An excellent investment opportunity !
NOTE : This is such a Business / Project where there is no labour, raw material, electricity, marketing problems, and is run by professionally qualified hydel engineers and the Investor’s involvement is negligible, besides counting money for 60 yrs. Now is severe recession and most businesses are showing negative growth or failing, while the Power Sector is expanding by a 30 % sustained growth each year.
What is Hydro ?
Hydro-electric power is the technology of generating electricity from the movement of water. Small Hydro is the application of Hydro electric power on a commercial scale which can serve a medium sized Industry.
Hydropower is a renewable, non-polluting and environmentally benign source of energy.
The process is like this: Water is collected in an intake above stream and travels down through steel pipes and from a specified height falls on the Turbines which are connected to an electrical generator / alternator thereby generating electricity. The more the flow / fall there is, the more potential power can be generated.
Foreign Investment Policy
Foreign Investors can enter into a joint venture with an Indian partner for financial and / or technical collaboration and also for setting up of renewable energy based Power Generation Projects.
Liberalized foreign investment approval regime to facilitate foreign investment and transfer of technology through joint ventures.
The proposals for up to 74% foreign equity participation in a joint venture qualifies for automatic approval.
100 % foreign investment as equity is permissible with the approval of Foreign Investment Promotion Board ( F I P B ).
Various Chambers of Commerce and Industry Associations in India can be approached for providing guidance to the Investors in finding appropriate partners.
Government of India is also encouraging foreign Investors to set up renewable energy based power generation projects on Build, Own and Operate basis.
Subsidies and fiscal benefits offered by the Government of India are:
- Income tax benefits
- Accelerated depreciation for plant and machinery
- Customs duty and duty free import concessions
- Capital and interest subsidy
- Other incentives for preparation of feasibility reports and detailed project reports (DPR)
- Preferential tariffs are being worked out at the state government level, most incentives are focused on installed capacity as capital costs are typically high.
The Developer will be permitted to establish, own, operate and maintain the Hydro Project for a period of 40 yrs, extendable by 20 yrs. Thereafter the Project shall revert back to the State Govt free of all encumbrances.
Capital Subsidy will be 45% of Project cost limited to Rs 2.25 Crores + 37.50 Lacks per MW extra ( USD 583333 ) or the Project may get Interest subsidy, ie:1 Mw gets 7.5 % .
No Tax on Income for 10 Years.
1MW Project produces : 87 lack Kwhs / annum in full capacity and if the plant were to run on even 50 % utility then the net income still would be minimum INR 44 lacks / annum ( USD 97777 per Mw per Annum ).
Initially cost of generation is high, around INR 1.50 / Kwhs ( 3.33 Cents )because interest on loan has to be given to the bank, but every year Income starts rising as burden of interest reduces.When the loan has been returned then cost of generation per unit / Kwhs is around 45 paise equavalent to a Cent.
Loan / equity ratio is : 70 / 30 % . Cost per Mw works out to INR 6 to 7 crores ( USD 1.3 to 1.5 Million.
- Incentives for Solar Power :
- R&D subsidy to the tune of 100% of project cost in government R&D institutions and 50% in the case of private institutions
- Specific incentive scheme for solar power launched in 2008 expected to cost the government Rs 90 crore and bring in private investment to the tune of Rs 1000 crore:
- Generation based incentive of Rs 12 per kilowatt from solar photovoltaic cells
- Generation based incentive of Rs 10 per kilowatt for power generated through solar thermal power plants
- Wind Energy schemes offers:
- 10 year income tax exemption
- 80% accelerated depreciation
- Sales tax and excise duty exemption
I can arrange small / Medium Hydro options in Himachal Pradesh / Uttrakhand states of Northern India.
Some options in wind Power Projects too. PPA done for 25 years. Cost of installation is the same as of a Hydro Project and time for getting it going is 1/4th, that of a Hydro Project. We shall also arrange for it's Installation, Operation & Maintenance contracts.
Process of acquisition : The prospective buyer shall have to contact me and let me know their Budget and in return I shall suggest a few good Projects which falls in his Budget, get him all relevant documents, organise Site visit, meet up with the seller. Foreign Big Investors are most welcome. We could get you JV's or 100 % acquisition models. On equity sharing model the Investor only needs to get the funding, Operations and maintenance we can handle on their behalf. Ours is a Team involved in this work and have mandate direct from maximum Project Sellers and contacts in the Departments concerned.
We can even get you Solar based Projects / Thermal Projects of big size, wherein also the Government buys back all the electricity so generated.
For any other information you may contact me – Captain ( Ex Army ) Arun Chandel ( Domicile of Himachal & Uttrakhand ),India at +91 9871057446, 100 / 22 Silver Oaks Appartments, DLF Phase 1, Gurgaon, Haryana.
( Gurgaon - Faridabad road ) India.
Note : I am a Facilitator for acquisition of Projects & not the Owner of the Projects.
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