Tariff Petition of Sapphire Wind Power Company

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FAX
NO.
22 Feb. 20 0 9 O 3: 14AM P1
313 Colton ExcJ a rqf Building, I. Chundrigar Road , Karachi-74M Pokiston Phonm : 92-21.111-000.100 Fm,: 92 - 21-2416705, 92.21.2417418 E.moil : karoehi . olkco@sapphiro . eom.r,k
Sapphire Wind Power Company Limited
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September 9. 201 1
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Syed Safeer Hussain Registrar National Electric Power Regulatory Authorily OPF Building, 2"" Floor
Shahrah-c-,1 am h urriyal G-5/2, Tslarnahad
Fax: 051921 .02 15

Subject: Application for approval / determination of Generation Tariff of 50 MW Wind Power Project at, lhimpir area , Taluka & District Thatta , Sindh.
Your ref.: NEP1tA /TRI'-100 /7571 dated 07.09.11

Dear Sir Further to the above mentioned letter:
r u ^-,i. .. ". _..'fl . Petit` ^ ,;he last pa i. We h;i a initialed a ll rT wo , ill ll c 1 al M 14lltl^^ o and signe d , the ruu^ e ofthe same 1D
ii. It may be noted that the Affidavit had already been stamped by the Notary Public iii. AEDB's provi,ional ;leceptaitce of our feasibility is attached at Annexure D iv, Our offer letter to NI T)C tier sale of power is artached at Annexure G 'I'hc Application for the approval /dclcrmination of the generation tariff is being re-submitted tier
consideration by NF,PRA,
Sincerely,
fill, +
313-Cotlon Exchange Building, I.I. Chundrigar Road, Karachi-74000 Pakistan Phones : 92-21-111-000-100 Fox:92 -21-2416705,92 -21-2417418 E-mail : karachi . office@sapphire . com.pk
pphire
29 August 2011
Syed Safeer Hussain Registrar

National Electric Power Regulatory Authority OPF Building, 2"d Floor Shahrah-e-Jamhurriyat
G-5/2, Islamabad
Dear Sir Application for the approval / deterrnination of the generation tariff Sapphire Wind Power Company Limited (the "Company") 50 MW Wind Power Project at .lhirnpir ( the "Project") Appended herewith is our application for the approval /determination of the generation tariff pursuant to the NEPRA Act and the applicable Rules. Alongside this application, we are filing an application for the grant of a Generation License. UcY^.IVI Contract(s) Should kindly he held in strict confidence and should not to he published or uploaded on NEPRA's web-site, or otherwise disclosed to the general public.
C\
We hereby re-,Ll est .., ^
?sIr nR
tl,,,t
tt, ' l^ L IC C ontracts and the EP
We look lorward to working with you to complete the regulatory process and thereby achieve financial closing for this Project at the earliest.
Yours sincerely,
For and on behalf of
SAPPHIRE WIND POWER COMPANY LIMITED
Nadeem Ahdullah
Chief Executive
(,tiri
i?, C'"iikui i \ch:uitr liuildlnr. L L C'1 iulri'^:u 1ZuMJ, Itiarnrlu-!- 2111), Pakislun. Ph o nes 9 2 21 111 1)1)1) 11)1) - 24109?If Pas `)'_ 2 1 241(,7111
i - \lail k:ir;feI -ollic.c r ti;y. it irr.c ni hk
EXTRACT OF RESOLU TION PASSFI ) in, TILE BOARD OF DIRECTORS OF SAPPHIRE, WIND POWER ('OI\IPANY LII\MITEI) IN ITS MEETIN G 11FLI) ON 2-ITtt AI1(:115"1', 2011 AT 11:110 A.M. Al' TILE REGISTERED OFFICE OF TIIF COMPANY 212, CO'I'"I'ON EXCHANGE 11111LI)IN(:, I.LCIIUNDRI (:AR ROAD, KARA(_ I l l
"IZFSOI,\'I I) 't'll.A'F cacti of I\1 r. Nadeem :\htlullah (Chief Executive Officer) and Mr. Khalid :\slanr (Technical Director) he and are hercl ^ y jointly and severalty aiillioixetl to file (i) an application fur the grant of a generation license; ( ii) an application fur the determination of generation tariff (including any rev lew petitions); and (iii) and documents in support thereof anti/or to make any oral/written representations on hehalf of Sapphire \Vintl Power C'onrp:uty i.imited, before the National Fleett is Po\\ er Regulatory Anthori(y in relation to the Sapphire \Vioott Power ('otnpant I,inritetl's 511 \I\\' \\"Intl po\\er project at ,Ihampir Area.
Taluka & District l'haIIa, Sintlh, Pakistan; and to undertake any matter(s) necessary or incidental there(o."
(ertifictl that ii ^ c aho\e resolution (i) t as dui passed h^ the Board of Directors of Sapphire Wind Ptn\er (onlpan) Limited in it meeting at Wltich a quorum or tlirech ^ rs Was present; and (ii) has not b een rescinded and is in operation and that
this is a true co1y of' (lie said resolution .
Company Secretary
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Habib ::M
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UMBD
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? 35 Gulu er ^^r Orarich 6., 11C Lahore Date: Auy 25 2011 ON f1M ND P A Y
r ATIUN ELECTRIC PO WER' RCGULAIORY F -'I I;OF:ITY OR ORDER
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Signature
BEFORE THE NATIONAL ELECTRIC POWER REGULATORY AUTHORITY
IN RE: APPROXIMATELY 50 MW WIND POWER COMPLEX AT JHIMPIR AREA, TALUKA & DISTRICT THATTA, SINDH , PAKISTAN AFFIDAVIT
1. Nadeem Abdullah. Chief Executive Officer. of Sapphire %Vind Power Company Limited. address 212. Cotton Exchange Building, I. I. Chundrigar Road. Karachi, do hereby declare and affirm on oath as under:
1. That the accompanying Tariff Petition has been filed before the National Flectric Power h ,.ri J the Ref ul n n be rears as an inta'ral r^ ty and tue iUIItCRts of the same may ut vu kln (livpa. . . of this affidavit. That the contents of the accompanying Tariff Petition are true and correct to the best of m knowledge and belief and nothing has been concealed or mis-stated therein.
Deponent Verification Verified on oath at Karachi on this 25'h day of August 2011 that the contents of the above affidavit are true and correct to the best of my knowledge and belief.
Deponent
Li
US
VAKALATNAMA
We, Sapphire Wind Power Company Limited
.ompany "), hereby appoint and ( the "('
constitute jointly and severally MR. NADIR ALTAF and MR. WASEE-UL-HASNAIN NAQVEE to appear and act liar us as our advocates in connection with the processing and presentation of the Company's Application for Tariff Determination ( the "Petition "), in relation to the Company's proposed 50 MW power project at .lhimpir Area, Taluka & District Thatta, Sindh, Pakistan, with the National Electric Power Regulatory Authority ("NEPRA").
We also authorize the said advocates or anyone of them to do all other acts and things necessary liar the processing , completion and finalization of the Petition with NEPRA.
Signature: Received by us: From:
RIZVI, ISA, AFRIDI & ANGELL

ADVOCATES &CORPORATF ('OUNSELLOI:S 68 NAZIMUDDIN ROAD, F-8/4, ISLAMABAD UAN: III-LAWYER
313.Ca1ton Exchange tluiling, I.I. Chundrigor Rood, Karachi -74000 Pakistun Phones : 92-21-I11 -000-100 Fax: 92 .21-2416705, 92-21-24174113 E-mail : korachi.office (dsapphire -com.pk
Sapphire Wind Power Company Limiter
29 August 2011
Syed Safeei- Hussain Registrar

National Electric Power Regulatory Authority OPF Building, 2iic1 Floor Shalirah-e-Jamhurriyat
G-5/2, Islamabad
Deat- Sir Application for the approval / determination of the generation tariffSapphire Wind Power Company Limited (the "Company") 50 MW Wind Power Project at Jhimpir (the "Project")
Appended herewith is our application fbr the approval /determination of the generation tariff pursuant to the NI--1'I-:A Act and the applicable Rules. Alongside this application, we are filing an application for the grant of'a Generation License.
We hereby request NU'T '.A that the FP( Contracts and the O&M Contract(s) should kindly he hold in strict ccllilldrl,ce and Should not to he published or uploaded on NEI'RA's web-site, or otherwise disclosed to the gene-al public .
We look forward to working with you to complete the regulatory process and thereby
achieve financial Project at the eat hest.
i ours sincerely, For and on behalf of SAPPHIRE WINE) POWER COMPANY LIMITED
Nadecm Abdullah
Chief Executive
1;11]
SAPPHIRE WIND POWER COMPANY LIAIITEI) TARIFF PETITION
BEFORE THE NATIONAL ELECTRIC POWER REGULATORY AUTHORITY (NEPRA)
TARII F PETITION
PURSu.\N"I'lO NEPRA ('I'.\RlI I' S'I \Nl ).\Itl)S .\NI) PR( )(aiUURI : ^ Rul.l'.S, 1998 R1-.Al) \V'TI I'll [I: 1)1(()\'ISI()NS 0V Ti I ^ :. Rl:.t;Ul..\"I'I()N I:()lt G1'.N1{lt.\'I'I( )N, TI:.\NS,\IISSION .\NI) DID 1Rlliu"fI()N (-)I ELI?( I'Itl(: PO\r'I':It :1(:"I' (1L O1.) 199" &,1,111: Rui IS .\NI) RI .C;VI..\'I'IONS MAN.' Ti 1ITFUNDI-At
Ti ii: FIU)I::It 11. GO\'l:RNNII :N"I''S POLIc:1' O1' RI:\t:W \Fl.i: E\I;ICC;1" I OR Pc )\\ 1.1, GIL:NI:R.\'1'ION 2006' .`.NI) I'I 11: "GuI ^ ) ^ ::I.INI(s i ()R Dl :fl:RNIIN.\ ^ ^ ( )N OI^ 1'.\R ^^ I I '(W \\'INI) P ( )\Y i :R GI: NI .R:\TION 2006" ON lil(II.\I.I (11
SAPPI TIRE FIND POWER COMPANY LIMITED

FOR NEPRA's.vI'I'ROv'.vI. ( 1?J.I I:I?I.:N( I( GI NI{It:v'1'!UN "1'.Alttt t' I UR SAPPHIRE WIND POWER COMPANY LIMITED
^t ^F. A R ^\\ I I 1itc >II'C i C) iii t^^^
JI L\N(I'II(, SINI)I I
DATED :. lugusl 30 ''', _011
AI)17RI:SS: 313, Cotton Exchange Building, I.I. Chundrigar Road, Karachi Phone #: 0092-21 - 111 000 11)1)
lax #: 11092 -21-32" 416705
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SAPPHIRE WIND POWER COMPANY LIMITED TARIFF PETITION
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OF
SAPPHIRE WIND PO ER COMPANY LIMITED BOARD RESOLUTION
SAPPHIRE WIND POWER COIIIPANI' LIMITED TARIFF PETITION
C p Y OF
AFFIDA VI TS
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SAPPHIRE WIND POWER COMIPANY LIAIITEI )
TARIFF PETITION
TARIFF PETITION
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SAPPHIRE WIND POWER COMPANY LINIITEI TARIFF PETITION
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SAPPHIRE WIND PONDER COMPANY LIMITED TARIFF PETITION
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TABLE OF CONTENTS
1. Details Of The Petitioner ....................... ..................................................................................11
2.
Regulatory 1 ramework Leading to Tariff Petition.............................................. 12
3. Executive Summary ...................................................................................................................16 4. Rationale for \Vind power .........................................................................................................23 5. Project Cost and Tariff ..............................................................................................................32 6. Project Funding Structure (Debt &Equitvv) ............................................................................42
Operation Cost ............................................................................................................................49 8. Proposed Reference Generation 'T'ariff & Debt Schedule ....................................................56 9. Indexations , Escalations And Cost Adjustment ....................................................................61 10. Considerations With Respect 1b EPA ..................................................................................67 11. General Assumptions ...............................................................................................................82 12. Tariff Summary ........................................................................................ . 85 ................................
()
1`.a
ANNEXURES
Following P ertinent informatio ) is hereto a! [ached for N Ell ILA: (a) ANNEXURE A -LI:'ri'1:It 01; fN'I I N'I';
(b) ANNEXURE B -1'1 :(:I INu:,\I Fl {.\SII111.I 1'1' .\i'I'RO\',V.;
(c) ANNEXURE C - NTDC - C; K11) C( . )NN I:(;1'1ON Al'1 ']t(\'.11.;
(d) ANNEXURE D - Pit( )VISION \I . API'RO\'11, OI FI: sI1 11.1'11' S' 1'lil^l' RYAEDB;
(e) ANNEXURE E - DHI'1' FIN.\NCINU TIT m SI II-1-:1
(f) ANNEXURE G - P( )\C'I:It PURcI I.\SI:R CONSENT LE'ri'IiR
(g) ANNEXURE H - INI-11.AI. E^`V'lit( (N^111:N1'.A1. E\.At'IIN:ATI( )N (lEE) .^PI'It0V':AI.
(0
1. DETAILS OF THE PETITIONER

NAME AND ADDRESS
ICI/s Sapphire Wind Power Company Limited ADDRI Ss: 313, Cotton Exchange Building, 1.1. Chundrigar Road, Karachi Phone #: 0092-21-111 000 100 fax 0092-21-32416705
REPRESENTATIVES Ot M/S SAPP] [IRE WIND POWER COMPANY LIMITED
Mr. Nadeem Abdullah: Authorized Representative , Sapphire Wind Power Company Limited
Mr. Khalid Aslam: Authorized Representative , Sapl)hire Wind Power Company Limited
I 1-1
02 1 .
11
TARIFF PETITION
2. REGULATORY FRAMEWORK LEADING TO TARIFF PETITION

2.1 NATIONAL ELECTRIC POWER REGULATORY AUTHORITY - THE COMPETENT AUTHORITY FOR DETERMINATION OF TARIFF
NEPRA Act & NEPRA Rules

Under the Regulation for Generation, Transmission and Distribution of Electric Power Act (XL of) 1997 (the NEPRA Act), the National Electric Power Regulatory Authority (NEPRA) is responsible, inter alia, for determining tariffs and other terms and conditions for the supply of electricity through generation, transmission and distribution. NEPR\ is also responsible for determining the process and procedures for reviewing tariffs and recommending tariff adjustments. Further, pursuant to the enabling provisions of the NEPR\ Act, the procedure for tariff determination has been prescribed in the NEPRA (Tariff Standards and Procedure) Rules, 1998 (the NEPRA Rules).
`Policy for Development of Renewable Energy for Power Generation 2006' & `Guidelines for Determination of 'tariff for Wind Power Generation 2006'
In order to avoid multiplicity of entities and stages of negotiations fc,,- tariff negotiations, paragraph A.7.2 (Negot;itteel7tri//Jor Unsolicited Proposals and (-fp-front Tarili) of annesure A (Grrir!;kif,s for I)eterr,u,rtiu/r o/ Jarifjôr Grid C a/rne,7rrl IP!'3) of Policy for Development of Renewable I[nerp,v for power Generation 2006 (the RE Policy 2006), issued by the Government of Pakistan in 2006, states:
.11 5 /.i/c'.i U/' liei'OtldllOrl .l' Wi// !, .rr ,n::(ea i il,
rlrlerniinatroa of J a,l er nnn parr 1 irirlfs for RE !PP;. l; an I!'P wt:rhe.r to strhnrit u,: l!/uo/iiitea oYPo. rd (J/rd. wan!, to Set:le !a/71j throii /, rrCgotialion.r NEPIZ-1 wi// rle/errni/le the taxi/f iii ronsnii iou with the IPP, The Power piirchurer(c rnrd other stakeholrkrs
Further, pursuant to section 4.2.1 of the Guidelines for Determination of Tariff for \C'ind Power Generation 2006 (th( Wind Tariff Guidelines 2006 ), issued by the Government of Pakistan under Section 7(6) of the NEPRA Act, if a wind power IPP wants to settle tariff through neg"dations_ NEPR'1 shall determine the tariff in consultation with such wind power I IT. the power purchasers and other stakeholders.
2.2 PROCESS OF ISSUANCE OF LETTER OF INTENT LEADING TO TARIFF PETITION
Request for issuance of "Letter of Intent " by Sapphire Wind Power Company Limited and issuance of "Letter of Intent" Alternative Energy Development III and (the AEDB) vide its letter # B/3/16/2006 dated August 10''', 2006, issued an Letter of Intent (the LOI) to Sapphire Wind Power Company Limited (SWPCL or the Project Company) and requested the Project to proceed with carrying out the feasibility study for setting up a wind power generation project. A copy of the LOI is attaclicd hereto at Annexure A.
12
Submission of the Feasibility Study and approval of the same In compliance wirh the rrequiremme;its laid out in the RE Policy 2006 and the LOI, Sapphire Wind Power Company Limited completed the detailed feasibility study for the project and submitted the same to AEDB for their review ( the Project Feasibility Study). Following completion of its detailed review , AEDB, vide its letter dated October 16, 2009 (Ref: B/3/ 1 /S\\'PCL/07) (the Feasibility Study Approval Letter ), granted partial / conditional approval of the Project Feasibility Study of Sapphire Wind Power Project . A copy of the Feasibility Study Approval Letter is attached hereto at Annexure B. The Feasibility Study Approval letter stated that final approval of the Project Feasibility Study was Gnked with the approval of the following (the Conditional Matters): (a) Grid Interconnection Studies approval from National Transmission and Despatch Company Limited (the NTDC); (b) Verification of the 'Pow,ver Productiwi Estimates' from Risoe.
For the benefir of N1:PR.\, an update on the status of the Conditional Matters is as follows:
(a) Grid Interconnection Studies approval from NTDC

In
compliance
with NTT-)C rcalui lienrs, Sapnhtre ^t
\r'ind Po wer C o mpany
Litrut ed
engaged Power Planners lnternat-mna! (the PPI) for conducting the grid inter connCCtioii ^tuci\'
Sapphire Wind Power Company Limited submitted the detailed Grid Interconnection Study for its wind power project to Pakistan Electric Power Company (PEPCO) on May 12,2_ 009 for PEPCO ' s approval. The Grid Interconnection Studies covered all aspects of the wind power project including: (i) Load Flow Analysis; (ii) Short circuit analysis;
(iii) Transient Stability Analysis; and

