Power Sector India March 2009 Power Sector India March 2009

Key Trends: Increase in per capita consumption of electricity, Increase in corporate investments, Increase in FDI, increasing interest shown by PE/ VC firms in power sector and surge in captive Power trading is still at nascent stage with merely y% of the power generated traded in 200708 Distribution is primarily controlled by state electricity boards

(SEBs) Government policies are aimed at encouraging investment in the sector and increasing the competition Government allows 100% FDI under the automatic approval route in all segments of the industry (except atomic energy) 5year tax holiday is given for power generating projects Import duty at the confessional rate of x% has been set for import

of equipment Power trading is still at nascent stage with merely y% of the power generated traded in 200708 Distribution is primarily controlled by state electricity boards (SEBs) Government policies are aimed at encouraging investment in the sector and increasing the competition Government allows 100% FDI under the automatic approval route in all segments of

the industry (except atomic energy) 5year tax holiday is given for power generating projects Import duty at the confessional rate of x% has been set for import of equipment Executive Summary Market Overview & Value Chain Government Policies & Incentives Key Trends & Challenges . Public sector undertakings like AA Ltd , BB Ltd hold

the majority of the total installed capacity . Private players including ABC, XYZ have presence across value chain and making significant Competition investments in power sector . Foreign players like XY, ZY, AY have entered/planning to enter Indian power market . India has 5th largest electricity generation capacity in the world . The installed capacity of India as

of July 2008 was X MW . India is facing acute power deficit with peak power deficit of about x% production . Challenges: Shortage of coal, power loss in transmission and distribution, ageing and improperly maintained infrastructure POWER SECTOR INDIA.PPT

Introduction Power Sector Overview Value Chain Analysis Government Policies and Initiatives Key Trends & Challenges Competitive Landscape Key Developments Appendix POWER SECTOR INDIA.PPT

Installed capacity has been increasing continuously to meet the need of growing economy. . Supply Side Plan-wise Installed Capacity India has 5th largest electricity generation capacity in MW the world 140,000 Z Installed capacity of X MW as of July 2008 Y Nuclear Renewable Gasbased X 120,000 60,000

100,000 80,000 W Demand for power is growing at x% per annum Y ZPlanned Demand X w% Thermal y% z% v% Plan Hydel power x% VII VIII IX X Demand Side Current and projected demand MW bn units Energy Required Demand has five key components: 250,000 1,500 . Industry, commercial, residential, agriculture,

and others 200,000 Key drivers of increasing demand are growth in: 1,000 150,000 . Household consumption . Electrification of rural areas 100,000 500 . Manufacturing growing faster 50,000 . Realization of suppressed demand due to loadshedding 0 Required investment of ~USD X bn by 2017 0 X XI XII

Source: POWER SECTOR INDIA.PPT

Generators Traders Transmission Distribution End user Raw materials ------------------------Generators Traders Transmission Distribution End user Raw materials -------------

------------Public sector companies or State Electricity Boards ( SEB) have presence across the value chain Source: POWER SECTOR INDIA.PPT

Road v% w% Ports x% z% Urban Development Energy y% u% partnerships in infrastructure The power sector in India has not witness much PPP activity as compared to other sectors Power sector witnessed investments worth USD XX bn Government is encouraging PPP model to meet the capacity addition target of XY MW in XIth Plan

Government plans to promote PPP model in ash utilization, augmentation of transmission lines and distribution Distribution Franchisee Ultra Mega Power Projects (UMPP) Types of public private partnerships in India Road v% w% Ports x% z% Urban Development Energy y% u% partnerships in infrastructure The power sector in India has not witness much PPP activity as compared to other sectors

Power sector witnessed investments worth USD XX bn Government is encouraging PPP model to meet the capacity addition target of XY MW in XIth Plan Government plans to promote PPP model in ash utilization, augmentation of transmission lines and distribution Distribution Franchisee Ultra Mega Power Projects (UMPP) Types of public private partnerships in India Public Private Partnership

(PPP) model is not witnessing much activity compared to other sector in infrastructure PPP Model Overview

India has around x projects under the public private Airports Railways Source: POWER SECTOR INDIA.PPT

Key Trends Trends PE firms showing interest in power sector Increase in captive power production Increase in FDI Increase in domestic investments Increase in per capita consumption POWER SECTOR INDIA.PPT

Challenges Huge power loss in transmission and distribution Ageing and improperlymaintained infrastructure Shortage of coal Inability to meet the capacity addition targets Challenges POWER SECTOR INDIA.PPT

Majority of the installed power capacity in India with public sector undertakings Public Sector Players EBITDA (FY2007 8) Revenues (FY2007 8) Generation Transmission Distribution Total Capacity Company Name AA Ltd USD bn USD bn -MW BB Ltd USD mn USD mn -MW

CC Ltd USD bn USD mn -MW DD Ltd USD bn USD mn EE Ltd USD mn USD mn AA Ltd is the sixth largest thermal power producer in the world and India s largest power producer. It accounts for x% of

the country s installed capacity. It plans to invest up to USD XX bn by 2012 to transform itself into an integrated regional energy player and have an installed capacity of over X MW BB Ltd plans to increase the power generation capacity to over X MW by 2011 12 CC Ltd has 5 plants under construction adding X MW

by 2012 DD Ltd is responsible for interstate transmission of electricity. The company reported revenue of USD X bn in FY2007 EE Ltd is the Government of India initiated public private partnership, formed for the purpose of trading of power Source: POWER SECTOR INDIA.PPT

Thank you for the attention The Power Market report is a part of Netscribes Power Industry Series. For more detailed information or customized research requirements please contact: Natasha Mehta, CFA Subhash Chennuri Phone: +65 9651 6382 Phone: +91 98190 59664 EMail: natasham@netscribes. com EMail: subhashr@netscribes. com About Netscribes Netscribes is a

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POWER SECTOR INDIA.PPT