: Rs:
("000") ("000")
Total
Sr.No. Description Qty Unit Cost Cost
1 Solar panel (poly Crystaline-200w) 2500 100 250000
2 Invertors (1 KVA) 5000 60 300000
3 Cables/ Fixing structure 2500 40 100000
4 Contingency (1%) - - 6500
Installation & erection cost is included in it. - - -
Total Cost of Machinery 656500
Annexure- 4
MTS SOLAR POWER PLANT
Pre-Production expenses
Rs:("000")
LCY
Sr.No. Description (000) FCY Total cost
1 Land 54,000 - 54,000
2 Building 15,608 - 15,608
3 Machinery 656,500 - 656,500
4 Furniture and Fixture 230 - 230
5 Office Equipment 170 - 170
6 Pre-operating expenses 1,100 - 1,100
7 Vehicle 1,000 - 1,000
8 Interest during construction @ 7% - - 37,589
Estimated fixed cost - - 766,197
Add: Net Initial Net Working Capital - - 925
Total Estimated Cost of Project - - 767,122
Annexure- 5 (a)
MTS SOLAR POWER PLANT
Estimated cost of Furniture & Fixture
1 Almirah 5 20 100
2 Tables 10 10 100
3 Chairs 30 1 30
Total - - 230
Annexure- 5 (b)
MTS SOLAR POWER PLANT
Estimated cost of Vehicle
Total - - 1000
Annexure- 5 (c)
MTS SOLAR POWER PLANT
Estimated cost of office equipment
Total - - 170
Annexure- 6
MTS SOLAR POWER PLANT
Initial Net Working Capital Requirement
A. Current Assets:
B. Current liabilities:
Annexure- 7
MTS SOLAR POWER PLANT
Depreciation Schedule of Fixed Assets
Rs. ("000")
Sr. No. Description T.Cost Rs. Dep.
1 Plant & Machinery @1% 656,500 6565
2 Building @ 5% 15,608 780
3 Furniture & Fixture @ 20% 230 46
4 Office Equipment @ 20% 170 34
5 Vehicles @ 20% 1,000 200
Total 673,508 7,625
Annexure- 8
MTS SOLAR POWER PLANT
Manufacturing Overhead Cost
Rs ("000")
Fixed Cost:
Depreciation 7,625
Insurance @ 2% of the solar system and spare parts 13006
650300*2%=13006
Maintenance :
Annexure- 9
MTS SOLAR POWER PLANT
Sales Revenue
Rupees (000)
Unit price per
Description Kwh 80% 85% 90%
2011 2012 2013
5 MW solar power plant produce 18250000
(A) Kwh RS: 15 219000 232688 246375
electricity in a year at its full capacity. - - - -
That is computed as (5000 Kw*10 hrs*365
days) - - - -
- - - -
Total Sales - 219000 232688 246375
Assumptions:
1. Tariff rate is fixed for 20 years.
Annexure- 10
MTS SOLAR POWER PLANT
Estimated income Statement
Rupees (000)
Raw material - - -
Operating expenses:
Other expenses:
Bank borrowing - - -
Annexure- 11
MTS SOLAR POWER PLANT
Balance Sheet
End of
Const. Operating Years
Year ending Dec 31 2,010 2,011 2,012 2,013
Assets: RS: (000)
Current Assets:
Cash and Bank Balance 275 71556 96729 126568
Short term investment - 47,521 99289 153207
Fixed Assets:
Fixed Assets at cost 765,097 765,097 765,097 765,097
Less: accumulated
Depriciation - 7625 15,250 22,875
Fixed Assets Net 765,097 757,472 749,847 742,222
Annexure- 12
MTS SOLAR POWER PLANT
Cash Flow Statement
End of
Construction Operating Years
Years Ending Dec 31 2,010 2,011 2,012 2,013
Sources of Funds Rs 000 Rs 000 Rs 000
Rupees(''000'')
No. of
Sr.No Description Employees 2011 2012 2013
1 Managing Director 2 1200 1380 1587
2 Accountant 3 540 621 714
3 Clerk 2 288 331 381
4 Chowkider 2 144 166 191
5 Peon/Sweeper 2 120 138 159
- - - -
Total 11 2292 2636 3032
Add: Fringe Benefits @ 40% - 917 1054 1213
Total Administrative Salaries per Year 3209 3690 4245
Assumptions:
Administrative salaries will increase 15% every year.
General Expenses
Sr.No Description Year Exp.(''000'')
1 Travelling Expenses 200
2 Printing &stationary 70
3 Telephone,Telex,Postage 500
4 Rent, Rates and Taxes 400
5 Entertainment 50
6 Legal & Audit 175
7 Miscellaneous 200
Total 1595
General Expenses:
Annexure- 14
MTS SOLAR POWER PLANT
Estimated labor cost
Assumptions:
1. Direct labor will increase every year @ 15%
Years
Rs(''000'')
Annexure- 15
MTS SOLAR POWER PLANT
BREAK-EVEN ANALYSIS
Commercial Break-even in the first Operating
Year:
( At 80% Capacity )
( Rs. In '000' )
Fixed
Items Variable Cost Cost Total Cost
104,310
( At 90% Capacity )
(Rs. In '000' )
Variable Fixed
Items Cost Cost Total Cost
169,350
IFRR
Assumptions:-
Calculation of IFRR for the project has been carried out under the following
assumptions:-
3. Motor Vehicles and operating equipment would be replaced after every five years.
4. Salvage value at the end of the life of the project represents recovery of working
capital, book value of buildings, office furniture and fixtures and original value of land.
Annexure - 17
MTS solar power plant
Loan Repayment Schedule