(iv) Power Quality Study indicatiaig suitable remedial equipment, Since submission of the Grid Inter onnection Studies, constant follow-up has been maintained with PL:PCO / N'I DC and r\EDB at various levels. NTDC communicated their comments to Sapphire on the Grid Interconnection Study and in the light of the same, Sapphire submtted the revised Grid Interconnection Study to CPPA / NTDC.
1,;
13
SAPPHIRE WIND POWER COMPANY LIntITE1)
TARIFF PETITION
Subsequently, GM Planning Power NTI)C, vide the letter # GMPP/CEMP/TRP380/7078 dated Nov 30"', 2010 accorded approval of the Grid Interconnection Studies. A copy of the NTDC letter is attached hereto at Annexure C. (b) Verification of the `Power Production Estimates ' from Risoe Pursuant to its Project Fcasibihty Study, Sapphire has submitted its "Power Production Estimates" (PPE) to AEDB, who further have submitted the PPE to Risoe (AEDB's independent technical consultants) for independent verification. It is understood that following RISOE's verification of the PPE, AEDB would be communicating the energy estimates for the project to N)PRA. Provisional Acceptance of the Project Feasibiiity Study In light of the present status of the Project Feasibility Study, AEDB vide its letter # 13/3/ I /S\\'CPL/07 dated August '7'!', 2011 has provisionally accepted the Project Feasibility Study and the final approval of the final approval of the feasibility study will be accorded by AEDB based on the verification of Power Production Estimates. A copy of the AEDB letter for Provisional Acceptance of the Project Feasibility Study is attached hereto at Annexure D. Request for Determination of Tariff
While a final approval of the Pr eject Feasibilir ; Study is pending to date, it is highlighted that in order to expedite the process of obtaining Tariff and Generation License for IPPs, AI. DB vide its letter # B/3 /1/S\\'CPL/07 dated August 27", 2011 has allowed Sapphire \\'ind Powei Company Limited to proceed ahead with the pp li^,rie^;; o f tarrtff ', Nl:Pi2_\.
Based on:
(a) the status of Conditional Mat: rs provided in Section 2.2 .2 (Slrbmissiort of the Feasibility Sludy 411111 approval of '1 e moire) above, whereby Sapphire \\'ind Power Company Limited, on their part, have undertaken and completed all activities required for procurement of approvals of the relevant Conditional Matters from various stakeholders - including the power Production Estimates verified by Risoe for AEDB and of its Grid Interconnection Studies from CPPA/NTDC; (b) the Economic Corporation Council (ECC) instruction to NEPRA for accepting Tariff Petition only for IPPs with a firm and executed EPC Contract; (c) the provisions of the 121, Policy 2006 relating to application to NEPI2A for its determination of tariff following approval of the feasibilit y study, as read in light of the express support of ;\El )B to expedite the tariff determination for the project by NEPRA; and (d) AEDB approval for allowing Sapphire Wind Power Company Limited to submit the application of tariff to NEI'R.\. It is submitted that the requirements of the regulatory process for applying to NEPRA for its determination of the tariff for Sapphire \\'ind Power Company Limited's wind power project are complete.
^J
2.3 SUBMISSION
Pursuant to the reiev:uit provisions of the NE P 111 Rules, read with the provisions of
the NEPRA Act and the Rules and Regulations made there under; AND in accordance with the RE Policy 2(106 and the \Vind Tariff Guidelines 2006; AND in view of compliance by Sapphire Wind Pov. er Company Limited and Sapphire Group (Main Sponsors of the Sapphire Wind Power Company Limited) of the RE Policy 2006 in respect of meeting the requirements of the same so as to be eligible for application for a tariff: SAPPHIRE WIND POWER COMPANY LIMITED SUBMITS HEREWITH before NEPRA, the competent regulatory Authority lawfully authorized to determine tariff for wind power generation companies, for its approval, a tariff petition (the Tariff Petition ) for approval of (i) the reference generation tariff ( the Reference Generation Tariff); (ii) the energy production estimates; (iii) the Benchmark Energy Table and Monthly Complex Power Curves; (iv) the Indexations and Adjustments; (v) Adjustments at commercial operations date; and (vi) other matters set out in this Tariff petition, in each case, for S:pphire Wind Power Company Limited's 50 I\IW' power generation facility to be located at jhampir, Sindh. Given the advance stage of the project, NEPIL1 is kindly requested to process the Tariff Petition at the earliest, thereby enabling Sapphire Wind Power Company Limited to proceed further with the development process.
U2
15
TARIFF PETITION
3. EXECUTIVE SUMMARY
3.1 PROJECT SUMMARY
Since the issuance of the LOI on August 10'u', 2006, the Project Company conducted various studies to assess the feasibility of the wind power project. The studies included, to name a few, the wind resource assessment, geo technical survey, topographic study and grid interconnection study. Based on the studies conducted, the Project Technical Engineer i.e. hl/, Sgurr Energy completed the feasibility study for Sapphire Wind Power Company Limited in October 2009; this was submitted by the Project Company to Alternative Energy Development Board (AEDB) for its review and was subsequently partially/conditionally approved by AEDB on 16'u' October 2009 via letter B/3/ I /SWPCL/07. Since the partial / conditional approval of feasibility study, Sapphire Group has committed funds and resources to move the Project towards Financial Close . In doing so, Sapphire group completed the conditions for the final approval of the feasibility study and simultaneously developed a competent in-house team that consisted of Legal, Financial and Technical Consultants . In order to select an EPC and O&hf Contractor for the Project, Sapphire \\'ind Power Company Lirruted carried out an international bidding process and floated the RFP to 6 internationally renowned \X'TG suppliers for awarding the turnkey F PC Contract for construction of the Project under a turnkey arrangement . After a n extensive technical, financial and commercial evaluation process , Sapphire Group selected hf/ s China Machinery Engineering Corporation (CMEC) as the preferred EPC Contractor , with General Electric (GE) supplying the W ind 't ' urbine (; ener . itors and also being responsible for of long term O&M of tile plailt.
li , C'tFC vv ,^^^ established
to 1978' as the first national corporation integrating foretgn trade with industry, C:\IEC. is a I uee global conglomerate with the engineering contracting as its core business and its main business includes import and export trade, R & D work and design as well as international service. As a well-known international engineering contractor, CNIEC ranked 3"' amongst top fifty of China's enterprises listed by the Ministry of Commerce of China in terms of business turnover during 2008. CMEC has been listed among the largest 225 contractors in the world by Engineering News-Record, a famous magazine in the United States, for several consecutive years. GE Wind Energy, a branch of GE 1 :nergy (a subsidiary of General Electric), shall be supplying 1.5 xle wind turbines. In 2009, GE was the second largest wind turbine manufacturer in the world. The l.`> NRC' Series is the most widely deployed wind turbine with 16,500 plus turbines in.talled globally with availability higher then 98"o. Continual investment by GE to crease the highest capacity factor in its 1.5 M\\' class, has led to ensuring consistency in its workhorse reliability, ease of maintenance planning and high commonality in spare parts.
S\W-'PCI. has signed a turnkey EPC Contract with CNIE.C dated August 27", 2011.
The capital structure of the Project ik envisaged at 75:25 (Debt: Equity) with Sapphire Textile Mills Limited injecting the full amount of equity required in the project. The Project Company intends to obtain 57.94"o of debt through foreign sources in USD while the remaining 12.06" will be funded through local sources in PKR.
0 1) ['
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SAPPHIRE WIND POWER COMPANY LIMITE.D TARIFF P ET I T I O N
Debt for the project will be pruvidcd by:
( 1) EGO Trade & Development Bank - 31 . 04/u (of Debt);
(2) Industrial and Commercial Bank of China - 56 . 90% (of Debt); and ( 3) Consortium of Local Banks 12.06';0 ( of Debt).
The signed term sheets for the financing of the Project are attached to the petition as Annexure E.
3.2 SALIENT FEATURES OF THE PROJECT
Subject to the assumptions contained in this Tariff Petition, please find below a summary of the Project for NEPRA's perusal:
Sapphire Wind Power Company Limited Sapphire Textile Mills Limited
50NRX!
Jhampir, District Thatta, Province of Sindh, Pakistan
1,372 Acres
20 years Irony commercial operations date and Despatch Company Coma ' L.imitcci Central Power P urc h asinv A gency) Nati ona l
f ransmt ssl nn
(tiirnuyi,
General !aectric 1.5 xle Year I - 138.8 G\C'h, Year 2-20 - 140.9 G\X'h China Machinery Engineering Corporation (CMEC) SS in '000) Amount 107,500 1,095
EPC Price
LC ( onfirmation
Non EPC Cost

Project Development Cost 1.ant1 Costs
Duties & Taxes
1,348
2,891 119
719
Insurance during Construction Financial Charges Sino;ure Fees

\Vorking Capital
1,466 3,602 4,635

992
Interest During Construction

Taw Project Cost (C 11'Li.^')
4,505 128,872
Debt 75", F.1uir' 25',
17 L.) a. I
TARIFF PETITION
US$ 32.2 million

US$ 96 . 1 million
Foreign I financiers EC() Trade & Development Bank (ETDB) Industrial and Commercial Bank of China (ICBC) Local Fieeanciers Consortium of local banks Currency Mix of US Dollars ( 87.94 %) and Pakistan Rupees ( 12.06 ,'o) Up to 12 years ( door to door) Up to 24 months
10 years
Term Grace Period

Repayment Period
-t
Debt Repayment Interes! Rate
In equal semi-annual installments For Local Currencv Debt - FBL & MBL
Base Rate : 6 months KIBOR

Spread: 300 basis points; and I For Foreign
cu rrency
t Debt
-ETDB
Base Rare : 6 months LIBOR Spread: 350 basis points + 100 basis
points ( ADB RE, DSIP Guarantee)

- ICBC Base Rate : 6 months LIBOR Spread : 400 basis points
+ IOU basis points ( ADB REDSIP

Guarantee ) General Electric (US$ in '000) Years 1 -2 3- 1(1 11-20
O&M Cost 1,315 3,073 2,964 Insurance 1,075 1,075 1,075

Toted t) eratin g (-ojt USO 14.2116 per kWh Ener,, y Purchase Agreement with the power Purchaser Implementation Agreement with the Government of Pakistan 2,390 4,148 4,039
Government of Pakistan Guarantee

Site sub - Lease Agreement
18
TARIFF PETITION
Policy for Development of Renewable Energy for Power Generation 2006
Major Tasks Completed Executed EPC . Executed term Environmental
& ( ^ &NI
agreements Pea;ibility Study Transportation
sheet with Project

lenders Wind Resource Assessment Study
impact
assessment Topographical Study Electrical grid
Geo-technical
Study
Design of wind farm
Study
study
^^
^^_
19
3.3 KEY FEATURES OF THE PROJECT
Amongst various other factors, the foilowing are the key strengths of the Project: (a) Sapphire Wind Power Company Limited initiated an international competitive bidding process to select the EPC Contractor for carrying out the construction of the proposed 50 1\RV Wind Farin. A Request for Proposal (RFP) stating all the technical and commercial requirements for a state of the art wind farm in Pakistan was floated to Six world renowned WTG Manufacturers to bid for the development of the project on a turnkey basis. \fter detailed evaluation of the Technical Bids submitted by the bidders, as per International. Bids Evaluation Standard of twoenvelope process , only those bids were selected for financial and commercial evaluation that passed the technical requirements of the RFP. After an extensive procurement process CMEC/GE emerged as the most responsive contractor with the most bankable commercial package.
(b) Executed EPC with CMEC and GE respectively as the Turbine supplier: Based on the international competitive bidding process followed by an intense due diligence, CHINA 1\-1:\CI IINi RY ENC;INNNRIN(: CORY( )R.\'i to iN ("CMEC") was selected as the preferred bidder with GI{NuR.\t. EI.I?Critic ("GE") as the Wind Turbine Generator (\\TG) suppler to undertake the project on a turnkey EPC basis. A consortium between General Electric International Operations Pakistan (Private) Ltd and General Electric International Inc was selected for provision of the O&1\I services. Definitive, legally binding, fixed price, non-escalable EPC Agreements were signed between the parties on August 27th, 2011.
General Electric ranks as one of the world's leathns wind turbine suppliers boasting a
product portfolio
of %%.nd turbines with rated capacities ranging from 1 .5 M\\' - 4.I \f\\ and support services extenditiL,, fro m d e velopment assiat an cc t o operation and maintenance . In addition, CNIFC pt .ssesses a market edge in export of complete hydro and thermal plants (. 111d equipment and cons tru cuon of a wide va riet y of engineering projects.
(c) Executed operations and maintenance ( the O & M) agreements with world class operators ( General Electric): Considering that General Electric is the wind turbine OEM for the project and one of the leading wind power O&M companies in the world, the Project Company has contracted the operations and maintenance of the Facility to General Electric by: (i! appointing General Electric as the designated subcontractor to care' out the O&.M of the Facility during the first 2 years of commercial operations; and (u) directly appointing General Electric as its contractor for the O&A1 of the Facility from \'e:irs 3 to 10 following commercial operations date. (d) State-of- the-art Wind Turbine - GE 1.5 XLE: The design used by the GE 1.5xle \VTG is aimed at achieving high safety and environment controls. Moreover, as per the project Company's analyses, the equipment is suited to the conditions at the Project's Site. The GE 1.5xle \X TG is part of General Electric 's 1.5 M\V series of \X'TGs. The 1.5 M\V series is General Electric ' s most widely deploy ed wind turbine i.e. more than 16,51)1) \V TGs installed globally and is known for its:
0J 1)
20
conformance and compliance to the International Electrotechnical Commission (the IEC) standards; high availability in a variety of wind classes; and sharing of components that en<ures consistent workhorse reliability, ease of maintenance planning and high commonality in spare parts. (e) Reliable and Efficient Electrical Balance of Plant : The Sponsors have demanded of the EPC Contractors to ensure the highest levels of workmanship and compliance with the most stringent of standards employed internationally for development of wind power projects in development of the Project so as to ensure that the Project is not subject to any operational issues during the life of the Project. In this regard, CI\MEC has agreed to procure the electrical balance of plant equipment from one of the leading European electrical equipment manufacturers ie. ABB, Ariva or Siemens. With the reliability of European electrical balance of plant equipment and state of the art wind turbine technology from one of the leading \t'TC manufacturer, the Project has significant advantage in terms of technology and equipment of the plant. () Reputable sponsor with unwavering commitment to wind energy : The Sapphire Group (the Group) is one of the largest textile groups in Pakistan with a business history of more than four decades. The Groups' core business is textiles and covers the complete textile value chain. In Fact, Sapphire is the only Pakistani group to have a presence in all textile sectors, comprising knitted apparels, woven apparels and home textiles. The Group has a total of twenty-rvo manufacturing facilities in Pakistan employin,t more than I4J)i)1i people
has a!read, t,IIli eci two the enertnv sector by establislur g a 225 Itlll'' thermal power plant using GE' turi'ines . The project has been developed as a joint venture with DAG Bank, German,., and a hhddle Eastern investment house. The power plant achieved COD in the Ialt quarter of 2009 and is in operation since then. Slnnhtre
(g) Strong Project Team : The Project Company is advised by leading consultants as Project advisors who have played it key role in the development of wind energy in Pakistan. The Project advisors are presently also advising various stakeholders in other Wind IPPs and are playing a pivotal role in the consummation of some of the upcoming projects in the industry. Technical Consultant - SgurrEnergy is a leading independent multi-disciplinary engineering consultancy specializing in renewable energy. SgurrEnergy has the capability to deliver at every phase of a project, from the early stages of site selection, feasibility and design right through to project management of the construction phase and operation and maintenance. Their highly qualified team of over 100 consultants has extensive UK and international experience providing consultancy services across 6 continents in over 30 countries. To date Sgurrlnergy has assessed over 40,000MW of renewable energy development internationally and this figure is growing rapidly every month. Legal Consultant - Rizi, Issa, Afridi & Angel has been selected to provide legal support on all aspects of the Project including Project documentation, regulation and Financing matters. Rizi, Issa, Afridi & Angel has been actively involved in power sector ^^ ? 1 21
projects and has advised various project companies / sponsors, lenders and the Government of Pakistan on various transactions and matters. Financial Consultant - The Project Company has chosen Bridge Factor as their Financial consultant for the Project. Bridge Factor provides capital & financial solutions to companies across a diverse range of industries and has a specialized team with particular strengths in corporate strategy, capital restructuring, corporate finance, divestments, and mergers and acquisitions. Bridge Factor has in depth knowledge of the local power sector and has been working with wind power projects in Pakistan for the last 5 years. They have also assisted various thermal power projects in achieving financial close.
!t
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TARIFF PETITION
4. RATIONALE FOR WIND POWER

4.1 RATIONALE FOR WIND POWER
4.2 PAKISTAN'S CURRENT ELECTRIC POWER SHORTAGE

Pakistan currently has 21.593 G\V of installed capacity for electricity generation. Conventional thermal plants (oil, natural gas, coal) account for 67.5% of Pakistan's capacity, with hydroelectricity making up 30.36% and nuclear 2.14%.
Pakistani government estimates that by 21)14, Pakistan will have to increase its generating capacity by more than 5ii% to meet the increasing demand. Pakistan's huge energy crisis is jeopardizing its economic progress and social development. The major reasons for the energy crises are the lack of investment in Power Sector, non development of renewable energy sector i.e. Hyde], Wind & Solar etc and the depleting Oil & Gas reserves. It is imperative for Pakistan to look for indigenous/cheap energy resources for sustainable growth through self-reliance. One of the utilizable resources in the short term is wind power generation. Although it is a new technology in Pakistan, it has a proven track record globally and is recognized as a commercially viable technology. With over 150,000 N RV installed capacity around the globe and over 36,000 M\\' of installed capacity in India and China alone, the case for development of wind energy in Pakistan is very strong. 4.3 WIND POWER PROJECTS -A NATURAL CHOICE
a T o ensure a sustainab le e ..errY ' funtui -c for PakistanIt is necessary , that he energy sector ., i
be accorded a high priority. It is considered that wind power generation could become ,_ a ;i);,)ic_ ^.,,;i contributor to 1'akis,an's electricity supply in the near future. The development of wind generation pre ejects supports the environmental objectives of the Government of Pakistan by,:
(a) reducing dependence on fos'il fuels for thermal power generation; (b) increasing diversity in Pakist.n's electricity generation mix; (c) reducing green house gas emissions through the avoidance of thermal power generation; and (d) helping in reduction of the exorbitant trade deficit. 4.4 THE WIND POWER GENERATION POTENTIAL & GOVERNMENT OF PAKISTAN'S SUPPORT The wind power generation program in Pakistan was initiated around five years ago by installation of wind measuring stations in the coastal areas of Sindh, Pakistan. The energy potential of 346,000 MV(' in the country is estimated by National Renewable Energy Laboratory, USA and onl', the Gharo - KetiBander - Hyderabad wind corridor (the \Vind Corridor) has a potential of 50,000 MW of wind power generation. If harnessed adeciuately, wind enerpy alone would eradicate energy shortages in the country. The Government of Pakist.tn is currently looking to build wind farms in the
(fi(I L) 0
1)
23
\\'ind Corridor, some of which : re regions where electricity supply through the national grid has been a challenge.
The Government of Pakistan has clearly articulated its support for the development of renewable energies. Due to the fact that wind energy is one of the most economical and efficient of renewable energy production techniques, the focus is on supporting the development of wind farms through independent power producers ( the Wind IPPs).
4.5 WORLD CLASS EPC CONTRACTOR; FIRM EPC COST AND FIXED COMMERCIAL OPERATIONS DATE
4.5.1 EPC Contractor Selection - The International Competitive Bidding Process

S\XTCL adopted International Competitive Bidding to select the Contractor for the Project. The objective of International Competitive Bidding was to provide all eligible prospective bidders with timely and adequate notification of the S\X'PCL's requirements and equal opportunity to bid for the required works and select the EPC Contractor that offered the best I:PC: solution at the least price.
In compliance with the high standards of Procurement procedure, SWPCL implemented a one stage bidding process, where only bids that passed technical requirements were selected for financial and commercial evaluation. A detailed and comprehensive Request for Propo^:l ("RFP") was developed The u Fn c ,,
te c hnical
Stiiutcs
w ith International and Pakistani sta,^.Itr;'; Sgur. r.>êirr, r.ner,r<, UK, who are Renewable Energy
of
requirement;
a state
of
the art
\\'ind
Farm to compliance
specialists, developed the technical RFP. A standard Turnkey EPC Contract was also developed by Legal Counsel (Rirvi, Issa, Angel, Afridi & Co.) and Financial Consultants (Bridge Factor) stating legal and commercial requirements of the Project Company.
S%^ TCL engaged in a lengthy and time-consuming process for the development of detailed RFPs and only those bidders, which complied with RFPs, were selected for financial and commercial evaluation . T his process adopted by Sapphire is consistent with International Competitive Bidding (ICB), one stage bidding process. Six internationally renowned Wind Turbine Generator (\WWTG) manufacturers interested in providing EPC turnkey solution in Pakistan were shortlisted to participate in the bidding process. These bidders included: 1. Vestas; 2. Siemens; 3. Nordex; 4. Siemens; 5. Goldwind; 6. Alswaedv Electric (SWEG); and 7. General Electric
03 'r
24
Due to S\V T'CL's efforts and resources employed on the Project, a bid bond of US$ 500,000 was requested from all the bidders to participate in the bids, to ensure that only the serious bidders bid for the project. A detailed and long diligence process of evaluation of all the bids was carried out to select the most responsive bid. The criteria for selection of contractor was divided into two sections i.e 'T'echnology and Commercial. The Technology and Commercial Selection criteria used to evaluate the bids was as follows 4.5.1.1 Technology Selection Criteria A range of technologies were offered to S\VPCL in the bids, which included, inter alia, from I N RV to 2.5 Megawatt \VTGs, synchronous or asynchronous generators and geared or gearless \X'TGs. SgurrEnergy, evaluated all the technologies offered taking into account the following factors; (a) equipment to be of latest technology , megawatt class and high efficiency; (b) compliance of the proposed \X'TG with local wind conditions in Pakistan, (c) reluctance of various \\'TG <uppliers to participare in projects in Pakistan; (d) references and experiences of the wind turbine manufacturers under similar environmental conditions (e.-,. temperature, wind farm size; area); (e) sufficient track record of the turbine type: (f) commitment to the market: ,villingness to commit to Pakistan market;
(g)
(e)
energy output with warranted power curve and performance warranty; grid compatibility;
(1) delivery time i .e lead time and conditions to be fulfilled in order to have the agreed delivery time started; ind
(i)
suitability of operation and maintenance concept for the size and location of projects with suitable avaiiabiliry of spare parts , consumables and main components.
4.5.1.2 Commercial Selection Criteria
The process adopted for evaluation of the Commercial Bids included:

