Press Release BLP Wind Project (Amberi) Private …

1 1 CARE ratings limited Press Release BLP wind Project ( amberi ) Private limited January 30, 2018 Rating Facilities Amount (Rs. crore) Rating1 Rating action Long-term Bank Facilities (reduced from crore) CARE BBB+; Stable [Triple B Plus; Outlook: Stable] Reaffirmed Total Facilities (Rs. Seventy eight crore and fifty eight lakhs only) Details of instruments/facilities in Annexure-1 Detailed Rationale & Key Rating Drivers The rating assigned to the long-term bank facilities of BLP wind Project ( amberi ) Private limited (BAPL) continues to derive comfort from experienced and resourceful promoter, Enel Green Power Spa (EGP, subsidiary of Enel ) providing access to technical and financial strength of Enel to Indian subsidiary and satisfactory operational performance of the plant with energy generation track record of more than 5 years for both the projects, viz.

2 amberi & Jath. The rating continues to factors in long-term off-take arrangement in the form of Power Purchase Agreements (PPAs) signed with Maharashtra State Electricity Distribution Company limited (MSEDCL) at fixed tariffs, experienced Operations & Maintenance (O&M) contractor viz. Gamesa wind Turbines Pvt Ltd, moderately comfortable debt coverage indicators and presence of Debt Service Reserve Account (DSRA) equivalent to two quarters of debt obligations. The rating is, however, constrained by vulnerability of the operating performance to climatic conditions and variations in wind speeds, delays in receipt of payments from the single off-taker, MSEDCL and moderately leveraged capital structure. Going forward, achievement of power generation at the envisaged levels, timely receipt of payments from the off-taker and timely and sufficient and timely support from the promoter shall be the key rating sensitivities.

3 Detailed description of the key rating drivers Key Rating Strengths Experienced & Resourceful Promoters: BAPL is a wholly owned subsidiary of BLP Energy Pvt Ltd (BEPL) which is majorly held by EGP, an Italian multinational renewable company, with a very strong presence in renewable energy globally (installed capacity of GW as on December 2017 including GW in the wind energy segment). During FY18, EGP increased its shareholding in BEPL to from 68% by infusing additional money of around crore. Remaining shareholding continues to remain with BLP ( , a wholly owned subsidiary of Bharat Light & Power Group Pte Ltd (BLPG), Singapore). Enel Spa is a multinational energy company spread across 37 countries and 5 continents with net installed capacity of around 84 GW (portfolio spanning across hydro, wind , geothermal, solar, thermoelectric, nuclear and other renewable sources) and distributing electricity & gas across a network spanning about million km.

4 Being a majority stakeholder, EGP is also having majority representation on the board of BEPL. Satisfactory operational performance of more than 5 years: The entire capacity of MW has an operational track record of more than 5 years now. Net PLF during FY17 stood at ( in FY16 and in FY15), which was higher than the weighted average P-90 PLF for the entire capacity. Net PLF during 8 MFY18 stood at as compared to during 8 MFY17. Generation levels during 8 MFY18 were relatively lower on account of shut down of 2 WTGs for four months (July 2017 October 2017) at amberi location and relatively lower wind availability at Jath location. The issue pertaining to amberi location has since been resolved and the plant is running satisfactory since then. 1 Complete definition of the ratings assigned are available at and other CARE publications 2 CARE ratings limited Press Release Long-term PPA: The company is supplying entire power under long-term PPAs to MSEDCL for a period of 13 years at a weighted average tariff of Presence of long term PPAs (valid till April 2025-June 2025) with MSEDCL at a fixed tariff provides long-term revenue visibility.

5 As per the terms of PPAs, MSEDCL has to make payment to the company within 60 days from the receipt of invoice. However, there have been significant delays in payments by MSEDCL over the last 2 years. Moderate financial risk profile, however, DSRA of 2 quarters and promoter support provides liquidity comfort: During FY17, the company reported TOI of crore, net loss of crore and GCA of crore as against TOI of crore, net loss of crore and GCA of crore. The improvement was majorly on account of higher PLF for FY17. Interest coverage ratio stood at in FY17 as against in FY16. Overall gearing ratio increased marginally and stood at as on March 31, 2017 as against as on March 31, 2016 on account of increase in unsecured loans from promoters. For H1FY18, the company reported TOI of crore and PAT of crore. The promoters continue to support the company by infusing unsecured loans ( crore infused in FY17) to take care of the mismatch in cash flows owing to delay in payments by MSEDCL.

