It is not known how the PP considers equity IRR is appropriate financial indicator, when the project is financed only 40% by equity. Moreover, PDD states IRR is one of the known financial indicators used by banks, lending institutions and project developers for decision making. Can the PP explain whether the banks and financial institutions use project IRR or equity IRR?  This financial indicator has been used to make the project additional as the benchmark has been fixed at 17%. DOE should insist on project IRR only. Since the benchmark for equity IRR has been given, computing WACC is easier. 

While the PLF assumed for Gujarat and Maharashtra projects are appropriate, for windmills located in Tamil Nadu, PP has assumed PLF of only 22.07%; TNERC has recommended 27.15%. The windmills are located in Tirunelveli district, where the windmills achieve PLF of more than 28%. DOE should check other webhosted projects from this district, verification reports and actual PLF achieved by the project since the commencement of operation. PLF should not be less than 27.15% or the actual PLF achieved whichever is higher.

O&M cost given for Gujarat project is very high. There are so many projects webhosted and registered with Vestas windmill and none of them have assumed such a high O&M cost. However, the O&M cost given for Maharashtra project is low, if the O&M cost of other projects are considered as standards. DOE should check other projects and the O&M agreement before accepting the O&M cost.

These projects are eligible for 100% depreciation and tax holiday for 10 years. Tax savings due to depreciation should be taken into account in calculating the IRR. 

The project’s start date is 22/07/2010 and 31/08/2010. Therefore, it should have started operation before March 2011. Hence, the investment will be in the same year as the start of operation. DOE should deduct the investment from the cash generation of the first year in computing IRR. 

For common practice analysis, it is not clear why the similar projects should be those with an installed capacity of more than 30 MW. Can PP explain how projects having an installed capacity of 30 MW are different from others? Common practice analysis does not give any information on Maharashtra and Gujarat projects, which is not correct. Only CDM projects are given in the annexure. PP should give all wind power projects and then can remove them based on the period of installation, size etc. But giving only CDM projects and stating that all projects are CDM projects is factually incorrect.