Transmission and Distribution - Role of Indian Electrical Equipment in the XII Year

Plan.

Presentation by: Sterlite GridAjay Bhardwaj COO

Index

1. Sterlite Technologies – A Vedanta Group Company.

2. Transmission Industry in India – Growth Prospects.

3. Sterlite Technologies Presence in Private Transmission Sector.

sterlitetechnologies.com | 3

STERLITE TECHNOLOGIES A Vedanta Group Company

sterlitetechnologies.com | 5

sterlitetechnologies.com | 6

Transmission Industry In India Growth Prospects

Snapshot of Transmission Industry

Source: CEA, Analyst Reports

10th Plan: 2002-07, 11th Plan 2007-12, 12th Plan: 2012-17

Thrust on transmission Sector reflecting in the capacity buildup and planned expenditures for the 12th Plan

Huge thrust on Transmission sector, expected to increase further to USD 40 Bn in 13th Plan

Huge thrust on Transmission sector, expected to increase further to USD 40 Bn in 13th Plan

Clear thrust on T&D sector reflected in the increasing plan expenditure on T&D

Clear thrust on T&D sector reflected in the increasing plan expenditure on T&D

Xth Plan registered maximum growth in terms of capacity addition through 400 kV lines (backbone of transmission infrastructure in India)

*Peak Deficit

High Growth Industry

Source: CEA

• India has huge power deficits with peak deficits in range of 10.6%* in FY2012

• An expenditure of around USD 247 bn has been planned for the Indian power sector in the 12th five year plan (2013-17)

• Of this, about USD 36 Bn Investments planned in the power transmission in 12th five year plan

• Open access and power trading will ensure need of greater investment

• Significant investment will come from private sector

• About ~29% of this investment ~ USD 10.50 Bn anticipated from private sector

Investment of USD 36 bn is expected in transmission sector over FY13-17

Huge Investment planned in the Indian transmission space, very attractive growth opportunities

Planned Expenditure ( FY 13 – 17) Cost (USD bn)

Central Sector- Power Grid Corporation (PGCIL) 20.0

State Sector- Expected to be executed by State Funding 5.5

State Sector- Expected to be executed by Private Sector * 5.5

Private Sector 5.0

Sub Total Private Sector 10.5

Total 36.0

1US$= Rs.50

Source: CEA, Planning Commission Working Committee Report, Analyst Reports

Page 10

Government Policies point to huge thrust to transmission sector

9 High Capacity Power Transmission Corridors at a

CAPEX of USD 12 bn

Government program to bring down AT&C loss

and revamp transmission lines with outlay of USD

10 bn in XI th plan

Boost due to open access and power trading

Aggressive generation targets coupled with inadequate

investments in transmission

Rural electrification Program of Government with outlay of

USD 5.6 bn in XI th plan

Poised for high growth and offering huge potential for

private players

RGGVY : Rajeev Gandhi Grameen Vidutikaran Yojana (Rural electrification program), R-APDR : Restructured Accelerated Power Development and Reforms Programme, HCPTC- High Capacity Power Transmission Corridors

Sterlite Technologies Presence in Private Transmission Sector

ENICL

JTCL

BDTCL

JTCLBDTCLENICL

CoD by Mar 2013CoD by Jan

2013

CoD by Mar 2014

CoD by Mar 2014

CoD by Mar 2014

CoD by Mar 2014

Map – Sterlite’s Projects

Private and confidential

Sterlite has emerged to be one of the most competitive and competent private sector transmission company

• Sterlite has emerged to be one of the top private sector transmission companies in India. The company has already bagged three (3) out of eight (8) IPTC projects with a total value of INR 4000 crores.

• The project entails about 2,200 km of transmission lines and 2 sub-stations.

• Details of projects executed by Sterlite Technologies

• Source: CERC, Adoption of tariffs

S.No. Name of the project ENICL (Project 1) BDTCL (Project 2) JTCL (Project 3)1) Date of Award 7-Jan-10 31-Jan-11 19-Jan-112) Zero Date (Start date of Project) 31-Mar-10 31-Mar-11 31-Mar-113) Construction Period (in years) 3 3 34) Expected date of completion 31-Mar-13 31-Mar-14 31-Mar-145) Line Length (in kms) 450 1000 6006) Sub stations None 2 None7) Region / States covered 1) Assam

2) Bihar 3) West Bengal

1) Maharashtra2) Gujarat3) Madhya Pradesh

1) Madhya Pradesh2) Chhatisgarh

8) Estimated Project Cost including IDC (Rs. In crores) 1000 1700 1200

9) Current status

Engineering & Innovation

In house tower design for BDTCL & JTCL project.1.Our towers are on an average 10% lighter than industry Benchmarks.

2.Our BDTCL towers are user friendly for site erection, this will save one month construction period

Usage of Helicopter for detailed Line Survey 1.Resulting in most optimum Tower Spotting and Route utilization.2. All key construction constraints are known up front.

Future InnovationUsage of helicopter in Tower erection and stringing in critical areasUsage of high resolution satellite imageries for Tender survey

Innovative approach in forest (statutory) clearances.It has been taken up with structured approach from day 1. As a result, expected clearance is 6 months prior to conventional time line.

Sub station foot print reduced resulting in reduced costs.

Value Chain in Grid Business

Simplest Business Model within all asset classes of Infrastructure.

Create collaborative eco system among various Stake holders

In order to achieve faster growth,improved productivity & more efficient usage of resources it is essential that a more trusting relationship is built & created among different stake holders.

Between Developers and Regulators.

Between Developers and Planning bodies like CEA & CTU.

Between Developers and EPC Contractor & Suppliers for transmission sector.

1) Collaborative approach in project award and execution. We need to move away from the culture of creating defenses by buyers and sellers to a more cooperative model which reduces the total risk being assessed by buyer and supplier. NGC procurement model is an established example in this regard.

2) Long term relationship instead of project based tendering in each instance. This will lead to lower cost of procurement for buyer and sellers will have assurance of better planning.

3) Sellers offering and organizing long term credit. Private sector developer will be looking for cheaper funds and lower involvement of fund and equity. Suppliers can help on this aspect.

Create collaborative eco system among various Stake holders

4) Following the telecom model we need to develop a model where the payment for the goods & services is spread over a longer period involving both construction and operation.

Longer the payment during opex better it will be for developers.

5) Developers and goods & service providers also need to work closely with planners to bring more innovation solution on board to make the most optimize use of natural resources.

As a private sector developer we want to see a paradigm shift in the way business is done so far.

Create collaborative eco system among various Stake holders

Thank you