1. Madhya Pradesh: Means Business
Power

2. Overview Overview Madhya Pradesh (MP) – State that means business
MP is the second largest State in the Country stretching over 308,000 sq kms.
The State is blessed with large mineral resources of coal, diamond, limestone, methane etc.
MP is among the top 4 states of the Country for industrial investments.
Economic Snapshot
Madhya Pradesh is emerging as a key growth center for the Country
Per capita GSDP USD 369**
Manufacturing sector USD 8.5 bn**
(Registered & Unregistered)
Gross state domestic product (GSDP) USD 23, Mn**
Average growth rate % per annum
Advantage MP
Madhya Pradesh has one of the upcoming industrial base in India
The State is centrally located
Investor friendly Government policies
Total electricity generation capacity , MW*
India’s first greenfield SEZ Indore SEZ
Industrial Centers
Power
Electricity generation capacity at present is 6, MW and estimated to rise to a surplus in
MP is rich in low grade coal suitable for power generation.
Potential of hydro-energy generation.
Installed power capacity (MP’s share)
Hydel Power Generation: MW*
Thermal Power Generation: 2,147.5 MW*
*Ministry of Power (powermin.nic.in)
**Source: Indiastat.com (as on 23 Feb 2006)

3. Enabling Infrastructure
The State is well connected with the rest of India with almost 425 trains passing through the State on a daily basis. Of these 175 trains pass through the State capital Bhopal alone.
MP IS CENTRALLY LOCATED AND WELL CONNECTED WITH ALL MAJOR CITIES IN INDIA
RAILWAY NETWORK
25 airstrips.**
Convenient air links from key Indian cities like Delhi & Mumbai to Bhopal, Jabalpur, Gwalior, Indore and Khajuraho.
5 operational airports.
Indore airport has the capability of handling international cargo.
An international airport proposed in Bhopal.
GWALIOR
AIRPORTS
KHAJURAHO
INDORE
BHOPAL
JABALPUR
The total length of roads spanning MP is 67,600 kms.**
National highways of 5,200 kms run through the State.*
18 National highways including trunk routes of Delhi-Mumbai, Delhi-Chennai, Delhi-Bangalore, Delhi- Hyderabad.
The total length of State highways in the State is 9,885 kms.**
Convenient linkages to western ports i.e. Kandla Port, Jawahar Nehru Port Trust.
ROAD NETWORK
*Source: Department of Road Transport & Shipping (morth.nic.in)
**Source:

4. Madhya Pradesh: A Preferred Investment Destination
31% of the State under forest cover with a largely unexploited species of rare, valuable medicinal- herbal plants
Over 2,000 kms of roads being developed with Private Partnership (BOT)
India’s 1st operational Greenfield SEZ at Indore
Offers diverse tourists destinations catering to various segments of tourism such as religious (Bhojpur), eco/ adventure (Panchmari), heritage (Sanchi, Khajuraho) tourism etc.
Over 100 agricultural farms with an area of over 20,000 acres is available on lease to investor
Third largest producer of cement in India*
Favourable climatic conditions for cotton and over 40,000 power-looms are driving the textile industry
Various blocks available for power, cement, iron and steel units
Largest producer of pulses and oilseeds in the Country (~75% of soyabean production)
Over 18,000 technical graduates and 230,000 graduates add to workforce each year
Availability of coal and natural gas (G.A.I.L pipeline) along with support from Government to make investment in Thermal Power Plants lucrative
Over 144 BCM of coal bed methane reserves available
12 blocks with reserves totalling 2,585 million tons of coal has been identified
*Source: & Brochure: MP Means Business

5. MP: The Right Place with the Right Environment
Savings in Office Space Rates
(A comparison of rates in Central Business Districts)
DESTINATION MADHYA PRADESH
Fastest mover* in overall performance among the big States in the Country.
(780 Kms)
Mumbai
(MPV )
(800 Kms)
Pune
(MPV )
(1400 Kms)
Bangalore
(MPV )
(1430 Kms)
Chennai
(MPV )
Hyderabad
(840 Kms)
(MPV )
Delhi
(740 Kms)
(MPV )
Ahmedabad
(570 Kms)
(MPV )
(1350 Kms)
Kolkata
(MPV )
Key Markets
(Distance From Bhopal)
MPV – Market Potential Value
Fastest mover in agriculture
Fastest mover in infrastructure development.
Bhopal and Indore have substantial cost advantages, even when compared to other Tier III and IV cities.
Savings in Land Cost
Ranks 2nd in terms of governance.
(Estimated Values for Multi-product SEZs)
Ranks 3rd in terms of law & order
Cost of skilled labour is USD 2.4/day vis-a-vis USD 3.5 – USD 4.0/day in metros
The cost of land is one of the lowest in the Country. Even central hubs such as Indore and Bhopal fare well against other cities in terms of low land cost.
MP is centrally located. The State is at an easy distance from all the key consumer markets in the Country.
* Fastest mover is the State where the rate of improvement between 2003 & 2006 was greater than that between 1991 & 2003
**Source: India Today (September ‘06 Issue)
Source: (Reference: RK Swamy)
- Distances rounded off

