Project Financing

1. +
TRINCOMALEE WIND
POWER PROJECT
13.11.2015
Daichi Okamoto (2B5046) (Group
Leader)
Samangika Abheysinghe (2B4002)
Bannick, Swagat Shyam (2B4011)
Senwayo, Lucia Veronica Denis
GROUP - D

2. +
Project Objective
■ Sri Lankan government has set goal to meet at least 20%
of the country’s total electricity requirement through
renewable energy sources by 2020.
■ TPP plans to generate and contribute 35 MW of
electricity in to the Central Grid through wind energy
at viable price for the Government
■ Have been proposed by SSLDA and consortium for a
credible Wind Power Project to be initiated in Trincamole,
Sri Lanka
■ Finance team and Energy Team has done a due
Diligence
■ Here are our Findings for your kind consideration
Proposal Context

3. + Location >>>> Trincomalee - Sri Lanka

4. +
2. SPONSORSHIP &
MANAGEMENT

5. + History and Business of Sponsors
1. SSLDA Power Company
■ 25 year experiences as a financial and technical assistance in medium
and large scale energy projects
■ Enhance awareness on environmental and social issues
2.Ceylon Electricity Board (CEB)
■ Established on the 1st November 1969
under the Act of Parliament No. 17 of
1969 in Sri Lanka
■ Empowered to generate electrical energy,
transmit the same and distribute it to reach
all categories of consumers and to collect
the revenue.
■ Has conducted 167 non conventional
renewable energy projects

6. + History and Business of Sponsors
3.Mitsubishi Heavy Industries Ltd.(MHI)
• Highly renowned for high
quality wind turbine
generators.
• Manufactured and
delivered more than
2,250 units all over the
world.

7. +
3. MARKET AND
SALES

8. + Wind Power Demand
■ The rising demand for energy has doubled in Sri Lanka due to the booming
economy.
■ Emergency of energy intensive industries, such as agriculture and tourism, cropping up.
■ The potential for growth in the industry is expected to reach at least 300 megawatts of
wind power being added to the national system within the next three years.
■ Limitation of fossil fuel
■ sources of energy : 45% hydropower, 48% thermal sources and 7% New-renewable
sources of energy. However:
■ Considerable amount of wind power potential installed capacity is available
■ There is possibility to develop further around 100MW wind power generations in Sri
Lanka.
■ As alternative energy became vital to meet the demands in Future.
■ The government has set a goal to meet at least 20% of the country’s total electricity
requirement through renewable energy sources by 2020.
■ Friendly Environment

9. + Power Generation And Sales

10. + Power Generation And Demand

11. + Electricity Production Cost
■ Cost of wind power generation is competitive with the other sources of
renewable in Sri Lanka.
■ The estimated cost of energy for wind energy is 7.70 Rs./kWh and the average
cost of energy in Sri Lanka is 13.40Rs./kWh.
SOURCE : Https://Www.Google.Com.Br/#Q=nayaraya+wind+power+in+sri+lanka

12. +How Cost Competitive Is Onshore Wind Power?
■ The range of generation costs for onshore wind is the cheapest renewable technology.
■ Easy-to-develop onshore site with high winds speeds in a country where manufacturing and labor costs
are low.
■ Offshore location with low wind speeds is more than five times as expensive.
■ For every MW/h of electricity generated, onshore wind costs roughly $113 per MW/h, compared to gas
and coal which can cost up to around $176 per MW/h, respectively. Nuclear power, offshore wind and
solar energy are at roughly $134 per MW/h.

13. + How cost competitive is Onshore wind power?
 The generating costs is low in Onshore wind power
 Onshore installations and turbine costs has been falling, while offshore has
been increasing
SOURCE : http://www.windpowermonthly.com/article/1330525/onshore-wind-competitive-ever

14. +
4. TECHNICAL FEASIBILITY, MANPOWER, RAW
MATERIAL AND ENVIRONMENT

15. + BRIEF DESCRIPTION OF THE MANUFACTURING
PROCESS.

16. + COMMENTS ON SPECIAL TECHNICAL
COMPLEXITIES AND NEED FOR KNOW-HOW AND
SPECIAL SKILLS.
COMPLEXITIES
& SKILLS
FINANCE
MECHANICAL
ENGINEERING
ENVIRONMENT
ENGINEERING
ELECTRICAL
ENGINEERING

17. + POSSIBLE SUPPLIERS OF EQUIPMENT.

