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PURA Pilots – Financial model

PURA Pilots – Financial model. Mr. Prasanna Srinivasan. 17 th July 2012. Agenda. 1. Financial Model. 2. PURA Project Financials. 1. Financial Model. Financial Model. Due to thin revenue base, most capital expenditure from Government schemes

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PURA Pilots – Financial model

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  1. PURA Pilots – Financial model Mr. Prasanna Srinivasan 17th July 2012

  2. Agenda 1 Financial Model 2 PURA Project Financials

  3. 1. Financial Model

  4. Financial Model • Due to thin revenue base, most capital expenditure from Government schemes • Cost of each PURA project limited to Rs. 120 crores • Capital Grant limited to 35% of project cost for meeting viability gap – the PURA scheme fund of Rs. 540 crores is towards this grant • Flow of funds to private developer instead of Government Agency / Gram Panchayat • Dedicated bank account managed by DRDAs • Creation of risk fund for meeting Gram Panchayat event of default • 12% returns on investment budgeted as part of financial model (as per norms of Planning Commission)

  5. 1. PURA Project Financials

  6. PURA Project Financials - Sources of capital cost MoRD Non MoRD State Govt. Users Concessionaire Funds available under concerned MoRD schemes Funds available under concerned non MoRD schemes Contribution of the state share under MoRD and non MoRD schemes Contribution of the users share under MoRD and non MoRD schemes, if any** Contribution of the concessionaire for balance amount of capital costs Capital Costs Covering activities under MoRD schemes, non MoRD schemes and add on projects **In case PURA grant calculated at zero user charges, this revenue stream would go to the State Government/Panchayat

  7. PURA Project Financials - Assumptions relating to lifecycle costs • Operations & maintenance expenditure • Expenditure on operating and maintaining project facilities as per specified standards and specifications • Escalation of 5% per annum is considered • Management fee • Management fee taken as 1% of the capital costs • ROI from investment in projects under MoRD and non MoRD schemes • 15% of the Concessionaire’s investment of developing facilities under MoRD and non MoRD schemes, in line with government guidelines • Deficit ROI on add-on projects • Developer to indicate ROI on capital cost for developing add-on facilities • Payment to Independent Engineer • Rs. 12 lakhs per annum over the concession period, in line with market rates • Discounting rate • 12%

  8. Estimation of PURA grant (an example) (1/4)

  9. Estimation of PURA grant (an example) (2/4)

  10. Estimation of PURA grant (an example) (3/4)

  11. Estimation of PURA grant (an example) (4/4)

  12. Thank you

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