6. SPECIALIZED INFRASTRUCTURE
Industrial Policy: Catalyst for the Investments
The Government of MP has devised an investor friendly industrial policy, which is aimed at achieving global competitiveness. The policy emphasizes on industrial growth in the state through adopting cluster approach, establishing specialized infrastructure and offering favourable incentives.
The main thrust of this policy is:
Establishment of a Madhya Pradesh Trade and Investment Facilitation Corporation which would take decisions about rationalization of taxes, facilities of mega projects and other related matters.
Enacting an Industrial Facilitation Act and to change the rules of business with a view to make single window system decisive and result oriented.
Developing infrastructure for supporting the identified industrial clusters
Reviving closed down/ sick industrial units by granting special packages.
Attractive incentive schemes.
SPECIAL INCENTIVES
Special package for Mega Projects on project basis by apex level investment promotion empowered committee headed by the Chief Minister.
Industrial investment promotion assistance – 50% to 75% of commercial tax for 3-10 years
Concessional registration charges and stamp duty exemption for Term Loans.
Interest subsidy on term loan for 5 – 3% to 5%.
For thrust sector industries, 25% capital subsidy would be provided limiting up to a maximum of USD 56,000
Land on 75% concessive rate for Mega Projects limited to USD 4.4 million.
Entry tax exemption for 5 years.
5 years electricity duty exemption on captive power generation
15% capital subsidy to SSI up to USD 33,000 in backward areas
Infrastructure grant up to USD 0.22 million crore for developing private sector industrial parks
Partial reimbursement for Project report, ISO Certification, Patent and Technology Purchase cost
CLUSTER APPROACH
Indore – Pharmaceutical, Textile, Food Processing, IT, Auto Components
Bhopal – Engineering, Biotechnology, Herbal, IT, Food Processing
Jabalpur – Garment, Mineral, Forest & Herbal, Food Processing
Gwalior – Electronics, IT, FMCG, Engineering, Food Processing
Rewa – Refractories, Lime Stone, Forest Based
Sagar – Mineral Processing
Crystal IT Park
Indore
Food Parks
Mandsaur, Khargone, Chhindwara, Hoshagabad, Mandla and Bhind
Stone Park
Katni
Herbal Park
Rewa
Granite Park
Chhatarpur
Life Sciences Project
Bhopal
Apparel Park
Indore (SEZ)
Gems & Jewellery Park
SPECIALIZED INFRASTRUCTURE

7. Total units established
Doing Business Made Easy Through MPAKVN
In a bid to build a competitive environment; industries and their ancillaries would be promoted in clusters based on the availability of raw materials, skilled labour and market potential. Under this Industrial Policy through Madhya Pradesh Audyogik Kendra Vikas Nigam Ltd (MPAKVNs) scheme, the State Government, has identified industrial clusters. Many of the industrial giants have their establishments in these areas, however 44% of developed area is still untapped and open for investment.
Area Developed: 1,330 Hectares
Allotted: 618 Hectares
Units established: 286
Major Groups:HEG, Crompton Greaves, P&G, Godrej, Lupin, IFB, Oswal, Nahar
Special Infrastructure: ICD, Food Park
Area Developed: 2,262 Hectares
Allotted: 800 Hectares
Units established: 326
Major Groups: JK, Surya Roshini, Godrej, Grasim, Cadbury, Hotline, Crompton Greaves
Special Infrastructure: ICD, Food Park
Area Developed: 790 Hectares
Allotted: 125 Hectares
Units established: 52
Major Groups: Raymond, Hindustan Petroleum, PBM, Ayur
Special Infrastructure: Stone Park, Food Park
Area Developed: 273 Hectares
Allotted: 115 Hectares
Units established: 121
Major Groups: Birla, Jaypee
Special Infrastructure: Integrated infrastructure development centres (IIDC)
BHOPAL AKVN
GWALIOR AKVN
JABALPUR AKVN
REWA AKVN
Area Developed: 2,492 Hectares
Allotted: 1431 Hectares
Units established: 575
Major Groups: Tata, Ranbaxy, Eicher, Bridgestone, Hindustan Motors, Kinetic, SRF, S Kumars, Gajra, Nicholas Piramal, Indorama, IPCA, Bhilwara
Special Infrastructure: SEZ, Crystal IT Park, Food Park, Apparel Park
Malanpur, Malanpur Phase II, Banmore, Chainpura, Siddhgawan, Pratappura
Total developed area
7,147 Hectares
Total allotted area
3,089 Hectares
Total units established
1,360
Growth centres 19
Rewa, Waidhan
INDORE AKVN
Source:
Mandideep, Pillukhedi, Mandideep Phase II
Borgaon, Maneri, Purena
Pithampur, Kheda, Dewas, Maksi, Megh Nagar
Source: MPSIDC