18. + PROJECTED OPERATING COSTS BY MAJOR CATEGORIES OF
EXPENDITURES
GENERAL LIABILITY
PROPERTY
BUSINESS INCOME (LOSS OF PROFIT)
EQUIPMENT PROTECTION (FROM BREAKDOWN)
MANUFACTURER'S WARRANTY (USUALLY 2 YEARS
WITH THE POTENTIAL TO EXTEND OUT TO 5)

19. + IMPORT RESTRICTIONS, IF ANY, ON REQUIRED RAW MATERIALS.
With the expectation of promoting electricity generation based on non conventional
renewable energy, the Government of Sri Lanka introduced an Energy Policy to
achieve a 10% target of power generation through non conventional renewable
energy by year 2015.
There are four important aspects of Regulations that has to be taken care of :-
• Getting Import Licenses and approval from Department of Import & Export Control
• Approval from Ministry of Environment
• Approval from Ministry of Urban Development
• Approval from Central Environment Authority & Electricity Board
Project Name Operator Output
Ambewela Aitken Spence Ace Wind Power P L 3
Vallimunai Beta Power 12
Pollupalai Joule Power 12
Mampuri Senok Wind Energy 10+10.5+10.5
Madurankuliya Daily Life Renewable Energy 12
Nirmalapura Nirmalapura Wind Power 10.5
Uppudaluwa PowerGen Lanka 10.5

20. +
In Trincamolee Sri Lanka, there are multiple factors to be
considered :-
• Land Usage Pattern
• Endangering the domestic and wild animals in the bio diversity
habitat
• Being an marine habitat, lot of aerial activities by birds
and other flying creatures might be disrupted
• Public Health & Community
• Sound and visual impact are the two main public health
and community concerns associated with operating wind
turbines.
• Life Cycle Global Warming Emissions
• There are emissions associated with other stages of a
wind turbine’s life-cycle, including materials production,
materials transportation, on-site construction and
assembly, operation and maintenance, and
decommissioning and dismantlement.

21. +
5.FINANCE

22. +
P
R
O
J
E
C
T
C
O
S
T
T
A
B
L
E

23. +
Trincomalee Wind Power Project
Financing & Scheme
Trincomalee
Wind Power
Project
($50mill)
IFC –
International
Finance
Corporation
CEB
(Ceylon
Electricity
Board)
SSLDA
Power
Company
Project
finance
$10 mill
Loan
$7.5mill
Equity
$12.5mill
Equity
assist the financial
plan and
environmental
issues
Assist
technical
issues
Electricity
Commercial
Bank of
Ceylon
$16 mill
Loan
Others
$4 mill
Equity

24. +

25. +
6.GOVERNMENT
SUPPORT AND
REGULATIONS

26. +Government Support and Regulations
Government
Economic
Development
Program
Develop 5
Strategic
Hub
Energy
Knowledg
e
commercialAviation
Naval &
Maritime
Government Objective
To make Sri Lanka an
energy self-sufficient nation
by 2030
country secured with energy by
minimizing the use of fossil fuels,
and moving towards renewable
energy
Investment Opportunity
Developing & Promoting Of Non Conventional Energy Sources With Improved
Technology

27. +Supportive Government Policies
Economic liberalization
No restrictions
on repatriation
of earnings,
fees, capital
Safety of
foreign
investment is
guaranteed by
the constitution
Index of
Economic
Freedom -
ranked 90
Doing Business
Ranking 99
No.01 in South
Asia
Transparent investment laws
Total foreign
ownership is
permitted
double taxation
avoidance
agreements 38
countries
Bilateral investment
protection
agreements with 28
countries
A safeguard against expropriation
and non-commercial risks
Founder member of the
Multilateral Investment
Guarantee Agency (MIGA)
An investment guarantee
agency of the World Bank

28. + Expectant Contribution of Project to
Economic Development
Increas
e FDI
Ensure
sustainable
energy
supply to
the
economy
Generate
direct and
indirect
employment
to economy
Facilitate
other strategic
development
areas (Hub)
Productivity
improvement
and
Growth of the
country
economy

29. +
WE APPRECIATE YOUR TIME AND EFFORT
OUR RECOMMENDATION
PROJECT IS GREEN FOR APPROVAL AND SANCTION BECAUSE
OF :-
• ENERGY INDUSTRY
• ALLIGNED WITH GOVERNMENT OBJECTIVES
• NON RISK EQUITY & SPONSORS
• DESIRED BREAK EVEN & FINANCIALLY FEASIBLE
• GOVERNMENT AND PUBLIC SECTOR BACKED
• ENVIRONMENTALLY SUSTAINABLE
• ROI IN LINE WITH OUR TERMS