1. Tariff-based competitive bidding for procurement of 500 MW of solar power in Telangana Pre-bid Meeting 5 Sept 2014 Authorized Representative: TSSPDCL (Southern Power Distribution Company of Telangana Limited) Procurers: TSSPDCL and TSNPDCL

2. The purpose of this presentation is to provide a summary of the Bid Model for the Telangana solar tender. The model essentially revolves around a distributed generation format with projects connected at 33kV, 132 kV and 220 kV voltage levels. Bidders have to rely on the bid documents available on the website for all the terms and conditions applicable for the Bid. This presentation only provides a quick overview and is not comprehensive in nature. In the event of any discrepancy between this presentation and the bid documents, the bid documents will overrule this document. This presentation attempts to provide clarifications on some of the queries raised by the Bidders but Bidders should solely rely on the clarifications/amendments issued by the Authorized Representative on the eProcurement platform/website as the case may be

3. Brief Overview and Project Scope Project Location  Bidder is free to set up Projects anywhere in the State  Location/Project site can be changed until financial closure Project capacity Minimum2 MW at Delivery Voltage of 33 kV at 33/11kV substation Maximum200 MW (double circuit line) 220 kV Delivery Voltage at 220/132kV substation Project Capacity Limits defined at each voltage level and at each s/s category under Annexure D Interconnection Substation  A single Project shall be connected to a single Interconnection Substation  But any substation can have multiple projects connected to it depending on injection limits specified in the RfS  Bidder shall submit a List of Preferred Interconnection Substations (At least 1 and upto 5) where he intends to connect the entire Offered Capacity  Allocation (in order of bid parameter) shall be done in the order of the preference list  After issue of LOI, Interconnection Substation cannot be changed

4. Tariff, Evaluation and Payment Tariff Options (all tariffs for evaluation and payment shall be on Tariff Year basis) Tariff Year shall mean 365 days from COD and last Tariff Year shall end on expiry of PPA OptionEvaluationPayment Option 1 (Uniform Tariff) Bidder quotes a single Quoted Tariff uniformly applicable for the entire term of PPA Bid Parameter is Quoted Tariff Quoted Tariff shall be applicable for the entire term of the PPA Option 2 (Base tariff + Esc) Bidder quotes tariff for First Year and Escalation (>0%) to be applied on base tariff from year 2 till year 10 Year 10 tariff shall apply for year 11 till year 25 Bid Parameter is Levelized Tariff computed using CERC discount rate (will be notified on website 7 days prior to bid deadline) Tariff for first Tariff year shall be the quoted tariff Tariff for first tariff year shall be escalated by the escalation rate specified by the Bidder for each year and such escalated tariff shall be paid from year 2 till 10 Year 10 tariff shall be paid for years 11 till 25

5. Bid Parameter under both tariff options shall be computed –Under option 1, bid parameter is quoted tariff itself –Under option 2, bid parameter is levelized tariff computed based on quoted tariff (first year), escalation rates specified by Bidder and CERC notified discount rate All Bid parameters are ranked from lowest to highest and allocation shall start from Bidder with first rank i.e. lowest tariff. In case bid parameters for two bids is the same, then the bid corresponding to higher offered capacity will be given better rank Multiple Bids can be submitted by the Bidder. But allocation will happen in the stacking order of bid parameter only. Hence a bidder may have two positions in the ranking order Evaluation of Bids and allocation of Interconnection Substations (1/3) ILLUSTRATION Bidder#AB#CD#XY#PQ#AB#MN Bid Parameter3.4003.5003.8003.9004.100 Offered Capacity100 MW80 MW30 MW50 MW60 MW40 MW Tariff OptionOpt 2Opt 1 Opt 2 Opt 1 Rank123456