(a) An in-depth review of the commercial terms submitted by each bidder to ascertain their financial and commercial implications on the overall project
13 c'35
25
TARIFF PETITION
(b) Comprehensive comparison of the commercial aspects of the bids submitted;
(c) Comparison and correlation between the bids submitted earlier with the revised bids;
(d) Division of commercial terms into subcategories with each being allocated points (further sub-divided into q,ialitative and quantitative) based on their relative importance to the o%-erall commercial viability of the project; and Application of a relative marking system through which the highest marks were awarded to the most compliant bidder and the remaining bidders were allocated marks relative to the highest bidder. 4.5.2 The Selected EPC Contractor - (_I IIN:t M.\CI TIN(?R)'ENGINF.F.RINCG CORPORA'T'ION After an intense proposal evaluation and thorough due diligence process, with an objective of bringing a world class tad bankable turn-key EPC solution to Pakistan's wind sector, China Machinery Engineering Corporation ("CMEC") was finally selected as the EPC contractor with GE Energ ("GE") as the Turbine supplier for the Project. 4.5.3 'The Selected Technolot?y
MANUFACTURER General Electric
'IND TURBINE GENERATOR A GE 1.5 xir ,Br. ^ T'!v ilEiiriT ; 80 meters
UMBER OF TURBINES TOTAL INSTALLED CAPACITY
33
49.5'JW t
The GE 1.5xIe \VTG is part of General Electric's 1.5 MW series of \X'TGs. The 1.5 M\X' series is General Electric's m,,st widely deployed wind turbine i.e. more than 16,500 \VTGs installed globally and is in conformance and compliance to the International Electro technical Comnussion (the IEC) standards. 4.5.4 CMEC - Introduction China machinery Engineering Corporation (CMEC) was established in 1978, as the first large national corporation integrating foreign trade with industry , CMEC is a large global conglomerate with the engineering contracting as its core business and its main business includes import and export trade, R & D work and design as well the international service. As a well-known international engineering contractor, CMEC ranked 3rd among the top fifty China's enterprises listed by the Ministry of Commerce of China in terms of the business turnover completed in foreign engineering contracting in 2008.
26 0j0 f ^
Engineering News-Record, a famo.ls magazine in the United States, has listed ChfEC among the largest 225 contractors i:l the world for several consecutive years. CAIEC has expertise in international engineering contracting , complete plant export, import and export of electromechanical products and is ranked among the leading contractor particularly in turnkey contracts for the international power engineering and large infrastructure projects. 4.5.4.1 Extensive Experience in International Contracting In Power Sector In the 1980's, Cb1EC successfully exported the first set of 210M\V thermal power plant using seller's credit. In the 1990's, CNIEC completed over 320MW thermal power generating units in the international market. 4 sets of 30MW hydropower units were contracted in Africa. The combined cycle power plant of first dual-fuel 6FA gas turbine units was contracted by CM CC, which was first of its kind in the world. Power stations with 600MW sub-critical coal-fired generating sets and 600MW sub-critical lignite generating sets were exported to the international market. 4.5.4.2 CMEC - International Markets Expertise
CMEC is engaged in the business of acting as :Hain contractor of the international engineering contracting and the export of complete plant. Its business scope covers over 120 countries in five continents worldwide. The business sectors CMEC is involve in include power generation, transmission and transformation, light industry, textiles too 1 11''AAin L -g malerialg corailway, Muni xuCu, harbour,
telecommunication, broadcasting and TV, shin-building metallurgy and boiling.
With 23 wholly-owned and holdine subsidiary companies in China, 11 wholly-owned and holding companies and 11 representative offices based in other countries of the world, Ch1EC has grown and developed into a comprehensive enterprise group linked with property ownerships , pillared by foreign trade and integrated as one entity with trade, industry, science , technology and services.
4.5.4.3 CMEC - Quality

CMMEC has DIN ISO 9001 certification covering the planning, supply , construction and start - up of all electrical and automated systems as well as infrastructural activities related to wind energy systems and wind farms . CMMEC follows its corporate ideal of "Create ideas achieve dreams" and "to improve people's quality of life" as social responsibility , continuing commitment to mutual benefit and common development, harmony and progress . Adhering to the corporate culture of " people-oriented, innovation, competition, cooperation , integrity, dedication , harmony", and strive to become an international project contracting , international trade and related services in the forefront in China and of world- renowned international enterprise group.
27
TARIFF PETITION
4.5.5 GENERAL ELECTRIC
General Electric is among the world's leading suppliers of power generation technologies including coal, oil, nuclear energy, natural gas and renewable sources such as water, wind, solar, geothermal and alternative fuels. With over 13,500 wind and 3,600 hydro turbines, their installed capacity of renewable energy exceeds 160,000 M W. Building on a strong power generation heritage and spanning more than a century, General Electric wind turbines have delivered proven performance, availability and reliability. As one of the world's leading wind turbine suppliers, GE Energy's current product portfolio includes wind turbines wiih rated capacities ranging from 1.5 Nf\Y! - 4.1 NfW and support services extending from development assistance to operation and maintenance.
4.5.6 WORLD CLASS O&M CONTRACTOR
Considering
that GE is the
manufacturer of the \VTGs, the operation and
maintenance ( the O & M) of the Facility has also been contracted to GE ( the O&M Contractor). GE in its global structure for providing O&M services has allocate. Pakistani W ind Energy Market to its West European Region and has committed to provide state of the art O&M services from its East European regional head of Paris.
GE in its commitment to the Pakistani Wind Energy Market, has signed an O&M Agreement for tens years. The 0&-%I Contractor has, as part of its obligations under the C1&M Agreement, guaranteed the performance of the ;c ^...Lt for the contracred period, thus minimizing the techiucal operational risk of the Project. The O&i\1 Agreement covers minimum performance standards of the Facilirv and provides a complete turn-key O&NI solution ff ^r the Project.
4.6 THE SITE The Project will be located at Jhampir , District Thatta , Province of Sindh ( the Site) in the Wind Corridor . The Wind Corridor is identified by the AEDB as a resource of high wind regimes with a potential of wind power generation of more than of 43,000 M\Y'. This area has been extensively surveyed and is identified as having strong potential for sites of several wind farms. In view of Sapphire's commitment to the Project, AEDB handed over Sapphire the physical possession of Site on April 2(108, as evidenced through the document dated April 5, 2008 executed between AEDB and Sapphire. The Site for the Project is located in the south-eastern part of Pakistan between Hyderabad and Karachi, approximately 100 km inland from the coast in a semi-desert area with rare vegetation. The nearest settlements are Jhampir (2.5 km southeast) and Nooriabad (22 km north-west). The Site itself is mostly flat with a wadi along the northern boundary line of the Project Company's development area and a low dune crossing it in the western part.
0 I,
^g
SAPPHIRE WIND POWER COMPANY LIMITE D TARIFF PETITION
The Site area is a merely wide plain between the river Indus and a more hilly region westward . There is only sparse vegetation except on irrigated land. Some detached houses or hamlets are scattered over the more fertile areas . The only greater settlements nearby the Site are Notiriabad and Jhampir. Access from Port Qasim and Karachi port to the wind farm Site is possible through the Super I lighway. A 20 km lon:J, access road links the Super highway to the Site. .Additionally, main railway track passes closely t:, the wind farm with Jhampir Railway station only 2 Kin away from the Site.
T! e foi!o
t,,g m ;' ; ;iii lmpres,ion of the area.
Figure 1.3: Location of the WF Site marked as WF FFC
03 "1
29
TARIFF PETITION
4.7 ESTIMATED OUTPUT
In line with AEDB's guidelines, S\\ PCL's technical consultant M/s Sgurr Energy UK (one of the world's leading consultant on wind energy technology) carried out detailed evaluations to estimate the energy production for the Project, based on: (a) the selected GE %X'TG; (b) the Site conditions; and (c) micrositing.
The summary of the results is as follows:

MANUFACTURER W IND TURBINE GENERATOR HUB HEIGHT UMBER OF TURBINES TOTAL INSTALLED CAPACITY ESTIMATED ANNUAL General Electric
GE 1.5 xle 80 meters

33
49.5 I\1\\'
ENERGI Year
1 - 138.8 G\X`h
PRODUCTION ( NET) PER ANNUM

CAPACITY FACTOR
Year 2 - '?U - 140.9 GVi:

32. , i)
It is pertinent to mention here that Airing the first year after COD, the wind turbines require frequent maintenance / tune up, / trouble shooting. This is a common phenomenon experienced with wind turbines worldwide. Taking into account the enhanced outages of the wind turbines, the energy production estimate for the first year of operation is 138.8 G\X'h, which has been used to determine the tariff for the first operating year.
4.8 PROIECT COST AND CAPITAL STRUCTURE
Based on the assumptions contained in this Tariff Petition and in light of the proposed discussion contained in Scction 5 (Project Cost & Inr'eslmen/), the proposed Project cost is USD 12 8.8 (United states Dollars One Hundred Twenty Eight point Eight million Only ) ( the Project Cost). The planned financing of the project Cost is by: (a) 25% equity ( the Equity); and
(a) 75"-% debt ( the Debt).
fl
30
TARIFF PETITION
4.9 REFERENCE GENERATION TARIFF
In accordance With NEPRA' s determination of tariffs for other Wind IPPs, the Reference Generation Tariff has all the required charges. The Reference Generation Tariff, as approved by NEPRA, will be integrated into the EPA. The Project Company hereby respectfully requests NEPRA to kindly ensure consistency between the adjustment formulae and indexations to be applied to the Reference Generation Tariff normally conveyed to the petitioner in NEPRA's tariff determination order since these formulce and indexation will also form part of Schedule I to the EPA. Consistency must therefore be maintained, as requested, between NEPRA's tariff determination order and Schedule 1 to the EPA. 4.10 CLEAN DEVELOPMENT MECHANISM (CDM) ASPECT Section 8.3.3 of the RE Policy 2006 states:
...all qua/ inQ Renewable Energy (lbe RE) project shall be eligible forfnancirt^ tinder the Clean Development Nlecbanisna (C-DA1) and will be encouraged to register for Cerl fed Emission Reduction (CER) credits with the CD 11 Executive hoard, either co/%clirely or individtta/!y. 7/,e Cot entment shall' a/so stave, in co/lar'oration uilb international deve/opment agencies and to the extent possible, to_ facilitate project applrca<'ons for such carbon rredils in order to reduce the associated initial transaction costs /or project sponsor. Importantly, as this policy creates sign icant incremental costs for the RF power, purchaser (hither !arch.. resource availubil. ; ks, backrrr dower provi.rinn,
aj)propriute that any carbon credits thus obtained by RE 11T., be utt/i ed ,r party ol/ret th burdn so as to Lwpr^c tt, the ecoilor/l:i :wspetrlireness of RE based yni /power /or both the rate payers and the producers... "'L 1:'hile it appears possible that the Project may be able to realize monetary gains from t uch carbon credit schemes, the actual timing, amount, and other details of the outcome are quite uncertain at this point. It is thus proposed that the Reference Generation Tariff for the Project he approved irrespective of the outcome of the carbon credits. However, if any CER related revenues are realized , it is submitted that they will be shared as per the policy of the Government of Pakistan.
!r4nSr^sr/o;t and iii/en UrrlleCflolt ttlt. rartnr^;; l.. . .^, t, trf ucrJ7i[rr
l'
31
5. PROJECT COST AND TARIFF

5.1 PROTECT COST SUMMARY The total Project Cost, expressed in United States Dollars, has been calculated after thorough analysis, evaluation and understanding of the dynamics that affect the development and operation of a wind farm. The reference exchange rates used to convert the relevant costs into United States Dollars are USD 1 = PKR 86.2. 5.1.1 For NEPRA's benefit and approval, a summary of the Project Cost is given below:
5.1 DETAILS OF PROJECT COST
5.1.1 EPC COST

Breakup of costs associated with each Contract forming part of the turn -key EPC entered into by the Project Company is provided below:
()
z1
12
Note: (a) the turnkey price being charged by the EPC Contractor for the Project is based
on firm legally binding offshore equipment supply and onshore construction services agreements (the EPC Agreements) executed between the Project Company and the EPC Contractor; and (b) the L/C confirmation charges to be incurred on the amounts payable to CMEC under the EPC Agreements. The requirement to have the L/C confirmed through an international bank has specifically been requested by CtIEC taking into account the recent credit ratings assigned to Pakistan by Standard & Poors and Moodys. The Offshore Cost represents the cost of 33 (Thirty Three) GE 1.5 xle \VTGs, 99 (Ninety Nine ) GE 1.5 xle blades (82.5 m dia.), electrical equipment, together with ancillary equipment and other goods, systems and machinery and includes the cost of, inter alia, the erection , testing, completion and commissioning of the equipment and construction of the Facility that is c.ipable of fulfilling the intended purpose. It is highlighted that the Sponsors have demanded of the EPC Contractors to ensure the highest levels of workmanship and compliance with the most stringent of standards employed intematidnally for development of wind power projects in development of the Project so as to ensure that the Project is not subject to any operational issues during the He of the Project.
The EPC Contractor, in order to comply with the Sponsors requirements selected various manufacturers based out of Europe for procurement of all equipment relating to electrical balance of plant. The I:PC Contractor option to procure equipment froth Europe as opposed to Itst-t Sun,]" ;; 'heir factuues m C__... h'.' ., anIre.: I.wrir,^ j vendors in Clung was motivated simply to ensure.tliai the equipment meets the highest bench"-'...:s set by the international wind industry.
The Project Company is contractually committed to pay mobilization advance of 25"u of the total EPC Price on achievement of Financial close.
5.2 NON - EPC COST

The Non EPC Cost includes the cost of items that are not part of the EPC Contractor ' s scope of work pursuant to the executed EPC Agreement. Such costs mainly include, inter alia, the costs of
( n O`/t.
33
TARIFF PETITION
(a) Fixed Assets T his includes cosi of various instruments , equipment and other assets ( excluding such assets that are supplied under the EPC Contract) and comprises of: Vehicles, Office Equipment, Furniture, Electrical Appliances; and Facility connectivity for remote monitoring (b) Project Administration Cost Administration cost at the site office during construction includes the accommodation and living expenses comprising the utility of the O&M staff, vehicle maintenance and running expenses, broadband connection, Personnel protection equipment at the site etc. The S\VPCL' s head office expenses are also included in the cost as the head office is required to maintain coordination with the Project Company ' s Lenders, shareholders and various governmental agencies and shall work during the whole process including determination of tariff, signing of EPA / LA and other Project development activities. _ (c) Cost of Accommodation This portion of the Non EPC Cost includes costs associated with rent, utilities, equipment inspection, vehicles fuel & maintenance, and other allied expenses during the construction period Accommodation cost also includes the construction cost of a residential facility for providing housing to the 0,11,1M staff. A 'fit for purpose' residential facility has been planned at Project site toy accommodate necessary staff. The facility is not intended to cater for the families of the operating staff.
(d) Cost of Security Arrangement
Pakistan is going through a tough time with respect to security situation in the country. This is one of the major impediments in attracting foreign investments. The Project Company is also concerned about the security of its personnel. Therefore, security arrangement costs become one of the most important components of the Project cost. This represents the costs associated with providing security at offices, accommodation and site. It is highlighted that in view of the present security situation in Pakistan, the provision of security by the Project Company is considered critical. The Project Company has hired the services of a dedicated Securit - Manager to oversee and monitor the security related matters along with other security staff. ( e) Optic Fiber for Connection with \VAPD A In accordance with the requirements of the EPA, the Project Company is required to provide connectivity to the Power Purchaser through fiber optic. The
34
total deployment cost (including equipment, materials, and laying of the fiber optic) has been included under this head.
5.3 PROJECT DEVELOPMENT COST The Project Development Cost includes the costs incurred for the purpose of Project development and includes all costs, fees and expenses incurred or to be incurred for such purpose. These costs include, inter alia, costs of feasibility studies, topographical survey of land, preliminary geotechnical investigation of land, Grid Interconnection Studies; fees of consultants; costs related to the performance guarantee to be furnished to AEDB; costs related to the Power purchaser letter of credit to be furnished to the Power Purchaser pursuant to the provisions of the EPA; various regulatory fees to be paid to NEPRA; costs incurred dw ing Project Company formation; and costs relating to various permits for the Project. S\1PCL has engaged highly reputed and leading consultants as Project advisors that have unmatched expertise in planning, engineering , financial , legal and technical matters. Considering that the Project will be one of the first \Vind IPPs to be set up in Pakistan, Sapphire has endeavored to put together the best team of consultants for the Project to ensure that wind power sector in the country is developed. ':nd the Project is bankable from all aspects.
5.4 LAND COST Land cost has been incorporated lit this petition as the Project Company has leased 1,372 acres of land of the Project from AEDB together with stamp duty, registration fees and costs of survey and demarcttion of the land for the Project, which has already
been paid to AEDB.
I rl.!
tt
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35
5.5 TAXES & CUSTOM DUTY
(a) Custom Duty Rules regarding customs duty on renewable energy projects are driven based on the information provided under the RE Policy, Guidelines for Determination of Tariff for Wind Power Generation 2006 ( the Guidelines ) and the Government of Pakistan, Federal Board of Revenue Statutory Regulatory Order (SRO) No. 575(1)/2006 dated June 05, 200('. Following table highlights and summarizes the fiscal incentives/exemption available to renewable energy based power Projects regarding customs duty: Fiscal Incentives / Exemptions on RE Based Power Projects
0
Extract from Para 8.6.1 Extract from Fiscal Regime Extract from Para 11 (5% customs duty)
Machinery, equipment and spares meant for initial installation, balancing, modernization, replacement or expansion of Projects for power generation through oil, gas, coal, wind and wave energy including under Construction Projects which entered into an implementation agreement with the Government of Pakistan
No customs duty or Customs duty at the sales tax for machinery rate of 5% on the equipment and spares import of plant and (including construction equipment not machinery, equipment man.ifacrured locally and specialized vehicles imported on temporary basis) meant for initial installation or for balancing,
rnodernizauo11,
maintenance, replacement, or expansion after commissioning of Projects for power generation utilizing renewable energy resources (specifically, small hydro, wind, and solar), subject to fulfillment of conditions under the relevant SRO
Para 13 (0% customs duty) Machinery, equipment and spares for initial installation, balancing, modernization, replacement or expansion of Projects for power generation through nuclear and renewable energy sources like solar, wind, micro-hydel bio energy, ocean, waste-to-energy and hydrogen cell etc.
It transpires from above that the three documents (the Policy, the Guidelines and the SRO) when read in conjunction gives rise to an ambiguous situation, as the Policy provides for NIL customs duty, the Guidelines provides for a 5% customs duty, and whereas the SRO has loth the NIL and 5% customs duty rate. The Petitioner has assumed (J customs duty regarding imported plant,
TARIFF PETITION
equipment, machinery etc. in accordance with Para 13 of the SRO read with the Policy. However, as the Guidelines and Para 11 of the SRO provide a 5% customs duty rate, in view of this apparent ambiguity the petitioner prays NEPRA to allow adjustment of capital cost of the Project and the tariff, in each case, for actual customs duty paid, at COD. (t)) Special Excise Duty Special Excise Duty is assumed at 0%, as the same is correlated with the rate of customs duty (assumed 0"1%). In case the Project has to pay 5% customs duty (in the event the customs authorities bring the import under the ambit of Para 11 of the SRO) then the Special Excise Duty at 1/" is leviable. Accordingly, the Petitioner prays NEPRA to allow adjustment of capital cost of the Project and the tariff, in each case, for actual customs duty paid, at COD. (c) Sales Tax No Sales Tax is assumed on import and local supply of the imported plant, equipment, and machinery etc., based upon the SRO and recent Notification SRO 575(1)/2005 issued by the Government of Pakistan, Federal Board of Revenue.
Furthermore, for the purpose of this tariff petition, the Petitioner has not taken into account the impact (if any) of the enactment of the Sindh Sales Tax on Services Act, 2011. As the law has only very recently been enacted, the true implications and procedures on applicability are not clear at this time. However, in Siu__ t,i ., O_ case tu u. v te 11grCemen[ , forming part of the EPC A gree^^ênts greements ^cservices ( b e ing
performed in the province of Sindh) is brought into the ambit of the Sindh Sales Tax on Services Act, 2011, it is prayed to NEPRA that the tax charged to the Project be allowed as a pass-through at the time of tariff true-up. (d) Income Tax Advance Income Tax @ 0.00%',% (Zero Percent) has been assumed at the time of import of machinery, equipment, goods, spares and materials for the Project. (e) Sindh Infrastructure Development Surcharge (SIDS) 0.850';x" of the imports for the Project have been assumed as Sindh Infrastructure Development Surcharge (the SIDS). The chargeability of SIDS is based on the weight of the imported equipment / items and the distance of the Site from the port. Since the imported equipment is expected to be of haulage load and has to travel considerable distance from the port, maximum rate of SIDS has been assumed in the Project Cost.
(t) Federal Excise Duty (FED)
FED on the payments to be made to (1) local financial institutions; and (2) insurer's has not been assumed. In case FED is levied on the financial advisors and lead arrangers' fee, debt arrangement fee and commitment fee, L/C
. J 0't I
37
TARIFF PETITION
commission and charges, loan administration charges, and insurance premium the same should be treated as pass-through under the tariff.
5.6 PERMANENT WORKING CAPITAL Inflow of Funds During Operating Period: Under the terms of the EPA to be executed between the Project Company and the Power Purchaser, the Project Company shall invoice the Power Purchaser for the settlement of the Monthly Energy Payment on or after the first day of the month following the month to which the Monthly Energy Payment relates. The Power Purchaser has to make the payment of the same by the thirtieth day following the day of submission of the invoice i.e. 31" clay. Outflow of Funds & Requirement for Working Capital:
The Project Company is required to collect sales tax from the Power Purchaser on behalf of the Government of Pakistan and deposit the same by the 25"' day of the month to which it relates. I-Iowever, as explained above, the Power Purchaser is only obligated to make payment to the Project Company against the invoice raised within 30 days from the date of invoice - thus creating an inherent mismatch in the av:lilabihry of cash flows to the Project Company for settlement of lt; habitiitu2S.
ON
(b l
Furthermore, the Project Company would be making payments to the operations and maintenance contractor monthly 15 days in arrears whereas the same will be recovered front the Power Purchaser 30 days in arrears - thus creating a mismatch in cash flows and providing a further justification for working capital.
(c) The terms of debt financing stipulate repayment of debt on semi-annual basis commencing from COD. By the time the first repayment is to be made to the lenders, the Project Company would only have received 5 months of revenue in accordance with the 3t1- day payment terms under the EPA. Thus a permanent shortfall of 1 /6i1' of the debt installment would be created which the Project Company intends to fund through upfront permanent working capital; this requirement is sr.fndard in all Financing transactions of this type. (d) Finally, given the current ecf momic situation in the country and the problem of circular debt faced by the economy, it is highlighted before NEPRA that the Power Purchaser is presentlN delayed in making its payments to the IPPs (such delays amounting to months in aggregate in case of some IPPs), which has created substantial difficulties for such IPPs and has even caused some of them to default under their various contractual arrangements. Approval of a
TARIFF PETITIOPJ
WY 'orking Capital in the "1 otal Project Cost by NEPRA for the Project Company will not only help the Project Company in management of its cash flows but will also reduce its default risks emanating from the considerable lags in the receipt of payments from the Power Purchaser.
In consideration of NEPRA's views on commercial working capital lines, which have been disallowed to earlier projects, it is submitted that such permanent working capital be allowed to be injected upfront by the Project Company, in replacement of a revolving credit line from banks 5.7 PRE -COD INSURANCE COST Pre-COD Insurance Cost covers the insurance cost of Project Company's assets during construction and the same are incurred prior to COD. These cost estimates have been developed based on an offer received from one of the leading insurance companies in Pakistan. The Project Company, in view of the prt'ctices set by other IPPs in Pakistan and in accordance with the requirements sct out f;<< the Lenders funding the Project, intends to procure the following insurances during the construction phase of the Project: Construction All Risk Insurtnces (CAR); CAR Delay in Start-up Insurance; Terrorism Insurance; Marine and Inland Transit Insurance; Marine - Dela,-In Startup Insurances; and Coi,rprehensive General Liafnlin-. The premiums payable under the above stated Pre-COD insurances, does not include the administrative surcharge, the Federal Insurance Fee and the Federal Excise Duty, in each case, relating to the Pre-C( )D insurances , and the Petitioner prays that the same be allowed by NEPRA1 as part of the One-Time Adjustments allowed at the time of COD.
5.8 SINOSURE FEE
Sinosure is China's official export credit insurance agency, offering export credit and credit insurance. Sinosure insures both China's overseas investments and overseas investments into China, and guaranties both investment into debt and equity. Investment insurance is intended to provide the insured with risk guarantee when they suffer economic losses because of var, currency exchange ban, requisition, or breach of contract by the government in countries where the insured have made investments. It is designed to support and promote Chinese companies and financial organizations. According to the requirement of the Chinese government, loans arranged from Chinese Banks (such as in the case of this Project) are required to be covered under the Sinosure insurance. Due to the current social and economic scenario prevalent in Pakistan, the current rate for arrangement of Sinosure insurance for debt is 6.24% of International Commerce Bank of Chine (ICBC) exposure. The fee charged shall be
4!}
39
TARIFF PETITION
paid upfront and shall provide coverage for the entire term of ICBCs exposure in the Project.
5.9 FINANCIAL CHARGES
Financial Charges include the costs related to the Debt financing of the Project. Such costs include, inter alia, the lenders' up-front fee and commitment fee; charges related to various letters of credit to be established in favor of various contracting parties (other than L/C confirmation charges for payments to be made to CMEC as these are included as part of the EPC Cost;; fees payable and stamp duty applicable on the financing documents; agency fee; security trustee fee; Lenders' Project monitoring fee and the fees for the Lenders' various advisors. The financial charges incurred when foreign financial institutions are involved are on the higher side, however these financial charges have been thoroughly negotiated with the lenders and are in line with the prevailing market conditions and practices applicable for project financing transactions. The term sheets for arrangement of Debt financing signed with the lenders (attached as Annexure - E) stipulate the costs given below:
The Financial Charges proposed by the project Company for NEPRA's approval are in excess of 3% of the total Debt amount, normally allowed by NEPRA for locally financed project. It is submitted before NEPRA that the Financial Charges cap be enhanced for this project due to the following reasons: (a) The Project Company understands that NEPRA introduced a Financial Charges cap of `3% of debt amount' for 200 M\V thermal projects which had project cost of USD 200 million to USD 300 million. Apart from financial charges quoted as a percenta,,e ('o) of the debt/loan amount, all fixed financial charges (agency, trustee, monitoring, supervisory fee along with Lenders' advisors fee) were distributed over a debt of USD 150 million to USD 225 40
[; 5 1)
million, thus resulting in the financial charges being lower than the NEPRA introduced cap. In the case of wind power projects of 50 MW however, since the Debt component is much smaller, the cap applied for financial charges by NEPRA is easily breached and therefore unrealistic;
(b) The Project Company has included a foreign currency loan (i .e. Foreign Financing) in its capital structure in order to reduce the levelized tariff in comparison to the option of borrowing in local currency only. While the selection of a mix of Foreign Financing and Local Financing by the Project Company has resulted in the reduction of its levelized Reference Generation Tariff due to a lower cost of Foreign Financing borrowing, it is highlighted that the arrangement and commitment fees of Foreign Financing is significantly higher than that of th'r Local Financing (as is the case customarily) and has resulted in higher I'inancial`.Charges. Thus, while considering the low carrying cost and reduced levelized tariff resulting from the Project Company's selection of a mix of Local Financing and Foreign Financing, it is submitted that financial charges should not be capped and should be allowed at actuals, as the Project Company understands that the intention of NEPRA has been to ensure the lowest consumer tariff rather than preserving the sanctity of a mere cap itself.
(c) Additionally, it is submitted that there is a precedent. available in NEPRA's determination of financial charges cap for a hydel IPP (i.e. Laraib) where the financial charges were approved by NEPRA in excess of 3% of the debt amount.
5.10 INTEREST DURING CONSTRUCTION Basis for IDC calculations are set out below: 1 6-MONTFIKJBOR 13.38% 3.00% , -
ECO ICBC 6-MONTH LIBOR

