1.	The calculation of project IRR is not as per “Guidance on the Assessment of Investment Analysis’ Version 03, EB 51, Annex 58”.
2.	Whether pre-tax or post tax IRR is selected is not demonstrated in the PDD.
3.	The basis of calculation of benchmark is not documented in the section B.5. PLR is not acceptable benchmark for the project. WACC based on Government bonds, risk premiums should be taken.
4.	The service tax rate of 10.3% is not clear. Pls. clarify.
5.	Derating factor, array efficiency of the wind energy system is not depicted in the PDD. Pls. clarify. 
6.	Debt/Equity ratio should be based on recent investment done by the Project proponent. 
7.	DOE has to check the chronology of events, no purchase order details, investment decision date.
8.	Prior consideration of CDM which is important for the determination of additionality is not documented in the section B.5 of the PDD.  
9.	The justification of choosing EIRR as financial indicator is not adequately justified. Whether it is equity or project EIRR, pre-tax or post tax is not mentioned in the PDD. 
10.	The emission factor for the project electricity system can be calculated either for grid power plants only or, as an option, can include off-grid power plants.
11.	Justification of parameters including O&M, insurance, loan, derating, escalation, and tariff are not demonstrated with justification. Refer B.5.
12.	Please provide a proof for proposed debt to equity taken at the investment decision. Refer B.5 
13.	Proof for PLF is not justified. 
14.	Date of offer is not provided  
15.	Project cost is not as per state norms. Refer B.5.
16.	O&M charges and its escalation is not as per  norms 
17.	IT rate assumed is not as per standard practice. 
18.	The application of MAT which is based on tax holiday while calculating WACC is not appropriate. 
19.	The PP has not explained and justified the key assumptions and rationale.
20.	The PP and consultant has not Illustrate in a transparent manner all data used to determine the baseline emissions.
21.	Not demonstrated that the proposed project activity is additional as per options provided under attachment A to Appendix B of the simplified modalities and procedures for small-scale CDM project activities.
22.	National policies and circumstances relevant to the baseline of the proposed project activity are not being summarized clarify.
23.	Explain and justify all relevant methodological choices for the proposed project activity
24.	Prior consideration of CDM which is important for the determination of additionality is not documented in the section B.5 of the PDD.  
25.	Date of PPA is not mentioned in the prior consideration of CDM 
26.	The selection of simple OM based on low cost/must run resources is not adequately justified. Refer B.6.1
27.	PP has not provided for each parameter the chosen value or, where relevant, the qualitative information.
28.	Please Provide the actual value applied. Where time series of data is used, where several measurements are undertaken or where surveys have been conducted, provide detailed information.

The PP states that they have considered 80% accelerated depreciation. However the PDD is silent on the tax shielding as a result from accelerated depreciation.
PPs cleverly do not consider the accounting tax offsetting in their companies while calculating the IRR. This is evident from the recently registered projects and those requesting registration.  

The DOE is therefore requested to critically analyze how the accelerated depreciation benefit has been taken into account and confirm the accounting of the cash inflows as a result of the negative tax liability in the initial years. DOE should not be misguided by the financial presented by the PP or consultant which are custom made for CDM purposes and not the actual financial considered at the investment decision.
Note that considering cash inflows results in an increase in the IRR making wind projects a profitable venture.

Please also check the offer from WTG supplier and Purchase Order while validating the PLF. It may be so that the third party report which is made after investment decision making - indicates a lower PLF.
The PLF seems to be very low. Also check the tariff order.


Benchmark: 
No details are provided on the beta estimation. Is the beta levered or unlevered and what is the reason?? How is the beta appropriate for irr chosen?

Stakeholder consultation:
No details provided on which all stakeholders attended the meeting. 

Benchmark:
The benchmark is too high. Even after considering CDM benefits the IRR will not cross the benchmark. Then WHY did the PP go ahead with this non-profitable venture??
This clearly indicates the benchmark is made high just to prove additionality and is not the real benchmark expected by the PP.

Why has the PP considered Reliance Infrastructure Ltd for beta determination when Reliance Infrastructure Ltd. has many other businesses other than pure power generation? How come the risk profile of Reliance Infrastructure Ltd match with the project activity which involves wind electricity generation?

What is the vintage considered for beta determination? Is considering only one year appropriate?
Why tax computations for beta are only considered for one year?? What is the basis for considering a particular vintage for the market returns, beta estimation and risk free returns?

Why the particular index is considered for calculating the market returns? DOE to evaluate whether the PP has made any other investments considering the same index. Only because a particular index results in a higher benchmark??

Project cost seems to be very high. Are the quotations real or fabricated?

Are REC benefits being claimed? How will the DOE ensure that the PP does not claim REC benefits during project operation?

DOE to submit a negative opinion in case the IRR does not cross the benchmark even after considering CDM benefits as it clearly indicates the projects unviability in any case. Why would any one invest in a loss making venture? 

And if the PP can still go ahead with the project - it indicates that the benchmark is fabricated and is not considered by the PP while making the investment decision!! DOE to validate this critically!! How are the investment decisions really made???

DOE to check if the financials correctly apply the 10 year tax holiday - i.e. not liable for taxes for 10 years from the initial 15 years.

when the project is funded by both equity and loan, the appropriate bench mark would be PROJECT IRR and not EQUITY IRR