8. Power Industry in Madhya Pradesh

9. Sector Profile: Power Power: Backbone of the Indian Economy
India’s Power Sector: Opportunities Abound
Key Policy Initiatives
M.P.: Power House of India
Location Analysis
Advantage M.P.
M.P.: An Investment Destination
Way Forward

10. Power : Backbone of Indian Economy
Energy Generation Bn KWh 2005
Fact Sheet
India’s power industry is growing faster as compared to most of the other countries. In the last decade with substantial capacity addition, India has moved to 5th rank from 8th in terms of generation capacity globally.
The country has installed generation capacity of 126 GW as on July 2006 , and a transmission & distribution network of more than 6.3 million circuit kms (2004).
India consumes about 3.7% of the world’s commercial energy and is ranked 5th largest consumer of energy in the world.
India’s power generation is largely coal dependent with 55% share in the total capacity mix.
With India’s booming economy and vibrant industrial scenario, per capita consumption of power had almost doubled from 350 units in 1998 to over 600 units in 2005 and is further expected to reach 1000 units in (source: IBEF)
With the targeted GDP growth rate of over 8%, energy demand is expected to grow at the rate of 5.2% annually. To support this the power supply of the country needs to be augmented by 10% annually.
The mismatch in energy demand and supply in the country had resulted in the increased energy shortage from 27 BU in 1995 to 80 BU in 2005.
Peak demand is expected to increase by 77% to 157,107 MW by Also the energy requirement is expected to increase by 274% to 975,222 MU by 2012.
Primary Energy Consumption
mtoe
3rd Largest Consumer in Terms of Energy Demand
Installed Capacity Mix
Source: IBEF Report, Ministry of Power (CEA)

11. India’s Power Sector - Opportunities Abound
2006
2012 MW MW
Projected Generation Capacity
Opportunities for Private Investors
The Government envisages to provide power to all the households under its ambitious plan “Electricity for all villages by 2007” and “ Power for all by 2012”. The mission aims at enhancing the installed capacity upto 200,000 MW by 2012, accompanied by an increase in transmission and distribution network.
The investment required in this regard in the sector is estimated to be over USD 200 bn. Almost 50% of this amount would be required for generation projects alone. The scale of investment required in power sector along with the need of advanced technical inputs, has carved out a significant role for private players in power sector.
Nearly 5000 MW has already been added by the private sector under the 10th five year plan. It is expected to contribute 11,912 MW during the 11th plan from
Government has initiated a string of reforms by enactment of Electricity Act, 2003 to attract foreign and private investment in the power sector. From allowing FDI upto 100% via the automatic route in all the segments (generation, transmission and retail distribution), to extending tax holiday for mega power projects, the government is keen to create an investor’s friendly environment.
Generation Share Mix
Generation Share Mix
Capacity Addition Plan Period
Given the projected demand scenario coupled with favorable investment policies, the sector offers huge opportunities for foreign and private players.
Source: Ministry of Power (CEA)

12. Key Policy Initiatives
Policy initiatives by GOI
100% FDI is allowed under the automatic approval route in all segments of the industry i.e generation (based on coal, gas, or hydro), transmission and retail distribution
Under the Mega Power Policy, incentives such as capital import duty concessions, waiver of local levies to improve cost attractiveness are extended to large generation projects.
All power projects are extended a tax holiday i.e deduction of 100% of profit of the generation, transmission or distribution company, for 10 consecutive years out of 15 years from commencement.
Key initiatives under the Electricity Act 2003
Generation other than for large hydro projects, is de-licensed
Open access on transmission and distribution networks
Retail competition mandates that by July 2008 all consumers above 1MW are free to choose their suppliers
For rural power development, generation and distribution is de-licensed in rural areas
Power trading and market development are recognized
Strong anti-theft and malpractice provisions
Functional unbundling of the integrated state electricity boards and setting up of State Electricity Regulatory Commission made mandatory by states.
Other policy initiatives
Competitive bidding for awarding projects
Incentives for mega power projects
Relaxation of 40% cap for debt exposure by Indian financial institutions
Inter institution group for speedy financing
Encouragement to FDI in transmission via Joint Venture route and Independent power Transmission Company Route
National Electricity Policy & National Tariff Policy notified
Initiation of Ultra Mega Projects