6 As on December 31, 2017, outstanding unsecured loans stood at around crore. The company continues to maintain a debt service reserve account (DSRA) comprising 2 quarters of interest and principal repayments which provide liquidity cushion. Key Rating Weaknesses Relatively weak credit profile of the off-taker: MSEDCL, the sole off-taker, has a relatively weak credit profile. There have been significant delays in payments by MSEDCL over the last 2 years. Total outstanding receivables of BAPL as on September 30, 2017 stood at crore (as against crore as on March 31, 2017 and crore as on March 31, 2016). The payments receipt status from MSEDCL remains irregular with last payment received in April 2017 for amberi Project (for invoice raised for the month of August 2016) and July 2017 for Jath Project (for invoice raised for the month of November 2016).

7 Going forward, improvement in the collection period would be a key rating monitorable. Nevertheless, the state of Maharashtra joined the UDAY scheme in October 2016 and has issued bonds of ,960 crore till January 9, 2018 as against total of ,613 crore bonds to be issued under UDAY scheme. Accordingly, it is likely to derive benefits in terms of reduction in interest cost thus improving the payment pattern, going forward. Dependence on climatic conditions and wind density: The Project is exposed to inherent risks of weather fluctuations leading to variations in wind patterns which can affect the PLF; thus, the achievement of desired PLF levels would be crucial going forward. Analytical approach: Standalone Applicable Criteria CARE s methodology for Infrastructure sector ratings CARE s methodology for Private power producers Rating Methodology: Factoring Linkages in ratings Criteria on assigning Outlook to Credit ratings Financial ratios Non-financial sector CARE s Policy on Default Recognition About the Company BAPL, a special purpose vehicle (SPV), is a wholly owned subsidiary of BLP Energy Pvt Ltd which is majorly held by EGP (about stake), a clean energy company based out of Italy and Bharat Light & Power Private limited (BLP).

8 BAPL has set up MW wind power capacity in two locations in Maharashtra, viz, amberi village, Satara district (12 MW, MW) and Jath village, Sangli district ( MW, MW), as an Independent Power Producer (IPP). The capacities were commissioned in phases during March-June 2012 and the company has entered into PPAs for 13 years with MSEDCL for the entire capacity. While 12 wind Turbine Generators (WTGs) which were commissioned before March 31, 2012, have contracted a tariff of per kWh, the balance 15 WTGs have a tariff of per kWh, resulting in a weighted average tariff of per kWh. 3 CARE ratings limited Press Release The Project (both the locations) was completed at a cost of crore, funded through term debt of crore, unsecured loans of crore and equity of crore. Brief Financials (Rs. crore) FY16 (A) FY17 (A) Total operating income PBILDT PAT Overall gearing (times) Interest coverage (times) A: Audited Status of non-cooperation with previous CRA: Not Applicable Any other information: Not Applicable Rating History for last three years: Please refer Annexure-2 Note on complexity levels of the rated instrument: CARE has classified instruments rated by it on the basis of complexity.

9 This classification is available at Investors/market intermediaries/regulators or others are welcome to write to for any clarifications. Analyst Contact: Name: Mr Gautam Bafna Tel: 011-4533 3256 Mobile: +91-98914 93443 Email: **For detailed Rationale Report and subscription information, please contact us at About CARE ratings : CARE ratings commenced operations in April 1993 and over two decades, it has established itself as one of the leading credit rating agencies in India. CARE is registered with the Securities and Exchange Board of India (SEBI) and also recognized as an External Credit Assessment Institution (ECAI) by the Reserve Bank of India (RBI). CARE ratings is proud of its rightful place in the Indian capital market built around investor confidence. CARE ratings provides the entire spectrum of credit rating that helps the corporates to raise capital for their various requirements and assists the investors to form an informed investment decision based on the credit risk and their own risk-return expectations.

10 Our rating and grading service offerings leverage our domain and analytical expertise backed by the methodologies congruent with the international best practices. Disclaimer CARE s ratings are opinions on credit quality and are not recommendations to sanction, renew, disburse or recall the concerned bank facilities or to buy, sell or hold any security. CARE has based its ratings /outlooks on information obtained from sources believed by it to be accurate and reliable. CARE does not, however, guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. Most entities whose bank facilities/instruments are rated by CARE have paid a credit rating fee, based on the amount and type of bank facilities/instruments. In case of partnership/proprietary concerns, the rating /outlook assigned by CARE is based on the capital deployed by the partners/proprietor and the financial strength of the firm at present.