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Distributed Energy
Listed Company – Chemical Factory

Listed Company – Chemical Factory

Puducherry, India.2020

16.5 %

IRR

7 years

Break Even Period

2.6 X

Target total return

20 years

Target investment period

Listed Company – Chemical Factory

Puducherry, India.2020

16.5 %

IRR

7 years

Break Even Period

2.6 X

Target total return

20 years

Target investment period

Chemical Factory – Energy Customer Profile

The Energy Customer is one of the first major chemical organisations in India to introduce and implement innovative technologies successfully and stay at the forefront of the industry. They have a number of ‘firsts’ to its credit, and has received numerous awards and recognition. The sustainability initiatives, health, environment and safety measures implemented at this plant have been well ahead of the curve in India and this particular plant has been accredited as the Greenest Plant in the Industry.

The proposed project is for powering the Energy Customers plant in Puducherry, India using a ground-mounted solar system, off-setting the use of power from the grid and reducing the energy paid to the electricity board. Based on the proposed installation capacity, the system cost is $3,000,000. Based on the site visit, installation capacity is 5000 kW. Distributed Energy provides the Energy Customer the option of BOOT Model. Under this plan, we will install the solar system at the Customer’s premises. The lease duration is 20 years and cost per unit is $0.07 without change for the full lease period and the annual energy generation from the solar system is 7,756,250 units.

Power Purchase Agreement

How do distributions work?

In terms of monthly payment, the Energy Customer is only charged on the basis of power produced. Under our current Power Purchase Agreement (PPA), parties involved agree to a lease for the full PPA period on a non-chargeable basis and also an O&M contract with Distributed Energy. The lease period is 20 years and the degradation of the asset is 1% per annum – beyond the lease period, the project will be transferred to the Customer at a mutually agreed residual cost. The total investment percentage by the Energy Customer is nil. Ownership of the project is Investor via Distributed Energy. The maximum investment amount is $3,000,000.

 

Once the solution design is approved and arrangement of finance is finalised, the procurement of materials is initiated, followed by installation and commissioning of the project. A detailed timeline showcasing the breakdown of milestones and deadlines will be provided to the relevant parties.

What fees will I be paying to Distributed Energy?

Distributed Energy share, including O&M fees, is 20% of revenue generated monthly.

 

Location

Why Invest?

The proposed project has a 16.5% return on investment with a target total return of 2.6x and break-even period of 7 years. Since their inception in 1985, the Energy Customer has established a strong market position, maintains a high net working capital, and has expanded its services to various parts of India. As the Investor, you shall be the owner through us of the solar asset for the PPA period and reserve the right to hypothecate the asset if necessary.

From a clean energy mobilisation perspective, the implementation of this solar plant will not only reduce the Energy Customer’s carbon footprint, but the percentage savings the Energy Customer will be making over time as a result of this project implementation are substantial. Additionally, this solar installation falls in line with the Customers long-term sustainability goals of adopting green technology for running its its day-to-day operations.

Investment Profile

Hypothetical Investment

$

Total Returned

$

*Note : All calculations and data presented are deemed to be accurate, but accuracy is not guaranteed. The projected pro forma IRR are intended for the purpose of illustrative projections to facilitate analysis and are not guaranteed by Distributed Energy or its affiliates and subsidiaries. Actual returns on investment may vary depending on tax, insurance and other increments.

Distributed Energy