13. MP: The Power House of India
Overview:
M.P. has nearly 5% of the total installed capacity of India with MW as on July 2006 including the Central, State and private sector. The sources of power generation in the State includes thermal, hydel, wind power, methane gas etc.
The State’s share in the installed capacity was about MW in the year Out of which ~72% is thermal power and remaining is hydel power.
The total energy availability in the State has increased from 26,606 MUs to 29,237 MUs during to at a CAGR of 2.68%, wherein power purchase of the State has outgrown the own generation of the State.
The State is witnessing rapid industrialisation which would lead to very high increase in energy demand in coming years. Further, the installed capacity is also expected to increase in the coming years, with new projects coming in the State.
The State Government has taken necessary policy initiatives to facilitate the power sector reforms in the State.
Installed Capacity of Power in M.P. (M.P.’s share)
Energy Shortages & Peak Deficit in M.P.
The increasing energy shortages and peak deficit indicates a need for rapid increase in power generation capacity of the State. Further, the new Government reforms, and presence of necessary resources makes the power sector very attractive for the private investors to set-up their plants in the state.
Source: Annual Report (MPERC)- Tariff petition 2006, Ministry of Power

14. Category-wise Energy Consumption in M.P.
MP: Power House of India
Agriculture sector is one of the main energy consumers in the State. The HT consumers such as railway traction, coal mines, HT industrial and non-industrial activities etc. together accounted for 6549 MU of sales followed by domestic consumers in the year
The State has various organisations (mostly public undertakings) in the areas of power generation, transmission and distribution. These organisations are presented in the schematic below.
The Private sector has a very insignificant presence as of now with their major presence only in non-renewable resources and captive plants. However, various major companies are contemplating to set-up their units in M.P.
Category-wise Energy Consumption in M.P. *
* HT Consumers include traction, coal mines, industrial, irrigation, township, residential etc
Generation
Transmission
Distribution
PUBLIC SECTOR
Madhya Pradesh Power Generation Company Ltd (MPPGCL)
Narmada Hydro Development Corporation
PRIVATE SECTOR
MP Wind Farm, Dewas (wind power)
Kalani Industries, Indore (wind power)
Goetze India, Dewas (wind power)
Som Distilleries, Bhopal (biomass)
Kalchury Trading Co., Jabalpur (biomass)
Shri Maheshwar Hydro Power Corporation
Madhya Pradesh Power Transmission Corporation Ltd.
POWER PURCHASE
Madhya Pradesh Power Trading Company Ltd
POWER DISTRIBUTION
M.P.Poorva Kshetra Vidyut Vitaran Company Ltd.
M.P.Madhya Kshetra Vidyut Vitaran Company Ltd.
M.P.Pashchim Keshtra Vidyut Vitaran Company Ltd.
Source: Annual Report (MPERC)- Tariff petition 2006

15. Location Analysis The State has following power generation units:
Power Plant
Installed Capacity
(MW)
MP’s Share
Locations
MPPGCL Thermal Power Plant
2272.5
2147.5
3 major plants located in Satpura, Amarkantak and Umaria where vast coal reserves are available.
MPPGCL Hydel Power Plant
575
8-10 plants are located near Pench, Banas, Gandhi Sagar and other rivers.
Intrastate Project
591
322.17
Gandhi Sagar, Ranapratap & Jawahar Sagar, Rajghat, Pench
Joint Venture Project
2450
1826.5
Indira Sagar & Sardar Sarovar
Non-Conventional Energy Plants
26.7 -
Small wind power, biomass based plants are set-up in Dewas, Indore, Bhopal etc
Power Generation Stations in M.P.
Classified Regions in M.P.
Energy Sales
No. of Customers
Growth Drivers in the Region
West Discom (Indore, Ujjain)
MkWh
2.40 million
The Discom contributes to highest energy sales in M.P. This is due to the highly developed and growing industry in and around Indore region. Further the establishment of SEZ would also contribute to sales.
East Discom (Jabalpur, Rewa, Sagar)
MkWh
1.82 million
Presence of number of cement and cable factories in the region leads to high energy sales.
Central Discom (Bhopal, Gwalior)
5484 MkWh
2.32 million
The domestic consumption and small scale industries drives the sales in this region.

