Note on Competitive Bidding Guidelines for Ultra Mega Power Projects

based on allocated domestic captive coal blocks and to be set up on Build,

Own and Operate (BOO) basis
1. Guidelines
Present guidelines is for long term procurement for a minimum period of 25 years by Distribution
licensees or the body authorised by the State from power producers on BOO basis from captive
coal blocks
Central Electricity Authority (CEA) is the Technical Partner and Power Finance Corporation
(PFC) is the nodal agency for the UMPP initiative
Procurement to be conducted through authorised representative, it could be one of the procurers
or operating SPV. Authorised representative will undertake necessary Project development
activities and to conduct on their behalf the bidding process for selection of Developer for the
UMPPs and to take all necessary actions as may be required for such selection and matter
incidental thereto
Activities
to
be
completed before RfQ
Issuance
Two SPV viz., Operating SPV and Infrastructure SPV shall be incorporated
Operating SPV will have objective to let the successful bidder to develop the project through operating SPV
Infrastructure SPV will own the mining rights and land required for power station. At the end of the bidding process, the
captive coal block and land for the power station will be leased to operating SPV
Land acquisition for captive coal blocks shall be the responsibility of procurers
Environmental Impact Assessment (EIA) report for power station shall be made available
Procurers shall provide for water linkage for the project in name of Operating SPV

Activities
to
be
completed before RfP
issuance
Site identification and Land Acquisition for the Power Station for captive mine and land for power station in name of
Infrastructure SPV
Environmental Clearance for the Power station
Forest Clearance (if applicable) for the land for the Power Station
Connectivity and Long Term Open Access
Compilation of requisite Hydrological, Geological, Meteorological and Seismological data and preparation of a Detailed
Project Report (DPR) for Power Station as well as the Geological Reports for the Captive Coal blocks

Activities to be
completed before
Signing of Agrement or
Transfer of Operating
SPV

Infrastructure SPV shall transfer the critical land for the Power Station on a lease basis to the Operating SPV, however,
other responsibility under Land Acquisition Act will lie with Operating SPV. All actions for the remaining area of the
land required shall be taken by Operating SPV in the name of Infrastructure SPV, which then will be leased to Operating
SPV
Infrastructure SPV shall transfer the land that is sufficient to enable the Operating SPV/Seller to source coal required to
operate the Power Station at normative availability for a period of at least five years from the COD of 1st Unit of the
Power Station, on a lease basis, however, other responsibility under Coal Bearing Act, will lie with Operating SPV. All
actions for the remaining captive coal blocks required shall be taken by Operating SPV in the name of Infrastructure SPV,
which then will be leased to Operating SPV
Environmental Clearance and Stage I-Forest Clearance shouldve been obtained in name of Operating SPV

Procurers to appoint an Independent Engineer within 6 months of the effective date of Agreement

Disclaimer: This document is personal interpretation of mine and has nothing to do with organisational view or interest

Bidding Process

Publication of RfQ
ZERO DATE

Submission of Responses of
RFQ
Within 45 DAYS

Issuance of RFP
Within 75 DAYS

RfP Bid Submission

Within 225 DAYS

Bid conferences, Final

Clarifications/amendments

Evaluation of bids and issue of

LOA
Within 240 DAYS

Transfer of Infra SPV to Procurers and execution of the following Agreements

(Within 300 DAYS):
Share Purchase Agreement
Default Escrow Agreement and the Agreement to Hypothecate cum Deed of
Hypothecation,
Land Lease Agreement for critical land,
Land Lease Agreement for the portion of land that is sufficient to enable the Operating
SPV/Seller to source coal required to operate the Power Station for a period of at least five
years from the COD of the first Unit;
Power Purchase Agreement

Successful bidder to be selected based on Levelised tariff based on escalation rates and discounting
factor determined by CERC from time to time basis.
Entire bidding process to be completed within 300 days, however, if it takes more than 730 days,
permission from central government must be required
Bid results, PPA signed must be made public

2. Analysis
Levelised tariff regime coming back with escalation rate defined by CERC

Separation of Infrastructure SPV and Operating SPV will mitigate the transfer pricing issues and related
party transactions significantly

Infrastructure SPV takes responsibility of land acquisition and captive coal block clearances only for
critical portion. The ultimate responsibility lies with Operating SPV

It is not clear whether the LTA and connectivity will be granted at the time of PPA signing or not. Which
in present transmission congestion is the risk

It is not clear on who will determine the transfer pricing of the leasing right of Infrastructure SPV to
Operating SPV

Present Case 2 model, is plug and play model kind of for developers to come, set up, own and operate a
power station

Disclaimer: This document is personal interpretation of mine and has nothing to do with organisational view or interest