0.48% 3.50% 1.001% 0.48% 4.00% 1.00%
16.38%
4.98%
5.48%
Actual IDC, shall be subject to change depending on the fluctuations in base rate (i.e. 6-month KIBOR & 6-month LIBOR), funding requirement (draw-downs) of the Project during the construction perinnd, changes in Project Cost including changes due to Taxes and Duties, and variations in PKR / USD exchange rate.
IDC is an cstimatetl^fgu, ,, which is adjkstabk at CDIQ yb, aril drawn ,dawn ! 4 Ib 4 ,Pm/ecf htl irrdron jPnud aftKr Ma NEPR^4 aIk w urtyiicnt for tht rake a^ 1he triilâ''o/ farii J"'fi
!,
ortfof am .c
i^'*lrtiyed'lhat
[151
41
SAPPHIRE WIND POWER COMPANY LIMIT ED
TARIFF PETITION
6. PROJECT FUNDING STRUCTURE (DEBT &EQUITY) 6.1 THE FUNDING ARRANGEMENT The Project Cost will be funded on the basis of a Debt: Equity ratio of 75:25, thereby resulting in the following capital structure for the Project:
6.2 DEBT AND EQUITY FINANCING The envisaged debt : equity structure of the Project is 75: 25 implying a total debt requirement of USD 96,653,672 (based on a project cost of USD 128 .872 million). ICBC and Eco Trade and Development Bank will contribute 87.94 % of the required debt ( that is USD 85.00 million ), while a term sheet for arrangement of the remaining 12.06 % of long-term debt has been signed with the leading local banks. The estimated amount to be raised from local lending institution is USD 11.66 Million (approx. PKR 1,004 million ). It is pertinent to mention that the debt raised through ICBC and Eco Trade and Development Bank will be denci ninated in USD ( repayment in USD, interest payments to be indexed to LIBOR) while debt to be provided by the local banks will be denominated in PKR ( repayment in PKR, interest payments to be indexed to KIBOR). However , regardless of the source of financing ( local or foreign), the Project will be financed 100% through Islamic modes of financing. Based on the current Project cost estimates, the equity required to be injected by the Sponsors amounts to USD 32.2 million. The Principles Sponsors, Sapphire Textile mills Limited will inject 100% of the required equity. 6.3 EQUITY PARTICIPANTS / SPONSORS
6.3.1 Sapphire Group

The Sapphire Group (the Group) is one of the largest textile groups in Pakistan with a business history of more than four decades. The Groups' core business is textiles and covers the complete textile value chain. In fact, Sapphire is the only Pakistani group to have a presence in all textile sectors, comprising knitted apparels, woven apparels and home textiles. The Group has a total of twenty-two manufacturing facilities in Pakistan employing more than 14,0(u) people.
t,5c:
42
SAPPHIRE WIND POWER COMP ANY LIMITED
TARIFF PETITION
The core businesses of the group are, Yarn of various varieties, Woven and Knitted Fabric Dyeing and Finishing of Fabric Both Woven and Knitted; Garment Manufacturing Home Textile Dairy farming Property Development The company also places high emphasis on occupational health, safety and protection of the environment and aims to deN elop fool proof practices that inculcate a culture of safe thinking and working in all fact-is of their operations. Currently, products manufactured at Sapphire units are exported to more than thirtyfive destinations across the globe . Sapphire has registered impressive growth in their turnover and the figure for 2010 exceeded US$ 530 million. This growth has been the result of excellent planning , employee - centric HR policies , minimizing costs by developing a transparent operating model and developing alliances with global leaders in diverse fields. Sapphire Textile Mills Limited (thc Sponsor or STML), being one of the leading companies of the Group, has implemented sound business practices based on principles of good corporate governance with total transparency in all operations. STN [L was incorporated in Pakistan on March 11, 1969 as a public limited company under the Companies Act, 1913 (now the Companies Ordinance, 1984). The shares of STML are listed on Karachi Stock Exchange. The mills, owned and operated by STML are located at:
Kotri,
Nooriabad, Feroze Watwan, Bhai Pheru, and Bhopattain , Lahore. STML is principally engaged in manufacturing and sale of yarn, fabric, and home textile products. Energy Sector Energy has been identified as a sect )r with high growth potential and action has been initiated to enter this field in the first instance. Sapphire has set up a 225 M'(' thermal power plant using GE turbines. The project has been developed as a joint venture with DAG Bank, Germany and a Middle Eastern investment house. The power plant achieved COD in the last quarter of 2009 and is in operation since then.
0 5) ,}
43
TARIFF PETITION
Captive Power Plant
The Group also owns and operates generating facilities having a total installed capacity of 65.3 1\1\V, break -tip (by fuel source) of the same is provided below: Furnace Oil - 25.8 MW, Gas - 22.2 MVI, and
Diesel - 17.3 M\V.

6.4 RETURN ON EQUITY Risk perceptions are high for investments in Pakistan energy sector not only because of the security situation of the country but also due to the issue of circular debt. Another risk perception is that there is no history of wind Projects in Pakistan. Considering the above it is proposed that an ROE (IRR based) of 18% net of withholding tax ROE (IRR based) be allowed to the Project Company. Moreover , in the past NEPRA hay allowed thermal / conventional power producers and hydel power projects an IRR of 15,'o and 17% respectively ; it is noteworthy that the data for hydrology in Pakistan is much more detailed and reliable (having been collected over several decades ) than the data for wind . Further, since the Project is based on power generation through wind ,. a sector in its infancy in Pakistan, the Project Company is proposing a return on invested equity of 18 % ( IRR), net of 7.5% withholding tax on dividends. The Tariff Standards prescribed under Rule 17 of the Tariff Rules require that the return on investment should be "commensurate with other investments of comparable risk". It is submitted that NEPRA has allowed 17% return to hydel projects where the hydrology risk and unforeseen soil conditions are both well mitigated under the Power Purchase Agreement and NEPRA's tariff guidelines which permit a "3 stage" tariff process permitting a reopening of the tariff parameters. As explained below, the GOP is only covering the wind speed while the investor is taking the risk of other wind characteristics. Accordingly, investment in the wind sector constitutes a higher risk investment in comparison to investments in hydel or thermal power projects, thereby, necessitating a higher risk premium. The discussion below highlights the salient arguments in favor of allowing 18% ROE (IRR based) to the Petitioner. 6.4.1 Medium Term Policy for Development of Alternative and Renewable Energy AEDB has already taken notice of the aforementioned situation and has proposed to the Government of Pakistan, under the draft of the Medium Term Policy for Development of Alternative and Renewable Energy, to increase the return to the sponsors to 18%. Section 1.13.9.2 of the draft Medium Term Policy for Development of Alternative and Renewable Energy states:
[) 7
(,
44
Quote
"the economic, social and environmental benefits of ARE, it is the policy of the Government of Pakistan to provide a rate of return in excess above that of conventional power during the lifetime of this medium term policy subject to a quot i which rule shall be used in tariff calculations. The A RE Rate of Return on Equity (ROE) for A RE Projects will be a minimum of 18% (the term ARE' means Alternative and Renewable Ene)gy'). "
Unquote
6.4.2 Wind Risk The RE Policy 2006 provided by the Government of Pakistan does not offer complete immunity to the equity investor against wind risk. The coverage is limited to variations in wind speed only and it does not take into account other factors, which can affect the energy output of a wind farm. These factors include, air density, wind frequency distribution, temperature, and humidity. This limitation in the wind risk coverage can have a detrimental impact on the IRlt of the equity investor. 6.4.3 Security Issues Over the last three years the security situation in Pakistan has been quite unpredictable. The security threats in the country have had an adverse impact both on the economy and on the cost of doing business in Pakistan. Most of the thermal IPPs being constructed under the Powe r Generation Policy 2002 have had to face the repercussions of the deteriorating security situation in one way or the other. The increased risk on the capital employed, coupled with the economic uncertainties (circular debt), justify an increase in the required rate of return to 18% (on IRR basis).
6.4.4 Higher ROE for Coal Based Projects

Project Company appreciates the fact that the government is encouraging development of indigenous resource based power projects. The most recent example of such encouragement is issuance of notification # PL-6 (71) / 2010 by the Ministry of Water and Power on March 8"2011 through which a USD based return of Twenty point Five (20.5) percent (IRR basis) has been guaranteed to indigenous coal projects achieving financial close by June 2014. Project Company feels that similar kind of encouragement should be allowed to wind IPPs, so that reliance on indigenous resources can be increased. In one of the last determinations carried out by NEPRA for a wind IPP, NEPRA had allowed a return of 17 percent (on IRR basis).
6.5 RETURN ON EQUITY DURING CONSTRUCTION (ROE DC) As per the RE Policy 2006, wind IPI's are allowed to claim return during the term of the Implementation Agreement commencing from the start date of construction i.e. the (late from which payments are made to the EPC Contractors. Therefore, the
^^:1[:^
45
SAPPHIRE. WIND POWER COMPANY LIMITED TARIFF PETITION
Return on Equity during Construction (ROE DC) will be accrued and shall be determined at actual at the time of COD based on the actual equity drawdown.
6.6 DEBT SERVICING
Industrial & Commercial Bank of China ("ICBC") and ECO Trade Development Bank ("ECO") have expressed their intention to contribute 87.94% of the required debt (that is USD 85 million), while a consortium of Local Banks have provided an indicative term sheet for arrangement of the remaining 11.06% of long-term debt.
Debt financing to be provided by each of the financial institutions is provided below:

`MILLION USD
ICBC i '
55.00
h
ECO ,
s ' . ;:
30.00 11.66 96.66
^r
T-07
u "'ma y !:;!
(a) Foreign Financing terms - IC:BC

YS
6 Month LIBOR
5.1)0% (margin of 4.00% + 1.00% for ADB REDSIP Guarantee)
RBp'
s $'; ^^
., .
20 consecutive semi-annual repayments ears 1.i% of the total Foreign Financing Sinosure coverage to cover the Political risk Commercial Risk coverage by ADB RI:DSIP Guarantee to tune of 100 bps O.i$0% per annum
GRAbWW OD -i.,. f SIN NIBS',', . î l ,
ADB
P >:''<;.'.'
?)l
Gv ',
CO
FEE
(^1t^
46
SAPPHIRE WIND POWER COMPANY LIAIITEI)
TARIFF PETITION
(b) Foreign Financing terms - ECO $ . ,t+L: } 6 Month LIBOR
4 . 50% (margin of 3.50% + 1.00% for ADB REDSIP Guarantee) . N I

CC ) ^
'.M3'
21) consecutive semi-annual repayments
(3
.I,- it 2 y ears
1.5% of the total Foreign Financing
AD
GU
IP '-` `' , `'

!;;,'
Commercial Risk coverage by ADB

REDSIP Guarantee in tune of 100 bps
CO-
0.50% per annum
(c) Local Financing Terms - Local Banks
.BAs
r^
3 Month KIBOR Y/U

21) consecutive semi-annual repayments
Ri^>P, G
.^
^ ?c
QA"" ^` 2 years
y 1
'F ` 0?5 % per annum Pre-COD: USD 23,000 per annum

USTft >';'. USD 17,500 per annum Pre-COD: USD 11,600 per annum
SE
MONITORING FEE`
The indicative term sheet for foreign and local financing is attached with the Petition as Annexure E 6.6.1 Asian Development Bank (REDSIP Guarantee) In view of the difficulties being faced by Renewable Energy Independent Power Project developers in arrangement of debt financing for implementation of their projects, Asian Development Bank (ADB), in cooperation with the Government of Pakistan (GOP) (through the Alternate Energy Development Board (AEDB)) has agreed to offer a guarantee facility to interested and eligible REIPPs (Renewable Energy Independent Power Projects) (the Renewable Energy Development Sector Investment Program Guarantee Facility, the REDSIP Guarantee Facility). Under the REDSIP Guarantee Facility, ADB will provide coverage to the REIPP lenders (Lenders ), at a nominal fee (Facility Fee), against non-payment by the REIPPs of up to 100% of the scheduled debt service payment (principal plus interest) which is solely a result of non-payment by the National Transmission and Dispatch Company (NTDC) ( or any other power purchaser supported by the GOP and acceptable to ADB) of amounts due under the IZEIPPs energy purchase agreement (EPA) for energy delivered or energy that could have been delivered (the Guaranteed Risk).
47
As the REDSIP Guarantee Facility can be used to provide coverage against loans provided by local and / or foreign banks, thereby ensuring that the cash flows required for making debt service payments are appropriately managed, ECO Development Bank and ICBC require the Project Company to avail the REDSIP Guarantee Facility as a prerequisite to their financing of the Project. Therefore, in the foreign financing from both ECO Development Bank and ICBC, the markup fee for REDSIP Guarantee Facility is included in the spread markup over the base rate. Due to the current state of circular debt issue in Pakistan, the Facility Fee for procuring the REDSIP Guarantee Facility is approximately 100 bps and will be applicable on the outstanding balance of debt plus accrued interest throughout the term of the loans.
6.6.2 Reason for using 6 - month LIBOR / KIBOR

