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.

1.	If Suzlon is going to operate WEG on behalf of proponents, any agreement has been done for that?
2.	In case of failure of project or any other accident, who would be responsible for it? Suzlon or proponents?
3.	What would be impact of negative environmental conditions of area upon project? What would be alternatives in that case?
4.	Does project owner had any kind of wind based energy business experience?
5.	How many skilled/unskilled people from surrounding area were employed at this project during commissioning and operation as mentioned in social well being section? 
6.	List of stakeholders and minutes of stakeholder meeting is not attached with PDD.
7.	Stakeholder consultation section is not clear in PDD.

From
Mahesh Pandya
Environmental Engineer
Paryavaran mitra
502, Raj Avenue, Bhaikakanagar road
Thaltej, Ahmedabad – 380059 India
Telefax - 079-26851321/1801

It is evident from the PDD that the values are consistent and it is definitely forged and cooked up values to show a non CDM project as a CDM project. What is this? DoE to check the Detailed Project Report and Feasibility Report which is submitted to the other agencies and Banks by Project owner and ensure that the values match with the DPR/FR  submitted to DoE also. After careful study of PDD it is found that DPR/FR is in different versions made and submitted with different purposes to different agencies which is totally unacceptable, illegal and unethical. PP/Consultant may show some undertaking letter from bank manager to DoE stating that both DPR’s are same. These kinds of letters should not be accepted and entertained by DoE. While collecting the DPR/FR from banks and other agencies, all DPR/FR pages should be counter signed by Banks and other agencies so that the real DPR/FR given to other parties by the PP/Consultant is same as the one submitted to DOE. In this particular project there is clear cut evidence that DPR/FR values are changed/ fabricated mischievously and intentionally. This must be probed fully. DOE must take a written undertaking from the PP/Consultant about the list of parties to whom this DPR/FR is submitted and for what purposes. Then DOE should cross check with all the parties and confirm that the same DPR/FR is submitted to all the parties correctly without any changes. DOE must not accept any reports and undertakings from PP/Consultant. DOE must make independent evaluation and use totally different parties without informing the PP or Consultant to cross check the facts. DOE to write to the party who prepared the DPR/FR which is submitted to the banks and other agencies and the same is verified against the one submitted to the DOE by PP/Consultant. This project is a fabricated and fake CDM project and must be rejected by the DOE right away. DOE should not support this kind of projects otherwise CDM EB should suspend this DOE for at least one year.