6. Evaluation of Bids and allocation of Interconnection Substations (2/3) First round of allocation Qualified Bidder with lowest rank will be allocated the most preferred Interconnection Substation from the List given by the Bidder and issued LOI for the Offered Capacity under the Financial Bid At any stage if available capacity at the preferred s/s is less than offered capacity, then –Bidder can develop projects at reduced capacity –Bidder can chose next preferred s/s from the List If available capacity at all preferred s/s in the list is less than offered capacity, then qualified bidder will be moved to second round of allocation Second round of allocation All bidders moved to second round will be again ranked in order of bid parameter Starting with lowest bidder in second round, qualified bidders will be invited to select any s/s from all the s/s where there is available capacity In second round, bidder may either opt for developing projects at the available capacity or withdraw from the process (EMD will be returned) Subsequent to finalization of Interconnection substations with qualified bidders, LOI will be issued

7. #AB#CD#XY#PQ#AB# MN Rank 1Rank 2Rank 3Rank 4Rank 5Rank 6 PalemNizamsagarPalemLingapurNizamsagarLingapur BhongirSrinagarNizamsagarFatehpur RamaramLingapur Haliya Bidder Feasible capacity of S/S Offered Capacity S/S allotted (allocated capacity) Available Capacity for subsequent allocation Rationale for allotment First Round of Allocation #AB120 (Palem)100MW Palem (100MW) 20 MWLowest Bidder #CD 80 (Nizamsagar) 80 MW Nizamsagar (80 MW) 0 MW1 st preferred s/s is available #XY50 (Lingapur)30 MW Lingapur (30 MW) 20 MW No sufficient capacity at 1 st and 2 nd preferred s/s Bidder opted for 3 rd s/s #PQ20 (Lingapur)50 MW Bidder not willing to set up at reduced capacity. Moved to second round # AB 0 (Nizamsagar 60 MW No s/s from List available in first round. Moved to second round # MN20 (Lingapur)40 MW Lingapur (20 MW) 0 MW Bidder opts for reduced capacity at preferred s/s In the second round of allocation #PQ followed by # AB will be invited to choose s/s from all available s/s. They can also opt to withdraw from the process without losing EMD ILLUSTRATION

8. Minimum Project Capacity2 MW at 33/11 KV substation Maximum Project Capacity200 MW on double circuit line at 220/132 kV substation TechnologyPV (technology agnostic within PV) EMD INR 10 Lakhs/MW of which INR 10,00,000 is through RTGS/DD and balance through BG (210 days from bid deadline) Processing FeeINR 1,00,000 for each Bid Performance Bank Guarantee INR 20 Lakhs/MW per Project in three BG (15%, 35% and 50%) valid for 18 months from signing of PPA (PBG to be submitted within 30 days of issue of LOI failing which EMD will be forfeited) Bid submission process eProcurement (http://tender.eprocurement.gov.in) Scanned copies of original documents to be uploaded. Hard Copies of EMD and processing fee to be sent before bid deadline Eligibility Technical Eligibility: Commercial and technically proven technologies to be adopted Networth: INR 2 crore/MW. Other: Consortium allowed but lead member should have more than 51% controlling stake. Technical partner not mandatory at RfS stage but equity share for such technical partner in the consortium is limited to 10% Tentative timelines Bid deadline: 26 Sept 2014 Completion of bid process: 23 Nov 2014

9. PPA basisAPERC standard PPA with relevant modifications Term of PPA25 years from COD Time period for commissioning10 months from signing of PPA Time period for financial closure and conditions subsequent 150 days from signing of PPA Networth infusion incase of SPV 30% of requirement before PPA execution and balance before financial closure Project location/siteCan be changed till financial closure Key obligations of developer Obtaining all consents and clearances Designing, financing, construction, owning and operating the power station Developing interconnection facilities till Interconnection point Operating and maintenance of power plant to conform to RLDC/SLDC/TSTRANSCO/IEGC norms CUF Norm – 25% No penalties for lower CUF Energy beyond 25% CUF will be billed at 50% of applicable tariff for that year Energy DispatchAll energy for DISCOMS’ exclusive benefit Payment terms Monthly bill payment. Rebate and Late payment interest provided Payment security is letter of credit

10. THANK YOU Authorized Representative: TSSPDCL