The 6-month LIBOR and 6-month KIBOR has been used as the revenues of a Wind IPP are dependent on monthly energy produced - as monthly energy is dependent on the monthly wind speed, which in turn is subject to several variations, i.e. high revenues during high wind months and low revenue during low wind months. The debt servicing capability of the Project is severally hampered due to this variation in revenue generation capabilities of the Project. The Petitioner has opted for the 6month LIBOR and 6-month KIBOR, as this would allow the Petitioner to equalize the monthly cash flows of the Project, for meeting all the cost requirements of the Project.
(I5},
48
SAPPHIRE WIND POWER COMPANY LIMITEI) TARIFF PETITION
7. OPERATION COST
7.1 UNDERSTANDING & BENCHMARKS O&M expenses are one of the major unknowns for wind power developers in Pakistan. Till date no wind power project has achieved COD in Pakistan. It is important to note that O&M costs for wind power projects are not as low as perceived by many in Pakistan. Today's modern wind turbines are built from over 8,000 different components. Furthermore, unexpected components failure, especially electronic controls, generators, rotor blades etc. have, over the years, driven up operations and maintenance costs. This is even more critical in Pakistan where the high wind seasons is accompanied by high temperature months and the WTGs have to work at almost full capacity in this extreme weather. To substantiate the above data; the latest research report on O&M costs "The Wind Energy Operations & Maintenance Report 2011" states that true O&M costs of the wind industry are clouded in the world due to the fact that the majority of currently installed wind power capacity is only now coming out of warranty. No manufacturer is willing to share its actual O&M co,,rs in the warranty periods. To give an idea to the Authority as per the report 79 percent of the turbines in the world were under warranty up till June 2009. Therefore, it is difficult to get the real O&M costs for wind industry. The report also suggests that real-time O&M costs are far higher than originally projected in US - which is now one of the largest wind power markets. The report also indicates un-predicted component failure of WTGs as one of the key issues which escalates the O&M costs. According to the research in the report, O&M costs are, on an annual basis, around 3 percent of the total project cost as opposed to the initial estimate of one percent. In the last 5 years large wind turbines are being developed with lower cut-in wind speed in order to increase their pwer production and to drive down the cost of electricity. This trend in wind turbine size escalation has come with increased uncertainty regarding O&M activities. The fact that O&M costs for wind power projects tend to increase overtime has also been supported by finding recently released by the European Wind Energy Association in their report titled: The Economics of itend Energy. In view of the foregoing, the O&M costs suggested in the Petition are clearly well within international benchmarks. It is the humble request of the petitioner that the O&M costs presented below may kindly be allowed by NEPRA in order to ensure smooth, efficient, and effective operation of the Project. 7.2 BREAKUP OF O&M COST The operations cost of the Project Company comprises of the operations and maintenance cost and the cost of the operational insurances to be taken out by the Project Company. Break-up of the same is provided hereunder:
49
SAPPHIRE WIND POWER COMPANY LIMITEI)
TARIFF PETITION
USD IN THOUSANDS ( PER ANNUM ) YEARS 1-2 3-10 11-20 600 2,283 2,283
50
300
50
300
50
300
30 s 135 50 75 75
1,075 2,390 7.2.1 O&M Cost (Outsourced)
30 135 125 75 75
1,075 4,147
30 31 135 135 1,075 . 4,039
The Project Company is in the final stages of negotiating the O&M Contracts for which the price and commercial terms have been locked. The contract is expected to be finalized and executed within a fortnight upon which it will be submitted of the Authority as evidence of the proposed cost. The O&M arrangement has been structured into two separate contracts: (i) Years 1 - 2 (part of the EI'C) - being submitted along with Petition under separate cover;
(ii) Years 3 - 10 (O&M Contract) - to be submitted within a fortnight. The major variation in the O&M Outsourced Costs during the initial two year period and thereafter is due to the O&M being carried out by the EPC Contractor as part of its warranty obligations. From the third year onwards the O&M of the Project will be carried out by the O&M Contractor and reflects the contractors expectation of additional wear and tear of the part; due to the operations of the turbines and BOP equipment under the prevailing site conditions.
The prices provided above are based on the price agreed with the EPC Contractor and the O&M Contractor for performance of O&M services for the initial 10-year period. The prices agreed include the costs associated with scheduled maintenance, routine maintenance, services required for unscheduled maintenance and any spare parts and consumables required for carrying out the scheduled and routine maintenance. Upon completion of the 10 year O&M period during which the O&M Contractor will be responsible for carrying out the O&M activities, the Project Company will carryout a cost and benefit analysis of carrying out the O&M themselves or again outsourcing the work to the O&hI contractor. The decision to either carry out the O&M function in-house or through an external source will depend on a number of factors including
L160
50
(1) level of development of the local wind industry, (ii) availability of critical spare parts in the secondary market , (iii) presence of skilled manpower in the local market, presence of large cranes able to lift heavy components at heights of over 80 meters and above , etc. The Project Company optimistically estimates the cost of carrying out or out-sourcing the entire O&M function of the project to cost the same as for the period from year 3 to year 10. This estimate is based on the fact that the entire equipment of the plant including the \\TG' s, electrical and civil works would require considerably higher costs to maintain than during the initial 10 years and any saving from carrying out the O & M in-house ( as compared to using an outsourced service) would compensate for the additional costs envisaged during the later life of the plant.
7.2.2 Fixed Assets The Fixed Asset cost includes costs associated with vehicles required at Site; tools and inspection equipment for inspection of the energy equipment; and furniture and fixtures required for the offices to be maintained at Site, Karachi and Lahore. 7.2.3 Payroll and Allied Expenses This includes the costs related to salaries and benefits of all staff ( administrative and operational ) employed by the Projeci Company at the Site, Karachi and Head Office. 7.2.4 Vehicle Fuel And Maintenance This component includes costs associated with running and maintenance of vehicles at Karachi and Site office of the Project Company. The vehicles would include vehicles required by the security personnel for securing the site ; vehicles required for supervision and coordination of O&hM activities, and vehicles required for administration activities. The vehicles purchased during the construction period shall be used for the first 10 years operation. I1pon commencement of the l0't' year, the old vehicles will be replaced and the Project Company will procure new vehicles thereby enabling it to maintain the same level of fuel and maintenance costs for the remainder of the operations period.
7.2.5 Land Lease Cost Payable AEDB

The lease rentals payable to AEDB for the first 10 years have, in accordance with the requirements laid forth by AEDB aid in advance. These form part of the Total Project Cost mentioned in Section 5.4 above. In case the lease rentals that have been paid in advance (as explained in the preceding sentence) are excluded from the Total Project Cost by NEPRA while determining the tariff, it is prayed that the same be amortized during the first 10 years of operation in order to ensure that the cost is reimbursed to the Project Company. Furthermore, at the commencement of the I1'I' year of operation, the Project will be required to pay (to AEDB) lease rentals for the remaining term of the Project (i.e. 10 years) in advance. The cost set out a;,ainst this head is to cater for the cost of the lease
Of 1
51
rentals that will need to be paid to AEDB by the Project for the remaining term. It is pertinent to mention that even though the Project will be required to pay the cost for the entire 10 year period in advance, the Project Company has accepted that the same will be settled by the Power purchaser on through monthly energy payments over the 10 year period. 7.2.6 Other Administrative Costs This portion of the O&M Cost includes costs associated with rents , utilities, traveling, entertainment , audit , legal and financial consultants , technical consultation , generation license fees, and other allied expenses of running the offices during operations. 7.2.7 Taxes on Imported Spare Parts Spare parts required to be imported due to any scheduled or unscheduled maintenance will be the responsibility of the project Company as agreed under the O&M agreement. As per the Government of Pakistan, Federal Board of Revenue Statutory Regulatory Order (SRO) No. 575(1)/2006 import duty is to be levied on imports by IPPs during the operations period. 7.2.8 Letter of Credit for Debt Service Reserve Account (DSRA) Internationally as well as locally, infrastructure projects such as this Project are typically financed through an arrangement termed as Project Financing. The lenders for such projects determine the visibility of such projects based upon the projected cash flows of the project rather than the balance sheets of the project sponsors. Usually, a project financing structure involves a number of equity investors, as well as a syndicate of banks and financial institutions that provide loans for the project. Such loans are most commonly non-recourse loans, which are secured by the project assets and paid entirely from project cash flow, rather than from the general assets or creditworthiness of the project sponsors - a decision in part supported by financial modeling. The financing is typicall\ secured by all of the project assets , including the revenue-producing contracts. Project lenders are give.-. a lien of, all of these assets and contracts, and are able to assume control of a project if the project company has difficulties complying with the loan terms. Generally, a special purpose entity the project Company) is created for each project, thereby shielding other assets owned by a project sponsor from the detrimental effects of a project failure. As a special purpose entity, the project company has no assets other than the project. Capital contribution commitments by the owners of the project company are sometimes necessary to ensure that the project is financially sound. The mechanism of arrangement of Project Financing, described above, is the theme behind the Policy developed by the GOP for inviting interest of the private sector towards power generation. Arrangement of conventional financing would expose the sponsors to unnecessary risks, as it would provide the lenders an opportunity to obtain recourse towards other assets of the sponsors.
(f
12
52
The debt to be arranged by the Sponsors of the Project Company is to be structured as a project financing transaction, under which the cash flows of the Project during the debt repayment period shall be appropriated based on a waterfall which is usually applied by lenders i.e. the monthly revenues earned by the Project shall be applied in the order of precedence specified below: Payment of interest and principal due for the month shall be secured by the Lenders in a Debt Payment Account; Payment of maintenance reserve in accordance with the EPA shall be secured by the Lenders in a Maintenance Reserve Account; Payments to be made for operating expenditure shall flow through the Project - the same shall be immediately paid to the relevant creditors i.e. O&M contractor, staff salaries, etc; and The payment against ROE and ROE-DC shall be utilized by the Lenders to fund the Debt Service Reserve Account (DSRA). DSRA is maintained by the Lenders in Project Financing transactions as a means to secure the debt service due immediately after the next debt repayment date. The DSRA provides the Lenders with adequate time to take over the Project in case of default by the Project Company.
The two options available for funding the DSRA are provided below:
through cash - there are two further sub-options in case this method of funding is chosen by the Lenders (i) Upfront funding - funding through equity injection by the Sponsors at the time of COD, or (ii) funding through diversion of ROE and ROI;-DC cash flows into a DSRA account. In either scenario, the Sponsors of the Project are unable to avail any return on the amount retained by the Lenders to fulfill the DSRA requirement; or through L/C the Sponsors provide an L/C equivalent to the amount required for funding the L)SRA requirement; L/C charges are borne by the Project Company. The Sponsors and their Financial Consultants are of the view that the Lenders may be willing to accept securing the DSI:A through an L/C . The cost associated with the L/C to be provided to the Lenders for securing the DSRA has been catered for under this account. If the cost of such L/C is not allowed to the Project Compay, the same would result in a reduction of the Sponsors IRR, which defies the basic theme behind the Policy, that was developed in order to attract private investment into the power sector. In this regard , the Tariff Standards and Procedures , 1998 (NEPRA Rules ), clearly state that the: "tariffs should allow Licensees a rate of return which promotes continued reasonable investment... " and
t,6,^
53
"tariffs should generally be calculated by including a depreciation charge and a rate of return on the capital investment of each licensee commensurate to that earned by other investments of comparablerisk "
Furthermore , NEPRA Rules clearly stipulate that the: "tariffs should, to the extent feasible, reflect the full cost of service to consumer groups with similar service requirements" It is therefore, respectfully submitted that the Project Company be allowed to claim the said L/C charges for fulfilling the DSRA funding requirement of the Lenders along with the working capital facility (as detailed in Section 5.6 . It is pertinent to mention that NEPRA has in the pttst allowed projects, for which debt is anticipated to be funded through various IFI's such as US Exim Bank, IFC, ADB, ECA's, and other multilaterals and bilaterals the interest charged on working capital facility and DSRA L/C. The decision of NEPRA in the case of AES Pakistan (Pvt.) Ltd. with regards to the request by AES for arrangement of working capital facility and DSRA L/C is reproduced below:
"... The Authority has, however, in the cases of other IPPs who obtained funds from accredited IFIs and not from commercial banks allowed other Financial charges such as DSRA L/C charges and agency fees, etc. The Authority, in the instant case, keeping in view the size of the project and funding required, understands that the Petitioner will have to obtain funding from IFIs such as US Exim Bank and IFC, etc. In view thereof, the Authority has decided to accept the Petitioner's request, subject to provision of verifiable documentary evidence."
Taking into account the decision taken by NEPRA in the determination awarded to AES, and the similarity between the AES project and the Project with regards to the sources of debt funding it is reasonable for the Project Company to request for the working capital facility and interest cost on DSRA L/C to be allowed to the Project Company against provision of actual documentary evidence. Alternatively, the Project shall be f arced to fund the DSRA through cash (on an 75:25 debt: equity basis), which will result in an increase in total project cost of the Project. This increase in equity will ultimately result in a higher tariff, which will be to the detriment of the consumers.
7.2.9 Lender Related Costs

Under the financing arrangements the Project Company is required to pay the lenders various fees for monitoring and coordinating activities including Agency Fee, Monitoring Fee and Security Trustee Fee which are in line with common market practices. Further, due to the im olvement of foreign lenders, an annual technical review of the Project's operations is mandatory, the cost of which has also been included under this head. All these costs are verifiable from the term sheet signed with the lenders.
(11 f '.
54
7.3 INSURANCE DURING O&M The Insurance Cost consists of the insurances required under the Implementation Agreement and the Energy Purchase Agreement coupled with those customarily required for project financing tran , actions, including all-risk insurance / reinsurance, business interruption insurance , and machinery break - down, natural calamities, sabotage and terrorism . A s these risks are an impediment to the smooth and efficient running of the day - to-day affairs of the Project, it is critical that all risks associated with the Project are adequately addressed and all insurable events are catered for in a foolproof manner . Keeping in view the generally adopted global trends and the magnitude of the Project , a comprehensive operational insurance and reinsurance arrangement is also fundamental to ensure bankability of the Project. During the operations phase, the Project Company intends to acquire insurance from one of the leading insurance companies in the country . As it is standard practice for local insurers to only retain 5 % of the risk and acquire reinsurance for the remaining 95% through foreign re - insurer, it is prayed to NEPRA that the insurance costs for the operations phase be allowed in US Dollars ( as has been done in case of all other power projects ). The requirement to have the operational phase insurance cost denominated in US Dollars is further supported by the fact that the lenders financing the Project will inevitably require the Project to be insured on replacement cost basis; since a major chunk of the Total Project Cost is already denominated in US Dollars, the replacement cost basis insurance would also need to be taken out in US Dollars. It is pertinent to highlight , that any replacement costs incurred as a consequence of the occurrence of an insurable event will also be incurred in US Dollars. The Project Company, in view of the practices set by the other IPP's in Pakistan and in accordance with the requirement , set out by the Lenders, proposes to procure the following insurance during the operational phase of the Project: Property Damage and Comprehensive Machinery Insurance ( including Business Interruption insurance); Third Party Liability; Terrorism insurance; Group Personal Accident Insurance; and Motor Comprehensive Insurance
The insurance cost ( for the operations phase) set out in the petition does not, however, covers the administrative surcharge , Federal Excise Duty and Federal Insurance Fee, that might be applicable on the insurance cost.
(J6`)
55
SAPPHIRE WIND POWER COMPANY 1.IMITEl)
TARIFF PETITION
8. PROPOSED SCHEDULE
REFERENCE GENERATION TARIFF & DEBT
8.1 TARIFF CONTROL PERIOD As the Project is 75 debt funded \t ith loan tenure of 10 years for repayment , this means that there will be higher debt service a st requirements in the first 10 years of the Project. In the last 10 years of the Project, the t : iriff will be decreased due to no debt service related costs. The proposed tariff is for the fife of the Project i.e. length of the EPA, signed with the Power Purchaser, which is 20 Wears from COD. The tariff is divided into three (03) bands i.e. year 1 - 2, year 3 - 10, and year 11 - 20 to cover the variations due to debt repayment period, warranty period ()&M, and po,,t-warranty period O&M.
8.2 SUMMARY OF REFERENCE GENERATION TARIFF
A summarized Reference Generation Tariff table setting out the three bands is provided below (Rs. / kV('h):
YEARS
FIXED O&M FOREIGN LOCAL
1-2 0 .3699
11.4407
3-10 , . 1.3964
0.4833
':. 11-20 1.3970

0.4166
ROE (INCLUDING WHT ON ROE) DEBT SERVICING

INSURANCE . .
4.0110 8.3031
0.6626
3.9809 8.2408
0.6577
3.9809 0.6577
TOTAL
13.7873
14.7591
6.4522
TARIFF PETITION
8.3 REFERENCE GENERATION TARIFF TABLE
0.3726 0.3671 1.3964 1.3964

1.3964
0.4440 0.4374 0.4833 0.4833

0.4833
0.6676 0.6577 0.6577 0.6577

0.6577
3.7380 3.6823 3.6823 3.6823

3.6823
0.3031 0.2986 0.2986 0.2986 02986 0.2986 0.2986 0.2986 0.2986 0.2986 0.2986 0.2986 0.2986
02986
0.3223 0.3718 0435' 0,5094

0.5963
1.1731 1.1014 10380 09638

0.8770
1.4784 1.5298 1.6070 1.6880

1.7731
0.9097 0.8227 0.7456 0.6645

0.5794
2.6459 2.7512 2.9041 30654 3.2357 34154 36051 3.8054 4.0168 4.2399 2 .3322
1.8359 1.6638 1.5109 1.3496

1.1793
13.8908 13.6838 14.7590 14.7590

14.7590
16.11.46
158744
17.1218 17.1218
17.1218
1.3964 1.3964 1.3964 1.3964 1.3964 1.3970 1.3970 1.3970 1.3970 1.3970 1.3970 1.3970 1.3970 1.3970 1.3970 1.1873
0.4833 0.4833 0.4833 0.4833 0.4833 0.4166 0.4166 0.4166 0.4166 0.4166 0.4166 0.4166 0.4166 0.4166 0.4166 0.4561
0.6577 0.6577 0.6577 0.6577 0.6577 0.6577 0.6577 . 0.6577 0.6577 0.6577 0.6577 0.6577 0.6577 0.6577 0.6577 0 . 6587
3.6823 3.6823 3.6823' 3.6823 3.6823 3.6823 3.6823 3.6823 3.6823 3.6823 3.6823 3.6823 3.6823 3.6823 3.6823 3.6882
0.6980 08170 0.9363 1.1193 1.3102
07753 0.6563 0.5170 0.3539 0.1631
1.8625 1.9564 2.0550 2.1586 2.2675 -
0.4900 0.3961 0.2975 0.1939 0.0850 0.4245
0.9996 0.8098 0.6096 0.3982 0.1750 0.8614
14.7590 14.7590 14.7590 14.7590 14.7590 6.4521 6.4521 6.4521 6.4521 6.4521 6.4521 6.4521 6.4521 6.4521 6.4521 12 . 2504
17.1218 11.1218 17.1218

171218
1-71218 7.4850 7.4850 7.4850 7.4850 -.4850 7.4850 7.4850 7 4851) 7.4850 7.4850 14.2116
02986 0.2986 0.2986 0.2986 0.2986 0.2986 0 . 2990 0.4563 -
0.6094
1 .2772
57
TARIFF PETITION
8.4 DEBT SCHEDULE
8.4.1 FOREIGN DEBT REPAYMENT SCHEDULE - Eco BANK
Repayment Period
Principal Repayment (PKR)

101,340,809
Interest on Outstanding
Debt (PKR)
64,394,190 61,870,804 59,284,585
Total Installment
(PKR)
165,734,998 165,734,998 165,734,998 165,734,998 165,734,998 165,734,998 165,734,998 165,734,998 165,734,998 165,734,998 165,734,998 165,734,998
165,734,998
1 2 3 4 5
103,864,195
106,450,413 109,101,029 111,817,644 114,601,904 117,455,491 120,380,133
56,633,970 53,917,354
51,133,095 48,279,507 45,354,866 42,357,400 39,285,298 36,136,701 32,909,703 29,602,353 26,212,650 22,738,544
6
7 8
9
10 II 12 13 14 15 16 17 18 19 20
123,377,598
126,449,700 129,598,298 132,825,295 136,132,645 139,522,348 142,996,455 146,557,066 50,206,337 153,946,475 157,779,742 161,708,458
165,734,998
165,734,998
19,177,932
15,528,661 11,788,523
165,734.998
165,734.998 165,734,998 165,734,998 165,734,998
7,955,256
4,026,541
59
TARIFF PETITION
8.4.2 FOREIGN DEBT REPAYMENT SCHEDULE - ICBC
Repayment Period
Principal Repayment
(PKR)
181,142,005
Interest on Outstanding Debt (PKR) 129,893,809 124,930,518

119,831,233
Total Installment (PKR)

311,035,814 311,035,814
311,035,814
2
3 4
186,105,296
191,204,581 196,443,587 201,826,141 20 7,356,177 213,037,736 218,874,970 224,872,145
5
6
114,592,227 109,209,673
103,679,637 97,998,078 92,160,844
311,035,814 311,035,814
31 1,035,814
7
8 9
311,035,814
31 1,035,814
I0
11 12 13 14 15 16 17 18 19 20
231,033,641 237,363,963 243,867,736

250,549,712 257,414,774 264,467,939 271,714,360
86,163,669 80,002,173 73,671,851 67,168,078

60,486,102
311,035,814 311,035,814 311,035,814 311,035,814

311,035,814
53,621,040
46,567,875 39,321,454
3111,035,814 311,035,814
31 1,035,814 31 1,035,814 31 1,035,814 31 1,035,814 31 1,035,814
279,159,334
286,808,299 294,666,847 302,740,718
31,876,480
24,227,515 16,368,967 8,295,096
59
SAPPHIRE WIND POWER COMPANY LIMITEI)
TARIFF PETITION
8.4.3 LOCAL DEBT REPAYMENT SCHEDULE
Repayment Period
Principal Repayment
(PKR)
21,498,900 23,259,660 25,164,626 27,225,609 29,455,386 31,867,782
Interest on Outstanding Debt (PKR)

82,291,851
Total Installment (PKR)

103,790,751
1 2 3 4 5 6
80,531,091 78,626,125
76,565,142 74,335,365
103,790,751 103,790,751 103,790,751

103,790,751
7
8 9 10 11 12 13 14 15 16
34,477,754
37,301,482 40,356,473 43,661,668 47,237,559 51,106,315 55,291,922 59,820,331 64,719,616 70,020,152
71,922,969 69,312,997 66,489,269

63,434,278 60,129,083 56,553,192 52,684,436 48,498,829 43,970,421 39,071,135 33,770,599
103,790,751 103,790,751 103,790,751

103,790,751 103,790,751 103,790,751 103,790,751
103,790,751 103,790,751
103,790,751
17 18
19 20
75,754,803 81,959,121
88,671,573 95,933,775
28,035,948 21,831,630
15,119,178 7,856,976
103,790,751 103,790,751 103,790,751