16. Advantage MP M.P. Offers following Advantages to Power Industry
Centrally located and well connected to all the major cities
Accounts for ~ 8% of national coal reserve i.e. 18,205 million tons
Availability of coal bed methane reserves of approximately 144 bn cubic meters
Large rivers flowing across the State gives ample potential for hydel power generation
Potential to be Energy Hub for Power Generation
Established Infrastructure
Well connected through roads and railway
Availability of vast contiguous land for setting up big plants
Extensive power distribution and transmission network with about 185 sub-stations
Transmission network of about 19,817.7 Ckt Km
Government Support
Key incentives for private players establishing plant in the state, based on non-conventional energy resources like wind, bio and solar energy and mini micro hydel projects
Restructured power sector in accordance with the provisions of the Electricity Act 2003
MP Electricity Regulatory Commission (MPERC), has laid down the tariff plan for next 3 years

17. Energy Demand Projections in MP Government Initiatives
MP: An Investment Destination
With the growing industrialisation in the State along with the Rural Electrification Programme initiated by the Government, the demand for electricity would increase manifolds in the State.
Industry Drivers in M.P.
Energy Demand Projections in MP
The demand for energy in the State is estimated to increase by 45% by the year
M.P. is likely to face the energy deficit in the next five years and its energy deficit in is expected to be as high as 10.5% (source: MPSEB)
The natural resources available in M.P such as thermal, hydel, wind power and coal bed methane has the potential to generate MW of power in next 5-10 years.
An increase of 45% is projected by
Government Initiatives
The thermal and hydel power plants set-up in the State will receive incentives from the Central as well as State Government (mentioned in prior slide).
The State Government offers various incentives for organisations installing power generation unit utilising non-conventional feed stocks. These incentives include electricity duty exemption, sales tax benefits, land incentives etc. These investors have the option of using the power themselves as captive power and selling it to the USD 0.05 per unit (source: MPERC)
Government also provides incentives for setting-up captive plants in the State.

18. Up-Coming Projects In M.P. (Indicative) Ultra Mega Project in M.P.
MP: An Investment Destination
Major private players such as Reliance, Essar and Jaypee Group have acknowledged the potential of M.P. and have proposed investment plans in the State.
Up-Coming Projects In M.P. (Indicative)
Thermal Power Projects
Malwa TPS,
Purni, Dist. Khandwa
2X500 MW
Essar Group Project,
Mahan coal field at Sidhi-Singrauli fields
1000MW
Jaypee Group
Siddhi
1000 MW
Hydel Power Projects
Marhikheda hydro project, extension,
Shivpuri.
1x20 MW
Tawa HEP (M/s Hindustan Electro Graphite)
Hoshangabad
13.5 MW
Coal Bed Methane
Reliance Energy
Shahdol -
Ultra Mega Project in M.P.
The central government is setting up Ultra Mega Power Projects 5 locations in the country.
The project is first initiated in MP and is at an advanced stage of establishment.
Sasan in M.P., a pithead location based on domestic coal availability (while other proposed plants would be imported fuel based) is identified for setting up this project.
It is a large project of 4000 MW at a single location thereby ensuring economies of scale.
Project would require an investment of about USD 3.3 billion.
The project would utilize super critical technology to ensure higher efficiency and lower CO2 emissions
The projects would be awarded to developer through tariff based competitive bidding to ensure cheaper power.

19. Opportunities across the value-chain Power Trading & Distribution
MP: Way Forward
With the increasing demand for power in the State and State’s objective to provide power to all by the year 2008, there lies several opportunities for public-private partnership in the sector.
Opportunities across the value-chain
Power Transmission
Power Trading & Distribution
Power Generation
Power generation plants based on:
Coal reserves
Hydel power
Biomass
Coal bed methane
Wind
The Transmission could be taken through Joint Venture or Independent Private Transmission Company (ITPC) route.
400 KV Bina-Nagda-Dehgam D/C line in Western Region has been taken up as a pilot project by POWERGRID and would be awarded to private party soon.
This activity could be taken independently or under joint venture by private players under public-private partnership in the State.

20. Connecting Further Madhya Pradesh State Electricity Board
Madhya Pradesh Electricity Regulatory Commission
www.
Madhya Pradesh Power Transmission Corporation Ltd.
Madhya Pradesh Paschim Kshetra Vidyut Vitran Company Ltd.
Madhya Pradesh Madhya Kshetra Vidyut Vitran Company Ltd.
Madhya Pradesh Poorv Kshetra Vidyut Vitran Company Ltd.
Madhya Pradesh Urja Vikas Nigam Ltd.
Madhya Pradesh State Industrial Development Corporation
Government of Madhya Pradesh