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. PP may show taxation with the logic of cumulative losses - which is totally incorrect!!

•	The IRR does not explain the basis taken for project cost?. 
•	Also the chronology of events do not mention any offer letter?.. Then how DoE has made due diligence that the project confirms to UNFCCC guidelines?. 
•	There are neither links nor documents mentioned for proof of the parameters assumed for the IRR? 
•	How is PLF estimated to be in accordance to UNFCCC guidelines. 
•	Also the tariff rate has been assumed based on rate existing at investment decision..but does it account for the escalation and why it has been assumed at a flat rate?..
•	market returns have been estimated from BSE – 500 available from 1979??..how is this possible as BSE-500 existed only recently from 2000? 
•	How is it evidenced that project is 100% equity?...have financial reports or chartered accountant approval to confirm same reviewed by DoE?
•	Not clear whether Board  resolution is for 2 WTGs or single WTG?...then what basis the IRR is calculated separately for two WTGs…it is clear that neither the consultant nor the DoE have grasped the CDM fundamentals…especially for additioanlity..which proves that it is a non-CDM project.