103,790,751 103,790,751
60
TARIFF PETITION
9. INDEXATIONS, ESCALATIONS AND COST ADJUSTMENT

9.1 INDEXATIONS
NEPRA is requested to allow indexation for the various Reference Generation Tariff components in the following manner. 9.1.1 Fixed O&M (Local) Cost Component The Reference Local Fixed O&hi Cost Component shall be quarterly indexed to the WPI of manufacturing in Pakistan , as notified by the Federal Bureau of Statistics based on the following formula: LFO&Myt. ReV1 = Relevant Reference Generation Tariff Component (WPItRCV / \VPI(RCn) Where: LFO&M(, it,.,.) = the revised Local Fixed O&M Cost Component applicable for the relevant quarter \`(rP I (R-) the revised \\"PI of manufacturing in Pakistan for the month prior io the month in which indexation is applicable, as notified by the Federal Bureau of Statistics.
the \XTPI of manufacturing in Pakistan for the month
in which t.iriff is determined , as notified by the Federal Bureau of Statistics.
9.1.2 Fixed O& M (Foreign ) Cost Component The Reference Fixed O&M (Foreign) Cost Component shall be quarterly indexed to both: (a) the USD/PKR exchange race, based on the revised TT & OD selling rate of USD notified by the National Bank of Pakistan; and (b) the US CPI (for all Urban consumers), issued by the US Bureau of Labor Statistics.
The applicable formula shall be as follows: FO&M,RCy, = Relevant Reference Generation Tariff Component *
(US CPI,lt",/ US CPI,

Where:
FX USD, R^0/86.2)
61
SAPPHIRE. WIND POWER COMPANY LIMITED
TARIFF PETITION
the revised Fixed O&h1 (Foreign) Cost Component, applicable for the relevant quarter
US CPI(H,.,.)
the revised US CPI ( for all Urban - consumers) for the month prior to the month in which indexation is applicable , issued by US Bureau of Labor Statistics.
US CPI(,t,.o
the I'S CPI (for all Urban- consumers ) for the month in which tariff is determined , as issued by US Bureau of Labor Statistics.
FX USD(R ,.,.) = the revised TT & OD selling rate of PKR/USD as on the date on which indexation is applicable, as notified by the National Bank of Pakistan. 9.1.3 Insuran c e Cost The Reference Insurance Cost Component shall be quarterly indexed to USD/PKR exchange rate, based on the revised IT & OD selling rate of USD notified by the National Bank of Pakistan. Furthermore, the Reference Insurance Cost Component has been calculated on the basis of insurance premium of US$ 1.075 million (1% of the EPC Price) per annum, which is subject to a maximum call of 1.35"4, of the EPC Price per annum on the production of actual insurance premium. This adjustment of Insurance Cost Component of the Reference Generation Tariff for increased insurance premium shall only be applicable if the actual insurance premium for any year is more than US$ 1.075 million (1.00% of the I:PC Price) :end shall be applied for by the Project Company along with the quarterly indexations and shall be applicable for the next year. (a) Indexation Formula The indexation of the Insurance Cost Component shall be based on the following formula: Insurance = Relevant Reference Generation Tariff Com p onent (FX USI) / 86.2
\<'here: Insurance(5) = the revised Insurance Cost Component applicable for the relevant quarter FX USD(,t,.,) = the revised TI' & OD selling rate of PKR/USD as on the date on which indexation is applicable , as notified by the National flank of Pakistan.
i^
i,
62
SAPPHIRE WIND T'OWER COMPANY LIMITEI)
TARIFF PETITION
(b) jdiustrnent Formula
The adjustment of the Insurance Cost Component for increase in insurance premium shall be based on the following formula:
Insurance = Relevant Reference Generation Tariff Component
Where: Insurance ( ,,, = the revised Insurance Cost Component applicable for the relevant year Actual Insurance Premium or 1.35% of the I :PC Price whichever is lower Reference Insurance Premium of US$ 1.075 million (1.00% of the EPC Price) 9.1.4 Return On Equity In line with NEPRA's previous determinations for thermal IPPs and the Wind IPPs, the ROE Component of the Reference Generation Tariff shall be quarterly indexed to the USD/PKR exchange rate, based on the revised TT & OD selling rate of USD notified by the National Bank of Pakistan. The applicable formula shall be as fellows: ROE,RC, = Relevant Reference Generation Tariff Component'll (FX USD, ^ /86.2 \X'here:
ROE(R,.,,) = the revised ROE' component applicable for the relevant quarter
FX USD(, ,,.V)
the revised TT & OD selling rate of PKR/USD as on the d.)te on which indexation is applicable, as notified by the National Bank of Pakistan.
9.1.5 Withholding Tax on Dividend

The Reference W ithholding Tax Component shall be quarterly indexed to USD/PKR exchange rate, based on the revised 71-1' & OD selling rate of USD notified by the National Bank of Pakistan.
63
TARIFF PETITION
The applicable formula shall be as follows: HT = Relevant Reference Generation Tariff Com p onent * ( FX USD
Where: \Vl IT(H,.V) = the revised Withholding Tax Component applicable for the relevant quarter FX USD(H,.,. )= the revised IT & OD selling rate of PKR / USD as on the date on which indexation is applicable , as notified by the National Bank of Pakistan. 9.1.6 Principal Component ( Foreign) The Reference Principal Component (Foreign) shall be semi-annually indexed to USD/PKR exchange rate, based on the revised TT & OD selling rate of USD notified by the National Bank of Pakistan. The applicable formula shall be as f, ,)lows: PRIN , R,,,, = Relevant Reference Generation Tariff Component * (FX USD^ 6.2 Where: PRINt,(,.,.) = the revised Principal Component (Foreign) applicable for the relevant semi-annual period FX USD(1( )= the revised IT & OD selling rate of PKR/USD as on the date on which indexation is applicable, as notified by the National Bank of Pakistan. 9.1.7 Interest Charges ( Foreign) The Interest Charges (Foreign) part of the Reference Debt Service Component shall be semi-annually adjusted for variations in interest rate as a result of variation in 6 months LIBOR & foreign exchange fluctuations in the PKR / USD exchange rate. The rationale for such semi-annual indexation is submitted in Section 67 (Debt Seniciug) of the Tariff Petition The Interest Charges (Foreign) of the Debt Service Component shall be indexed based on the following formula: I(Rev, = Relevant Generation Tariff Com onent * LIBOR + Mar in% /
LIBOR tH^ I + Margin %)* (FX USD,R ,,, /86.2)
0'7
64
SAPPHIRE WIND POWER COMPANY LIMITED TARIFF PETITIOUJ
Where: the revised Interest Charge component applicable for the relevant semi-annual period Libor(,t.,.) the revised 6 month LIBOR rate at the end of each 6 months period. Libor(Rr ) 6 month LIBOR rate prevailing on the date of tariff determination (0 .48%) Margin% _ 4.50%u for debt funding provided by Eco or 5.00"., for debt funding provided by ICBC FX USD(R,.V) the revised 1'C & OD selling rate of PKR/ USD as on the date on which indexation is applicable , as notified by the National Bank of Pakistan. 9.1.8 Interest Charges (Local) . The Interest Charges (Local) part of" the Reference Debt Service Component shall be semi-annually adjusted for variations in interest rate as a result of variation in 6 months KIBOR. The rationale for such semi -annual indexation is submitted in Section Error! Reference source not found . (Debt Senicin,0 of the Tariff Petition. The Interest Charges (Local) of the Debt Service Component shall be indexed based on the following formula: 1I,1,, = Relevant Generation Tariff Component * (KIBOR,R,, + 3. 00%) /1 (KIBOR uten+ 3.00%) Where: lot,,) the revised Interest Charge component applicable for the relevant semi annual period the revised 6 month KIBOR rate at the end of each 6 months period. Kibor R,.0
6 month KIBOR rate prevailing on the date of tariff determination (I3.38%)
Kibor,R,,,.)
9.2 ADIUSTMENTS AT COD
NEPRA is requested to allow the adjustments to the Reference Generation Tariff at the time of true up at COD., . 65 t, 1 . )
SAPPHIRE WIND POWER COMPANY LIMITED TARIFF PETITIOPI
9.2.1 Adjustments To Project Cost It is submitted that the Project Cost be adjusted at COD for the following based on the assumptions detailed in Section a5 (Project Cost e&Tarij) and the adjustment to the Project Cost to be reflected in the relevant tariff components (Return on Equity and Debt Servicing): (a) The Principal repayment and cost of debt be adjusted at COD as per the actual borrowing composition; (b) Interest during Constructium be adjusted as per actual based on actual disbursement of loans and prevailing KIBOR / LIBOR rates during the project construction period; (c) The specific items of Project Cost to be incurred in foreign currency (US$) be adjusted at COD based on the PKR / US$ exchange rate prevailing on the date the transaction was carried out; (d) Customs duty and other taxes be adjusted as per actual; (e) Impact of Sindh Sales T.ix on Services Act 2011, Sindh Infrastructure Development Surcharge, and Federal Excise Duty be allowed as a passthrough;
(0
Return on Equity be adjusted at COD in accordance with the GOP Policy for Development of Renewable Energy for Power Generation 2006 in order to ensure an IRR based return of 18% on equity (while treating the project as a Build-Own-Operate type pri )ject).
9.2.2 Adjustment To Working Capital Facile for the Project A Working Capital facility of PKR 85.5 million has been estimated for the Project, which does not include the impact of PKR / USD, PKR / Euro and variations in KIBOR / LIBOR. The actual amount of working capital required by the Project can only be assessed once COD has been achieved. For this reason, it is humbly prayed that NEPRA allow the Project Company to claim One-Time Adjustment to the extent of working capital required by the Project at the time of achievement of COD.
7^'
66
10. CONSIDERATIONS WITH RESPECT To EPA

10.1 BENCHMARK ENERGY AND COMPLEX MONTHLY POWER CURVE TABLES The Benchmark Energy Table and Complex Monthly Power Curve are used by the Power Purchaser as a means of estimating the performance of the Project. These provide a benchmark for the energy to be produced by the Project at a given wind speed. The payments to the Project Company for the energy produced as well as the coverage provided to the Project against wind speed variability risk shall be based on these tables and the same shall be attached as Schedule 1 Annex 2 of the EPA. The said tables also form the basis of payment to the Project Company against NonProject Missed Volume (as defined under the EPA). NEPRA is therefore requested to approve the Benchmark Energy Table and Complex Monthly Power Curve provided below in order for the same to be appended as Schedule 1 Annex 2 of the EPA.
BENCHMARK ENERGY PRODUCTION TABLE
Months
Benchmark Wind Speed m /s 5.3 5.6 5.9
Benchmark Energy GWh ( Year 1) 5.72 5.92 6.83
Benchmark Energy GWh ( Year 2-20) 5.8 6.02 6.94
January February March
April
May June July August
7.7
9.8 10.2 10.3 9.6
13.36
20.3 21.92 19.94 18.88
13.56
20.61 22.25
20 25
19.17
September
October November December Mean of Months I
8.0
5.2 4.5 4.9
14.15
4.32 3.18 4.28
14.37
4.37 3.23 4.34
7.3
Annual Energy (GWh p. a) t
138.8 -
140.9 I
67
TARIFF PETITION
As per international wind industry norms, during the first year of operations a wind power project is susceptible to various site-specific issues resulting in a lower level of availability of the \X'TG's. Therefore during this specific period the availability warranted by the WTG supplier is lower compared to the availability warranted from the second year onwards.
'i
-tS
68
TARIFF PETITION
COMPLEX MONTHLY POWER CURVE TABLE
Complex Monthly Power Curve Energy (Yearl)

Wind Speed 3 3.1 3.2 3.3 3.4 3.5 3.6 3.7
3.6
Jan
Feb
Mar
Apr May
Jun
Jul GWh
Aug
Sep
Oct
Nov
Dec
0.51 0.62 0.75 0.89 1.04 1.19 1.36 1.53

1.73
0.44 0.53 0.64 0.76 0.90 1.04 1.19 1.35

1.31
0.25 0.33 0.43 0.53 0.65 0.78 0.93 1.08

1.24
0.21 0.29 0.39 0.49 0.60 0.73 0.86 1.01

1.17
0.19 0.27 0.37 0.47 0.58 0.71 0.85 1.00

1.16
0.06 0.12 0.20 0.28 0.38 0.49 0.60 0.73

0.66
0.50 0.60 0.72 0.85 0.99 1.14 1.31 1.48

1.66
0.43 0.53 0.64 0.77 0.91 1.06 1.22 1.38 155 1.75 1.95 2.16 2.38 2.61 2.85 3.09 3.36 3.61 3.90 4.18
0.19 0.27 0.36 0.46 0.55 0.67 0.80 0.94

Lug
0.20 0.29 0.38 0.49 0.59 0.72 0.86 1.00

1.16
0.50 0.62 0.74 0.86 1.00 1.15 1.31

1.48 1.63
0.43 0.53 0.65 0.78 0.92 1.07 1.24 1.41

1.56
3.9 4 4.1 4.2 4.3 4.4 45 4.6 4.7 4.8 4.9
1.93 2.14 2.37 . 2.59 2.84 3.08 3.35 3.61 3.89 4.18 4.46
1.68 1.87 2.07 2.27 2.48 2.70 2.93 3.17 3.42 3.66 3.92
1.41 1.58 1.78 1.98 2.19 2.41 2.64 2.88 3.13 3.39 3.65
1.33 1.50. 1.69 1.88 2.09 2.30 2.52 2.74 2.99 3.23 3.47
1.33 1.50 1.69 1.89 2.11 2.33 2.55 2.79 3.04 3.30 3.55
1.03 1.19 1.36 1.53 1.72 1.92 2.13 2.35 2.56 2.79 3.03
1.85 2.06 2.27 2.49 2.72 2.96 3.21 3.47 3.72 3.99 4.28
1.25 1.41 1.58

1."
1.33 1.50 1.68 1.88 2.09 2.30 2.52 2.75 3.00 3.24 3.48
1.84 2.04 2.25 2.48 2.69 2.93 3.18 3.45 3.70 3.98 4.27
1.78 1.98 2.20 2.42 2.65 2.90 3.15 3.43 3.69 3.97 4.28
1.97 2.17 2.39 2.60 2.83 3.07 3.32
69
TARIFF PETITION
Wind Speed 5 5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 5.9 6 6.1 6.2 6.3
6.4
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
GWh
4.77 5.08 5.40 5.72 6.05 6.38 6.71 7.06 7.40 7.73 8.09 8.43 8.77 9.12 9.47 9.81 10.16 10.49 10.84 11.18 11.51 11.84
12.18
4.20 4 .46 4.75 5.04 5.33 5.62 5.92 6.24 6.53 6.84 7.16 7.47 7.78 8.10 8.42 8.74 9.06 9.38 9.69 10.00 10.33 10.63
10.94
3.92 4.22 4.50 4.82 5.13 5.45 5.78 6.13 6.47 6.83 7.19 7.56 7.94 8.32 8.69 9.07 9.46 9.85 10.24 10.62 11.01 11.39
11.79
3.75 4.02 4.32 4.60 4.90 5.22 5.53 5.86 6.21 6.55 6.90 7.26 7.63 8.00 8.37 8.75 9.13 9.51 9.91 10.30 10.68 11.07
11.45
3.83 4.11 4.40 4.70 5.00 5.32 5.64 5.97 6.31 6.66 7.01 7.37 7.72 8 .10 8.47 8.84 9.23 9.60 9.99 10.39 10.77 11.17
11.55
3.28 3.53 3.80 4.07 4.37 4.65 4.95 5.27 5.59 5.92 6.26 6. 61 6.97 7.34 7.71 8.10 8.49 8.89 9.30 9.71 10.13 10.54
10.97
4.55 4.85 5.15 5.45 5.77 6.08 6.40 6.71 7.05 7.37 7.69 8.04 8.37 8.70 9.03 9.38 9.70 10.04 10.38 10.70 11.03 11.36
11.69
4.46 4.78 5.08 5.40 5.72 6.05 6.38 6.71 7.06 7.41 7.74 8 .10 8.45 8.80 9.15 9.49 9.85 10.20 10.54 10.89 11.24 11.58
11.92
3.57 3.84 4.12 4.40 4.70 5.00 5.32 5.63 5.96 6.30 6.65 7.00 7.36 7.71 8.09 8.46 8.84 9.22 9.59 9.98 10.38 10.75
11.14
3.76 4.03 4.32 4.59 4.89 5.20 5.51 5.82 6.16 6.48 6.82 7.17 7.52 7.88 8.24 8.59 8 .97 9.34 9.70 10.07 10.44 10.82
11.20
4.55 4.85 5.17 5.47 5.79 6.12 6.44 6.76 7.10 7.43 7.75 8.10 8.42
8 .74
4.57 4.89 5.22 5.55 5.89 6.25 6.59 6.95 7.32 7.68 8.06 8.42 8.79 9.17 9.53 9.91 10.28 10.64 11.00 11.36 11.72 12.07
12-41
9.07 9.40 9.71 10.03 10.36 10.66 10.97 11.28

11.57
6.5 6.6 6.7 6.8 6.9 7 7.1

7.2
7.3
12.49
11.25
12.18
11.84
11.94
11.39
12.01
12.26
11.52
11.56
11.87
12.76
70
TARIFF PETITION
Wind S pee d 7.4 7.5 7.6 7.7 7.8 7.9 8 8.1 8.2 8.3 8.4 8.5 8.6 8.7 8.8 8.9 9 9.1 9.2 9.3 9.4 9.5 9.6 9.7
Jan
Feb
Mar
Apr
May
Jun
11.82 12.27 12.69 13.12 13.54 13.97 14.38 14.80 15.22 15.62 16-02 16.42 16.81 17.19 17.55 17.92
1829
Jul
Aug
Sep
Oct
Nov
Dec
GWh
12.82 13.15 13.45 13.76 14.08 14.37 14.67 14.97 15.26 15.54 15.83 16.10 16.37 16.64 16.91 17.16 17.40 17.66 17.90 18.15 18.37 18.61 18.83 19.06 11.55 11.85 12.15 12.43 12.73 13.02 13.30 13.58 13.85 14.13 14.38 14.64 14.90 15.15 15.39 15.63 15.88 16.11 16.34 16.55 16.78 16.99 17.20 17.39 12.55 12 .93 13.30 13.67 14.04 14.40 14.75 15.11 15.45 15.79 16.13 16.45 16.78 17.10 17.40 17.71 18.01 18.31 18.59 18.87 19. 15 19.40 19.67 19.93 12.23 12.61 12.98 13.36 13.72 14.10 14.45 14.80 15.15 15.49 15.83 16.16 16.47 16.79 17.10 17.39 17.70 17.98 18.27 18.54 18.80 19.07 19.31 19.57 12.33 12.72 13.11 13.48 13.86 14.24 14.60 14.98 15.35 15.69 16.05 16.39 16.73 17.07 17.39 17.72 18-03 18.33 18.64 18.93 19.23 19.50 19.77 20.05 12.33 12.65 12.97 13.28 13.59 13.89 14.19 14.49 14.78 15.07 15.36 15.64 15.92 16.20 16.45 16.73 16.98 17.25 17.49 17.74 17.98 18.22 18.44 18.68 12.59 12.92 13.24 13.57 13.88 14.20 14.51 14.82 15.12 15.42 15.71 16.00 16.29 16.56 16.84 17.11 17.37 17.64 17.89 18.15 18.39 18.64 18.88 19:12 11.91 12.29 12.67 13.05 13.41 13.79 14.15 14.52 14.87 .15.23 15.56 15.91 16.25 16.57 16.90 17.22 17.52 17.83 18.13 18.41 18.71 18.99 19 .26 19.53 11.93 12.30 12.67 13.04 13.39 13.75 14.11 14.45 14.80 15.14 15.48 15.81 16.13 16.44 16.77 17.08 17.37 17.67 17.97 1826 18.53 18.80 19.07 19.32 12.17 12.45 12.74 13.03 13.31 13.58 13.85 14.13 14.39 14.65 14.92 15.17 15.42 15.67 15.93 16.17 16.41 16.64 16.89 17.12 17.34 17.56 17.79 18.01 13.11 13.43 13.76 14.10 14.41 14.73 15.05 15.35 15.64 15.95 16.24 16.51 16.80 17.08 17.35 17.61 17.87 18.14 18.38 18.63 18.87 19.12 19.34 19.58
18.63 18.97 19.30 19.63 19.94 20.25 20.55
71
TARIFF PETITION
Wind
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
19.79 20. 05 20.30 20.54 20.78 21.02 21.24 21.46 21.68 21.89 22.10 22.29 22.48 22.68 22.87 23.05 23.23 23.39 23.56 23.72 23.87 24.03 24.18 24.32
Oct
Nov
Dec
Speed
9.8 9.9 10 10.1 10.2 10.3 10.4 10.5 10.6 10.7 10.8 10.9 11 11.1 11.2 11.3 11.4 11.5 11.6 11.7 11.8 11.9 12 12.1 19 .27 19.48 19.69 19.89 20. 09 20.27 20.46 20.63 20.81 20.99 21.15 21.30 21.46 21.61 21:76 21.90 22.03 22.16 22.28 22.40 22.51 22.62 22.72 22.82 17.60 17.80 17.98 18 .17 18 .34 18.52 18.70 18.86 19.02 19.18 19.32 19.47 19.61 19.74 19.88 20.01 20.14 20.25 20.35 20.47 20.57 20.67 20.76 20.86 20.18 20.42 20.65 20.89 21.12 21.33 21.55 21.76 21.98 22.17 22.36 22.55 22.74 22.93 23.10 23.27 23.43 23.59 23.75 23.90 24.05 24.20 24.33 24.46 19.81 20.05 20.28 20.50 20.71 20.93 21.13 21.33 21.53 21.72 21.91 22.08 22.26 22.43 22.59 22.75 22.91 23.06 23.21 23.35 23.48 23.62 23.75 23.87 20.30 20.56 20.81 21.06 21.29 21.51 21.73 21.96 22.16 22.36 22.56 22.76 22.94 23.13 23.30 23.46 23.63 23.80 23.94 24.10 24.25 24.37 24.51 24.64
GWh
20.84 21.12 21.39 21.65 21.92 22.17 22.41 22.64 22.88 23.10' 23.31 23.51 23.72 23.91 24.10 24.28 24.46 24.63 24.80 24.96 25.12 25.25 25.41 25.55 18.90 19.12 19.32 19.54 19.74 19.94 20.14 20.32 20.51 20.68 20.86 21.03 21.19 21.35 21.51 21.65 21.80 21.94 22.07 22.20 22.32 22.44 22.55 22.66 19.33 19.57 19.78 20.00 20.21 20.41 20.62 20.81 21.00 21.18 21.36 21.54 21.70 21.87 22.02 22.18 22.32 22.47 22.60 22.74 22.87 22.98 23.10 23.21 19.59 19.83 20.09 20.31 20.55 20.77 21.00 21.21 21.41 21.61 21.83 22.01 22.20 22.38 22.55 22.72 22.90 23.05 23.21 23.36 23.50 23.64 23.78 23.91 18.23 18 .43 18.65 18.85 19.06 19.26 19.45 19.65 19.83 20.02 20.19 20.36 20.54 20.70 20.86 21.02 21.17 21.31 21.45 21.58 21.71 21.84 21.96 22.06 19.80 20.03 20.24 20.45 20.65 20.86 21.07 21.26 21.44 21.62 21.81 21.99 22.16
22.32
22.48 22.64 22.80 22.94 23.09 23.23 23.36 23.48 23.61 23.73
72
TARIFF PETITION
Wind S pee d 12.2 12.3 12.4 12.5 12.6 12.7 12.8 12.9 13 13.1 13.2 13.3 13.4 13.5 13.6 13.7 13.8 13.9 14 14.1 14.2 14.3 14.4 14.5
Jan
Feb
Mar
Apr
May
Jun
Jul GWh
Aug
Sep
Oct
Nov
Dec
22.91 22.99 23.08 23.15 23.23 23.29 23.35 23.40 23.45 23.50 23.54 23.58 23.61 23.64 23.67 23.69 23.70 23.72 23.73 23.73 23.73 23.73 23.72 23.71
20.94 21.03 21.10 21.17 21.24 21.30 21.36 21.42 21.48 21.53 21.56 21.60 21.64 21.68 21.71 21.73 21.76 21.78 21.79 21.80 21.81 21.82 21.82 21.82
24.59 24.72 24.83 24.95 25.06 25.17 25.25 25.35 25.44 25.52 25.61 25.68 25.74 25.81 25.87 25.92 25.97 26.02 26.06 26.09 26.12 26.14 26.16 26.17
24.00 24.12
24.24
24.76 24.88 24.99 25.11 25.22 25.30 25.40 25.49 25.58 25.67 25.74 25.81 25.88 25.95 26.01 26.07 26.13 26.18 26.21 26.24 26.28 26.31 26.34 26.37
25.69 25.82 25.95 26.08 26.19 26.30 26.42 26.53 26.64 26.73 26.83 26.93 27.02 27.11 27.19 27.26 27.34 27.41 27.49 27.55 27.61 27.67 27.73 27.78
22.77 22.87 22.96 23.05 23.14 23.23 23.29 23.37 23.43 23.49 23.53 23.61 23.66 23.70 23.74 23.78 23.82 23.84 23.87 23.88 23.90 23.91 23.92 23.93
23.31 23.40 23.50 23.59 23.67 23.75 23.83 23.89 23.95 24.01 24.06 24.11 24.15 24.19 24.22 24.25 24.26 24.28 24.30 24.31 24.31 24.31 24.31 24.30
24.46 24.60 24.73 24.85 24.97 25.10 25.21 25.30 25.41 25.51 25.61 25.70 25.78 25.87 25.95 26.02 26.09 26.15 26.20 26.25 26.30 26.34 26.38 26.41
24.04 24.17 24.28 24.38 24.49 24.60 24.70 24:80 24.88 24.97 25.05 25.13 25.20 25.25 25.32 25.38 25.43 25.48 25.53 25.57 25.60 25.63 25.66 25.68
22.17 22.27 22.36 22.45 22.52 22.59 22.66 22.73 22.79 2184 22.89 22.93 22.95 22.98 23.01 23.03 23.04 23.05 23.06 23.06 23.05 23.04 23.03 23.02
23.84 23.94 24.04

24.14
24.33 24.44 24.54 24.64 24.74 24.82 24.91 24.99 25.07 25.15 25.22 25.26 25.32 25.38 25.43 25.48 25.52 25.56 25.59 25.62 25.64
24.23 24.30 24.37 24.44 2450 24.56 24.61 24.65 24.69 24.72 24.74 24.76 24.77 24.78 24.78 24.77 24.76 24.74 24.72 24.70
73
TARIFF PETITION
Wind
Jan
Feb
Mar
Apr
May
Jun
Jul GWh
Aug
Sep
Oct
Nov
Dec
Speed
14.6 14.7 14.8 14.9 15 23.69 23. 68 23.66 23.63 23.60 21.81 21 . 80 21.79 21.77 21.75 26.17 26 .17 26.17 26.16 26.15 25.66 25.67 25.68 25.68 25.68 26.39 26.40 26.41 26.42 26.42
27.83 27.87 27.91 27.95 27.98
23.93 23.93 23.92 23.91 23.90
24.29 24.28 24.26 24.25 24.22
26.44 26.46 26.48 26.49 26.50
25.70 25.72 25.72 25.72 25.72
23.00 22.98 22.95 22.93 22.90
24.66 24.63 24.58 24.54 24.49
74
TARIFF PETITION
Complex Monthly Power Curve Energy (Year 2-10)
Wind Speed 3 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8
3.'9
Jan ( GWh) 0.52 0.64 0.77 0.90 1.05 1.22 1.38 1.56 1.76 1.96 2.18 2.41 2.64 2.89 3.13 3.40 3.67 3.95 4.24 4.54 4.84
Feb (GWh ) 0.45 0.55 0.66 0.79 0.91 1.05 1.21 1.36 1.53 1.72 1.90 2.10 2.31 2.51 2.74 2.97 3 2' 3.4-17 3.72 3.99 4.26
Mar ( GWh) 0.25 0.34 0.44 0.55 0.67 0.81 0.94 1.10 1.26 1.43 1.61 1.81 2.01 2.23 2.44 2.68 2.93 3.17 3.44 3.71 3.99
Apr (GWh ) 0.21 0.29 0.39 0.50 0.62 0.75 0.88 1.03 1.19 1.35 1.53 1.72 1.91 2.12 2.34 2.55 2.79 3.02 3.28 3.53 3.81
May ( GWh) 0.19 0.27 0.37 0.48 0.60 0.73 0.86 1.01 1.18 1.35 1.53 1.73 1.92 2.14 2.37 2.60 2.84 3.08 3.35 3.61 3.89
Jun (GWh) 0.06 0.13 0.20 0.28 0.38 0.50 0.62 0.75 0.89 1.u5 1.21 1.38 1.56 1.-6 1.95 2.16 2.39 2.60 2.84 3.07 3.33
Jul ( GWh) 0.50 0.62 0.74 0.86 1.01 1.17 1:33 1.50 1.69 1.89 2.09 2.31 2.53 2.7 3.00 3.26 3.51 3.78 4.06 4.34 4.63
Aug (GWh ) 0.43 0.54 0.66 0 .79 0.92 1.08 1.24 1.40 1.59 1.70 1.98 2.19 2.42 2.65 2.90 3.14 3.41 3.67 3.95 4.25 4.54
Sep ( GWh) 0.20 0.27 0.36 0.46 0.57 0.69 0.81 0.96 1.11 1.27 1.43 1.61 1.80 2.00 2.21 2.43 2.64 2.88 3.11 3.38 3.63
Oct (GWh ) 0.21 0.29 0.38 0. 49 0.61 0.74 0.87 1.02 1.18 1.35 1.52 1.72 1.91 2.12 2.34 2.56 2.80 3.03 3.29 3.54 3.82
Nov ( GWh) 0.52 0.63 0.76 0.88 1.02 1.17 1.34 1.50 1.68 1.88 2.07 2.29 2.51 2.74 2.97 3.23 3.49 3.76 4.04 4.33 4.62
Dec (GWh) 0.44 0.55 0.67 0.81 0.94 1.09 1.26 1.43 1.61 1.81 2.01 2.23 2.46 2.70 2.95 3.20 3.47 3.75 4.04
4.34
4 4.1
4.2
4.3 4.4 4.5 4.6 4.7 4.8 4.9
4.65
1 5
75
TARIFF PETITION
Wind
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug (GWh) 4.84 5.16 5.48 5.80 6.15 6.48 6 .82 7.17 7.52 7.86 8.22 8.57 8.93 9.29 9.64 10.00 10.35 10.71 11.07 11.41. 11.75 12.11 12.44 12.77
Sep (GWh) 3.90 4.18 4.47 4.77 5.08 5.39 5.72 6.06 6.40 6.75 7.11 7.47 7.84 8.21 8.58 8.96 9.,6 9.75 10.13 10.53 10.92 11.31 11.70 12.10
Oct (GWh) 4.09 4.37 4.67 4.97 5.27 5.60 5.92 6.24 6.59 6.93 7.29 7.63 8.00 8.3 7 8.73 9.10 9.47 9.86 10.23 10.60 10.99 11.36 11.73 12.12
Nov (GWh) 4.93 5.24 5.57 5.88 6.21 6.54 6.87 7.21 7.55 7.87 8.21 8.54 8.89 9.21 9.53 9.87 10.19 10.51 10.82 11.13 11.45 11.74 12.06 12.35
Dec (GWh) 4.97 5.29 5.64 5.98 6.33 6.69 7.06 7.43 7.80 8.17 8.55 8.93 9.31 9.68 10.05 10.43 10.80 11.17 11.54 11.90 12.25 12.62 12.96 13.30
Spee d
5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 5.9 6 6.1 6.2 6.3 6.4 6.5 6.6 6.7 6.8 6.9 7 7.1 7.2 7.3 7.4
( GWh)
5.16 5.48 5.80 6.15 6.4k 6.81 7.16 7.51 7.85 8.21 8.55 8.92 9.26 9.61 9.96 10.32 10.66 11.01 11.34 11.69 12.03 12.36 12.69 13.02
(GWh )
4.54 4.82 5.12 5.41 5.71 6.02 6.32 6.64 6.95 727 7.58 7.91 8.23 8.55 8.88 9.20 9.51 9.85 10.16 10.48 10.79 11.10 11.42 11.72
( GWh)
4.28 4.58 4.89 5.21 5.54 5.87 6.22 6.58 6.94 7.30 7.68 8.05 8.44 8.83 9.22 9.60 10.00 10.39 10.79 11.18 11.58 11.97 12-35 12.74
(GWh )
4.08 4.37 4.67 4.98 5.29 5.63 5.96 6.29 6.66 7.01 7.37 7.74 8.11 8.49 8.89 927 9.66 10.05 10.45 10.84 11.24 11.63 12.03 12.41
( GWh)
4.17 4.47 4.77 5.09 5.40 5.73 6.07 6.41 6.76 7.11 7.48 7.84 8.22 8.59 8 .97 9.37 9.76 10.15 10.54 10.94 11.33 11.72 12.13 12.52
(GWh)
3.58 3.86 4.13 4.42 4.72 5.03 5 .34 5.68 6.01 6.35 6.71 7.08 7.45 7.84 8.23 8.62 9.02 9.44 9.87 10.29 10.71 11.14 11.58 12.01
(GWh )
4.92 5.23 5.54 5.85 6.18 6.49 6.81 7.15 7.48 7.82 8..15 8.49 8.84 9.17 9.51 9.86 10.19 10.53 10.86 11.20 11.54 11.86 12.19 12.53
76
TARIFF PETITION
Wind
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Speed 7.5 7.6 7.7 7.8 7.9 8 8.1 8.2 8.3 8.4 8.5 8.6 8.7 8.8 8.9 9 9.1 9.2 9.3 9.4 9.5 9.6 9.7 9.8
( GWh) 13.34 13.66 13.98 14.29 14.59 14.90 15.20 15.48 15.79 16.06 16.34 16.62 16. 89 17.16 17.42 17.68 17.93 18.17 18.42 18.66 18.89 19.12 19.34 19.56
(GWh) 12.04 12.33 12.64 12.92 13.22 13.50 13.79 14.06 14.33 14.60 14.87 15.12 15 .39 15.63 15.88 16.12 16.35 16.58 16.81 17.03 17.24 17.46 17.67 17.87
(GWh) 13.12 13.51 13.88 14.26 14.62 14.97 15.34 15.69 16.03 16.37 16.71 17.03 17.35 17.67 17.98 18.28 18-59 18 .87 19.16 19.43 19.71 19.97 20.23 20.48
(GWh) 12.79 13.18 13.56 13.94 14.31 14.67 15.02 15.39 15.73 16.06 16.40 16.73 17.04. 17.36 17.67 17.97 18.25 18.55 18.82 19.09 19.36 19.61 19.87 20.11
(GWh) 12.91 13.30 13.69 14.07 14.46 14.84 15.21 15.57 15.94 1 6.30 16.64 16.99 17.32 17.66 17.99 18.30 18.62 18.92 19 .22 19.52 19.80 20.08 20.35 20.61
(GWh 12.45 12.88 13.31 13.75 14.18 14.60 15.02 15.44 15.86 16.27 16.67 17.06 17.45 17.82 18.19 18.57 18.91 19.25 19.59 19.93 20.25 20.55 20.86 21.16
(GWh) 12:84 13.16 13.48 13:79 14.10 14.41 14.71 15.00 15.31 15.59 15.88 16.16 16.44 16.71 16.98 17.24 17.51 17.75 18.01 18.25 18.50 18.72 18.96 19.19
(GWh ) 13.11 13.45 13.78 14.09 14.42 14.73 15.04 15.36 15.65 15.95 16.25 16.53 16.81 17.09 17.37 17.64 17.91 18.16 18.43 18.67 18.93 19.17 19.40 19.64
,( GWh) 12.48 12.86 13.25 13.62 14.00 14.37 14.74 15.10 15.45 15.81 16.15 16.49 16.82 17.15 17.48 17.79 18.11 18.40 18.69 19.00 19.27 19.55 19.83 20. 09
(GWh) 12.49 12 .86 13.23 13.60 13.96 14.33 14.68 15.02 15-38 15.71 16.04 16.38 16.70 17.03 17.33 17.64 17.95 18.23 18.53 18.81 19.09 19.36 19.63 19.88
(GWh) 12.64 12.94 13.23 13.51 13.79 14.06 14.34 14.61 14.88 15.14 15.40 15.66 15.91 16.17 16.41 16.66 16.90 17.14 17.37 17.60 17.83 18.07 18. 28 18 .51
(GWh) 13.64 13.98 14.31 14.63 14.94 15.27 15.58 15.88 16.19 16.48 16.77 17.05 17.33 17.61 17.88 18.15 18.41 18.66 18.92 19.16 19.41 19.64 19.88 20.10
77
TARIFF PETITION
Wind Speed 9.9 10 10.1 10.2 10.3 10.4 10.5 10.6 10.7 10.8 10.9 11 11.1 11.2 11.3 11.4 11.5 11.6 11.7 11.8 11.9 12 12.1 12.2
Jan ( GWh) 19.77 19.99 20.19 20.39 20.58 20.77 20.95 21.13 21.31 21.47 21.63 21.80 21.94 22.09 22.23 22.37 22.49 22.62 22.75 22.85 22.97 23.06 23.17 23.25
Feb (GWh) 18.07 18.25 18.45 18.63 18. 80 18.98 19.15 19.31 19.47 19.62 19.76 19.91 20.05 20.18 20.31 20.44 20.55 20.67 20.79 20.88 20.98 21.08 21.17 21.26
Mar (GWh) 20.73 20 .97 21.21 21.43 21 .66 21.88 22.10 22.30 22.50 22.71 22.90 23.09 23.27 23.45 23.62 23.79 23.96 24.11 24.26 24.42 24.57 24.69 24.83 24.97
Apr (GWh ) 20.35 20. 58 20.82 21.03 21.25 21 .45 21.66 21.85 22.05 22.24 22.42 22.59 22.76 22.94 23.10 23.25 23.41 23.56 23.70 23.84 23.98 24.11 24.23 24.36
May ( GWh) 20.87 21 .12 21.37 21.61 21.84 22.06 22.29 22.49 22.71 22.91 23.10 23.29 23.48 23.66 23.82 24.00 24.15 24.31 24.46 24.60 24.74 24.88 25.02 25.14
Jun (GWh) 21.43 21.72 21.98 22.25 22.50 22.75 22.98 23.22 23.45 23.66 23.87 24.08 24.27 24.47 24.64 24.83 25.01 25.17 25.34 25.50 25.65 25.79 25.94 26.08
Jul (GWh) 19.41 19.62 19.83 20.04 20.25 20.44 20.63 20.82 20.99 21.18 21.36 21.51 21.68 21.83 21.98 22.13 22.28 22.41 22.53 22.66 22.78. 22.90 23.01 23.12
Aug (GWh ) 19.86 20.08 20.30 20.51 20.73 20.92 21.12 21.32 21.50 21.69 21.86 22.03 22.20 22.36 22.51 22.67 22.81 22.95 23.08 23.21 23.33 23.45 23.56 23.67
Sep ( GWh) 20.35 20.61 20.85 21.10 21.34 21.56 21.80 22.00 22.23 22.43 22.64 22.83 23.02 23.21 23.40 23.57 23.74 23.92 24.08 24.24 24.40 24.55 24.69 24.83
Oct (GWh ) 20.14 20.38 20.63 20.86 21.09 21.32 21.53 21.75 21.94 22.15 22.34 22.53 22.72 22.90 23.07 23.23 23.40 23.56 23.71 23.86 24.01 24.13 24.27 24.41
Nov ( GWh) 18.71 18.93 19.14 19.35 19.55 19.74 19.94 20.13 20.32 20.49 20.68 20.85 21.01 21.18 21.35 21.49 21.64 21.79 21.91 22.04 22.17 2229 22.40 22.50
Dec (GWh) 20.33 20.54 20.77 20.97 21.18 21.37 21.57 21.77 21.95 22.14 22.32 22.49 22.66 22.83 22.98 23.14 23.29 23.44 23.58 23.71 23.84 23.97 24.09 24.19 cx CC
78
TARIFF PETITION
Wind
Jan
Feb
Mar
Apr
May
Jun
(GWh ) 26.22 26.34 26.46 26.59 26.71 26.82 26 .92 27.03 27.14 27.24 27.33 27.42 27.51 27.60 27.68 27.76 27.83 27.89 27.96 28.03 28.09 28.15 28.21 28.26
Jul GWh ( ) 23.21 23.31 23.41 23.50 23.57 23.65 23.72 23.79 23.85 23.91 23.97 24.02 24.06 24.10 24.13 24.17 24.20 24.22 24.24 24.26 24.27 24.28 24.29 24.29
Aug
Sep
Oct
Nov
Dec
Speed 12.3 12.4 12.5 12.6 12.7 12.8 12.9 13 13.1 13.2 13.3 13.4 13.5 13.6 13.7 13.8 13.9 14 14.1 14.2 14.3 14.4 14.5 14.6
( GWh) 23.34 23.43 23.51 23.57 23.64 23.70 23.76 23.81 23.86 23.90 23.94 23.98 24.01 24.03 24.06 24.06 24.07 24.08 24.09 24.09 24.08 24.08 24.07 24.06
(GWh ) 21.35 21.41 21.49 21.56 21.63 21.69 21.75 21.81 21.85 21.90 21.93 21.97 22.01 22.04 22.06 22.09 22.11 22.12 22.14 22.14 22.15 22.15 22.15 22.14
( GWh) 25.09 25.20 25.32 25.44 25.54 25.64 25.73 25.83 25.92 25.99 26.07 26.14 26.21 26.26 26.32 26.37 26.41 26.44 26.47 26.50 26.53 26.54 26.56 26.56
(GWh ) 24.49 24.60 24.70 24.81 24.92 25.02 25. 11 25.20 25.29 25.37 25.45 25.52 25.59 25.66 25.71 25.77 25.82 25.87 25.91 25.95 25.98 26.00 26.03 26.05
( GWh) 25.25 25.37 25.49 25.59 25.69 25.79 25.88 25.97 26.05 26.13 26.21 26.27 26.34 26.41 26.46 26.51 26.56 26.61 26.65 26.69 26.73 26.75 26.77 26.79
(GWh)
23.76 23.86 23.95 24.04 24.11 24.18 24.25 24.31 24.37 24.43 24.48 24.52 24.56 24.59 24.60 24.63 24.64 24.66 24.67 24.67 24.68 24.67 24.66 24.65
(GWh)
24.97 25.10 25.22 25.35 25.48 25.59 25.69 25.80 25.91 26.00 26.09 26.18 26.26 26.34 26.41 26.47 26.54 26.60 26.66 26.71 26.75 26.''8 26.82 26.14
(GWh)
24.53 24.64 24.76 24.87 24.98 25.07 25.16 25.26 25.35 25.43 25.51 25.58 25.65 25.70 25.76 25.82 25.87 25.92 25.96 25.99 26.02 26.05 26.07 26.09
(GWh)
22.60 22.70 22.78 22.87 22.94 23.01 23.07 23.13 23.19 23.22 23.27 23.30 23.33 23.36 23.38 23.39 23.40 23.41 23.41 23.40 23.40 23.38 23.37 23.35
(GWh)
24.30 24.41 24.51 24.60 24.66 24.74 24.81 24.88 24.93 24.99 25.03 25.06 25.09 25.11 25.13 25.14 25.14 25.14 25.14 25.13 25.12 25.09 25.07 25.04
79
TARIFF PETITION
Wind Speed 14.7 14.8 14.9 15
Jan ( GWh) 24.04 24.02 24.00 23.97
Feb (GWh ) 22.13 22.12 22.10 22.08
Mar ( GWh) 26.56 26.56 26.55 26.53
Apr (GWh ) 26.06 26.07 26.07 26.07
May ( GWh) 26. 80 26. 82 26.82 26. 82
Jun (GWh ) 28 .29 28 .33 28.37 28 .39
Jul ( GWh) 24.29 24.28 24.27 24.26
Aug (GWh ) 24.64 24.62 24.60 24.59
Sep ( GWh) 26.87 26.89 26.89 26.90
Oct (GWh ) 26.10 26.11 26.11 26.11
Nov ( GWh) 23.33 23.30 23.27 23.24
Dec (GWh) 25.01 24.96 24.92 24.86
80
10.2 MONTHLY ENERGY PAYMENTS (BENCHMARK & BONUS) As per RE Policy 2006, wind risk is ;,uaranteed by the Government of Pakistan and the tariff is based on the monthly benchmark energy table based on the monthly benchmark wind speeds. Therefore, monthly payments shall be made for the benchmark energy produced by the Project. Further, the bonus payments are also applied on any energy produced over and above the benchmark energy. The standard EPA approved by the GOP provides for payment of bonus energy on monthly basis. There is no differentiation in the RE Policy between the timing for payments for monthly benchmark energy and bonus payments. NTDC has in recent negotiations shifted the bonus payments towards the end of the year on the argument that" NEPRA's determination was silent on this issue". It is most unfair for a Project to be penalized for the shortfall energy (energy production below the monthly benchmark energy) on a monthly basis, but not allowing the quid pro quo of the 10% bonus payment also on monthly basis. The Petitioner therefore prays that NEPRA state explicitly in the tariff determination that bonus energy payments should also be made on monthly basis; if this is not agreed, then any shortfall energy payments should also be deferred for payment at the end of a year, It is proposed to allow payment of bonus energy on a monthly basis in the same manner as the payment of benchmark energy is made by the Power Purchaser under the EPA. For each month, the benchmark energy and the bonus energy (if produced) shall be determined and paid by the purchaser. 10.3 POWER PURCHASE PRIOR To COD It is standard practice for wind power projects internationally to come online one WTG at a time, thereby, enabling the wind t.irm to commence dispatching energy to the grid as soon as a \VTG is capable of power generation. Commissioning of a WTG cannot be completed without the substation being completed, tested and commissioned, therefore, all protection and safety equipment required to ensure smooth, safe operation of the wind farm (and the grid) would already be in place prior to commissioning of the WTGs. As soon as a %Y/TG has been commissioned, it is ready to supply energy to the grid. The standard EPA approved by the GOP permitted wind power developers to claim compensation from MDC for supply of electricity prior to achievement of COD. This has, however, been removed from the latest draft of the EPA. NEPRA is therefore requested to allow the Project to claim compensation from the Power Purchaser for all electricity supplied into the grid system prior to achievement of COD at the tariff rate applicable for the first year of operation minus the debt servicing components of the tariff. In case the Project is not allowed to claim compensation, there will be no motivation for the Project to supply energy into the grid - which could otherwise assist in reducing the demand-supply gap.
81
SAPPHIRE. WIND POWER COMPANY LIMITED
TARIFF PETITIOPJ
11. GENERAL ASSUMPTIONS

The following have been assumed while calculating the Reference Generation Tariff and changes in any of these assumptions will result in changes in the Reference Generation Tariff.
1. Debt : Equity ratio is assumed to be 75:25.
2. Foreign lenders shall contribute towards funding 87 . 94% of the Debt (LIBOR based financing) while the remaining 12.06% will be funded through local financial institutions ( KIBOR based financing). 3. Interest rate for LIBOR based debt (ECO Trade Development Bank) has been determined based on 6 Month LIBOR plus 4.5% Spread ( including the ADB REDSIP Guarantee markup of 100 bps) and semi - annual indexation on the same will be allowed by NEPRA. 4. Interest rate for LIBOR based debt ( Industrial and Commercial Bank of China) has been determined based on 6 Month LIBOR plus 5% Spread (including the ADB REDSIP Guarantee markup of 100 bps) and semi-annual indexation on the same will be allowed by NEPRA 5. Indexation against PKR / USI) variations will be permitted for debt servicing payments to be made for settlement of foreign source debt. 6. Interest rate for KIBOR based debt has been determined based on 6 Month KIBOR plus 3.00%b Spread acid semi -annual indexation on the same will be allowed by NEPRA. 7. A constant ROE of 18%0 (IRR based) is assumed (net of 7.5% withholding tax on dividends) over 20 years. The ROE DC shall be accrued at the time of COD according to the actual schedule of equity disbursement.
8. Exchange rate have been assumed to be: PKR 86.2 /USD.
9. Any taxes federal, provincial , local or district, stamp duties and levies etc which are not factored in the tariff calculation shall be treated as pass through items, in term of EPA. . 10. No customs duties and income tax have been considered for imports. Any changes in the customs duties or any other duty or tax on import of equipment and material will be treated as "pass through" to the Power Purchaser. Similarly, customs duties on spare parts after COD will be "passed through" to the Power Purchaser. 11. The Project does not come under the ambit of Sindh Sales Tax on Services Act, 2011. In case it is deemed that the Project is subject to payment of any taxes under said act, the same are to be treated as a pass-through to the Power Purchaser. 12. Deduction of withholding tax is assumed only in the On-Shore Contract. No withholding tax has been considered in the Off- Shore Contract. Any additional tax, if levied, will be "pass through" to the Power Purchaser
82
13. 7.5% withholding tax on dividend is assumed. Any changes in the aforesaid withholding tax regime will be "pass through" to the Power Purchaser. General Sales Tax and all other taxes will also be treated as a "pass through" 14. The Zakat deduction on dividends (currently @ 2.5%), as required to be deducted under Zakat Ordinance, is to be considered as "pass through". -15. Sindli Infrastructure Development Surcharge @ 0.850% of the imports for the Project has been assumed. 16. Federal Excise Duty has not been assumed as part of the Project Cost; in case the same is required to be paid by the Project, the same should be treated as passthrough under the tariff. 17. The Return on Equity for the construction and commissioning period, shall be adjusted on IRR basis at the time of COD according to the actual Equity disbursement during such period 18. The Power Purchaser / NTDC shall be exclusively responsible for the financing of construction , operation : ind maintenance of the interconnection and Transmission Lines as per the prevailing policy at the time of tariff determination 19. Main Energy meter and electronic recorder for continuous recording of readings will be provided -by NTDC at it> own cost. 20. Financing Terms are as yet based on the initial discussion with the financial institutions and hence are subject to final negotiations once tariff has been determined by NEPRA and the EPA / IA are signed. This will include mainly the debt-equity ratio, Grace Period and loan repayment term, benchmark index (LIBOR/KIBOR) and the spread margin of the financial institution. 21. Pre -COD insurance costs are considered based on the proposal received from top local insurance company . Premium rate for the insurance arrangements will be fin.-lined at the time of financial closure. 22. No hedging cost is assumed 6r exchange rate fluctuations during construction and all cost overruns resulting from variations in the exchange rate during construction shall be included iii the Project Cost. 23. Project contingency and maintenance reserves are not included in Reference Generation Tariff calculations. If req. iced by Lenders, these will be adjusted accordingly in the Reference Generation Tariff. 24. Any other assumptions that an not expressly stated herein but are based on the EPA draft negotiated by the Project Company with the Power Purchaser. Consequently any change in any such assumptions may lead to change in the Reference Generation Tariff,
25. The payments to Workers \Veltare Fund and Workers Profit Participation Fund have not been accounted for in the Project budget and have been assumed to be reimbursed at actual by the Power Purchaser.
^^
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83
26. Any incentives given to any other Wind IPP shall also be given to the Project Company.
(1
't
84
SAPPHIRE \VIND POWER COMPANY LIMITED
TARIFF PETITION
12. TARIFF SUMMARY

In summation , the Project Company herewith most respectfully submits before NEPRA for its approval the matters set out in this Tariff Petition and further prays for NEPRA to kindly approve the f1 )llowing: 12.1 The Project Costs and related arrangements stated in this Petition be allowed to the Petitioner. 12.2 Energy production estimate of 138 .8 GWh for Year- 1 after COD and 140.9 GWh per annum for calculation of the tariff and energy payments for the years 2 - 20. 12.3 The Power Purchaser be directed to make payment against Bonus Energy (energy above the Monthly Benchmark Energy) on monthly basis. 12.4 The Project be allowed to claim compensation for energy supplied prior to COD at the rate of tariff allowed by NEPRA for the first year minus the debt servicing components. 12.5 Funding of the Project on a 75:25 - Debt: Equity ratio.
12.6 Debt to be split on 87.94%: 12.06% foreign (LIBOR): local (KIBOR) basis.
12.7 LIBOR based debt financing by ICBC with a base rate equal to 6-Month LIBOR plus a spread of 5.00% (including 1.00% for ADB REDSIP Guarantee), reasons for which have been explained under Section 6.2 (Debt Senhin0 above. 12.8 LIBOR based debt financing by ECO Trade and Development Bank with a base rate equal to 6 -Month LIBOR plus a spread of 4.50% (including 1 .00% for ADB REDSIP Guarantee ), reasons for which have been explained under Section 6 .2 (Debt Servieinyt above. 12.9 KIBOR based debt financing (13.38"/o) with a base rate equal to 6-Month KIBOR plus a spread of 3.00%, reasons for which have been explained under Section 6.2 (Debt Finanein& above. 12.10 Sharing of any CER related revenues subsequently realized, as per the Government of Pakistan policy.
12.11 A Return on Equity of 18%o (net of 7.5% withholding tax) on IRR basis along with Return on Equity during Construction Period, reasons for which have been provided in detail in Section 6 .4 (Equity) above.
12.12 Working Capital facility of PKR 85.50 million , to be adjusted at COD.

12.13 Indexations and adjustments for the individual tariff components , as detailed in
Section u 9 (Indexation, : l i jrutmentr and Cori Escalations) above.
85
12.14 Insertion of Benchmark Energy "Table and Monthly Complex Power Curve as Schedule 1 Annex 2 of the EPA, the same are provided under Sectio 1U.1 (Benchmark Enema Q; Complex Monthly Power Cum, Tables) above. 12.15 The Reference Generation Tariff pro vided under Section 8 .2 (R ference Generation Tariff Table) above along with individual tariff components and debt schedule provided under Section 1.1 (Debt Schedule) above. 12.16 12.17 Adjustments at COD, as provided under Secdo 9.2 (Adjustments at COD) above. The General Assumptions, as provided in Section, II l(GeneralA ssumptions).
Furthermore , given the advance stage of the Project, NEPRA is kindly requested to process the Tariff Petition at the earliest thereby enabling the Project Company to proceed further with the development process
^^
`^
},
86
Government of Pakistan Alternative Energy Development Board (AEDB)

3, Street No. 8, F - 813, Islamabad. Tel: 92 51 9262947- 50. Fax : 92 51 9262977
B/3/1/SWCPU07 Mr. Khalid Aslam Director Projects Sapphire Wind Power Company Ltd. 313-Cotton Exchange Building I.I.Chudrigar Road
a7 August 2011
Karachi. Subject: PROVISIONAL APPROVAL OF FEASIBILITY STUDY

This refers to your communication dated August 26 , 2011 regarding the subject cited above. 2. Alternative Energy Development Board (AEDB) is in receipt of the revised feasibility study of your wind power project . AEDB has initiated the review of the revised feasibility study. The approval of Feasibility study is linked with the following milestones; Verification of Power Production Estimates from Risoe. Approval of Grid Interconnection studies from NTDC Approval of EIA/IEE Study from EPA, Sindh. 3. AEDB acknowledges that the IPP has already acquired the necessary approvals of the Grid Interconnection study and IEE study from the relevant agencies. AED.B has initiated the process of verification of production estimates through RISO. AEDB hereby, provisionally accepts the feasibility study of the wind power project of M/s SWPCL. The final approval of the feasibility study shall be accorded based on the verification of power production estimates by RISO. M/s SWPCL may however proceed ahead with the application of tariff to NEPRA.
(Syet "Ageel Hussain Jafri) Deputy Director (Policy)
101
317-C.fwn E-da v - 8..iWin9. ll. ct...th.w. Ro J, K 4 i-71000 Pakjr .

rh n . 92-71 - 11 1-000.100 Fm Y7,71.7416705 , 92.21-2117414 [.moll : kaod . i.dlk*lwpp&.. un,pk
,.. 11) ph i re
To, Mr. Amjad Rana. Chief Executive officer National Transmission and Dispatch Company Limited. WAPDA House, Shahrah - e- Quaid - c- Azam, Lahore,
vi
Ref: NTDC/OTS-I/2011 August 9, 2011
Pakistan.
Dated !r.p^PJ 010 C'0
Subject Offer to sill power by Sanohire Wind Power Co. Ltd. to National Transmission And Dianatc\ Comrianr L(mltal (rots It$ 493:MW dêewer rer+e_rrlloe facility to be located at Jhimoir. District Thatta. Sindb. Pakistan Dear Sir,
We, Sapphire Wind Power Company Limited (SWPCL), refer you to the energy purchase agreement (the Energy Purchase Agreement) - to be executed between SWPCL and National Transmission And Dispatch Company Limited (( through its Central Power Purchasing Agency) on behalf of exWAPDA Distribution Companies)) (the Power Purchaser) - relating to the SWPCL 49.5 MW wind power generation facility to be located at 7hlmpir, District Theta. Sindh, Pakistan ( the Project). It is humbly highlighted that pursuant to the section 8.2.1 of the Policy for Development of Renewable Energy for Power Generation 2006 (the RE. PoUcy 2006), it is mandatory for the power distribution utilities to buy all electricity offered to them by renewable energy projects that are established in accordance with the provisions given in section 8.2.2 of the RE Policy 2006. Further since the Project is in accordance with section 8.2.2 of the RE Policy, section 8.2.1 will be applicable to it. In view of the foregoing , SWPCL hereby offers for sale to the Power Purchaser the power to he gcuttaAcd through its Project pursuant to the terms of the Energy Purchase Agreement (the Offer For Sale ofPower). We hope that SWPCL's Offer For Sale of Power to the Power Purchaser will enable the Power Purchaser to meet its regulatory requirements relating to the purchase of power from the Project and look forward to expeditious conclusion of such process . We thank you for your continuing support to the development of wind power sector in Pakistan and to our Project. Sincerely, For and on behalf of
SAPr111RE WIND POWER COMPANY LIMrreo
KIIAI.tu ASLAM
CC:
Mr. Khadim Hussain Baluch , Chief Engineer, NTDC
1, fl r2
INTERVENTION REQUEST PETITION FILED BY SAPPHIRE WIND POWER COMPANY LIMITED FOR DETERMINATION OF REFERENCE GENERATION TARIFF (CASE NO. NEPRA/TRF-187/SWPCL-2011)
Name/Address
Manner in which the intervener is likely to be affected by any determination in the proceeding. Contention / Grounds of making the formal request
(*)
(*) Relief Sought (if any).
(*) Brief of evidence (if any)
(*) Comments.
(*) (*) Add additional Supplements if required Date: Signature To be accompanied with: 1. An affidavit on stamped paper ( sample attached ), sworn before an authorized officer. 2. Intervention Request Fee
%-"il I KAN 1 3 Vr AV r i uA V I I
The affidavit to be submitted with any petition or communication where in any statement of fact or opinion is made by the petitioner or the communicator, shall be drawn up in the first person stating the full name, age, occupation and address of the deponent and the capacity in which he is signing and indicating that the statement made therein is true to the best of the knowledge of the deponent, information received by the deponent and belief of the deponent, and shall be signed and sworn before a person lawfully authorized to take and receive affidavit, provided that, a communication filed during the course of a hearing may be affirmed in person before the Authority by the person filing the same.
Where any statement in an affidavit given as per paragraph above is stated to be true according to the information received by the deponent, the affidavit shall also disclose the source of such information.

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Tariff Petition of Sapphire Wind Power Company

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r- r, 1 :

Sapphire Wind Power Company Limited

Fax: 051921 .02 15

Your ref.: NEP1tA /TRI'-100 /7571 dated 07.09.11

Sapphire Wind Power Company Limited

Syed Safeer Hussain Registrar

We hereby re-,Ll est .., ^

tt, ' l^ L IC C ontracts and the EP

SAPPHIRE WIND POWER COMPANY LIMITED

Sapphire Wind Power Company Limited

this is a true co1y of' (lie said resolution .

"o ^olf f` Bon's

BEFORE THE NATIONAL ELECTRIC POWER REGULATORY AUTHORITY

We, Sapphire Wind Power Company Limited

.ompany "), hereby appoint and ( the "('

Signature: Received by us: From:

RIZVI, ISA, AFRIDI & ANGELL

Sapphire Wind Power Company Limiter

Syed Safeei- Hussain Registrar

SAPPHIRE WIND POWER COMPANY LIAIITEI) TARIFF PETITION

BEFORE THE NATIONAL ELECTRIC POWER REGULATORY AUTHORITY (NEPRA)

SAPPI TIRE FIND POWER COMPANY LIMITED

^t ^F. A R ^\\ I I 1itc >II'C i C) iii t^^^

DATED :. lugusl 30 ''', _011

lax #: 11092 -21-32" 416705

SAPPHIRE WIND POWER COMPANY LIMITED TARIFF PETITION

SAPPHIRE WIND PO ER COMPANY LIMITED BOARD RESOLUTION

SAPPHIRE WIND POWER COIIIPANI' LIMITED TARIFF PETITION

SAPPHIRE WIND POWER COMPANY LIMITED TARIFF PETITION

SAPPHIRE WIND POWER COMIPANY LIAIITEI )

SAPPHIRE WIND POWER COMPANY LIMITED

SAPPHIRE WIND POWER COMPANY LINIITEI TARIFF PETITION

SAPPHIRE WIND PONDER COMPANY LIMITED TARIFF PETITION

SAPPHIRE WIND POWER COMPANY LIMITED TARIFF PETITION

Regulatory 1 ramework Leading to Tariff Petition.............................................. 12

SAPPHIRE WIND POWER COMPANY LIMITED TARIFF PETITION

(b) ANNEXURE B -1'1 :(:I INu:,\I Fl {.\SII111.I 1'1' .\i'I'RO\',V.;

(c) ANNEXURE C - NTDC - C; K11) C( . )NN I:(;1'1ON Al'1 ']t(\'.11.;

(e) ANNEXURE E - DHI'1' FIN.\NCINU TIT m SI II-1-:1

(f) ANNEXURE G - P( )\C'I:It PURcI I.\SI:R CONSENT LE'ri'IiR

(g) ANNEXURE H - INI-11.AI. E^`V'lit( (N^111:N1'.A1. E\.At'IIN:ATI( )N (lEE) .^PI'It0V':AI.

SAPPHIRE WIND POWER COMPANY LIMITED TARIFF PETITION

1. DETAILS OF THE PETITIONER

SAPPHIRE WIND POWER COMPANY LIMITED

2. REGULATORY FRAMEWORK LEADING TO TARIFF PETITION

NEPRA Act & NEPRA Rules

SAPPHIRE WIND POWER COMPANY LIMITED TARIFF PETITION

(a) Grid Interconnection Studies approval from NTDC

with NTT-)C rcalui lienrs, Sapnhtre ^t

\r'ind Po wer C o mpany

(iii) Transient Stability Analysis; and

SAPPHIRE WIND POWER COMPANY LIntITE1)

SAPPHIRE WIND POWER COMPANY LIMITED TARIFF PETITION

SAPPHIRE WIND POWER COMPANY LIMITED

SAPPHIRE WIND POWER COMPANY LIMITE.D TARIFF P ET I T I O N

Debt for the project will be pruvidcd by:

( 1) EGO Trade & Development Bank - 31 . 04/u (of Debt);

Sapphire Wind Power Company Limited Sapphire Textile Mills Limited

Non EPC Cost

Insurance during Construction Financial Charges Sino;ure Fees

1,466 3,602 4,635

Interest During Construction

Debt 75", F.1uir' 25',

SAPPHIRE WIND POWER COMPANY LIMITED

Major Tasks Completed Executed EPC . Executed term Environmental