2. Hydropower Development in India 27 th July, 2006, New Delhi National Hydroelectric Power Corporation Ltd. Presentationby S.K. Garg Chairman & Managing Director

3. 2 INDIAN POWER SECTOR INSTALLED CAPACITY THERMAL = 83,272 MW (66 %) HYDRO = 32,726 MW (26 %) OTHERS = 10,091 MW (8 %) TOTAL = 1,26,089 MW ENERGY SHORTAGE = 9.3 % PEAK DEMAND SHORTAGE =12.8 % CAPTIVE GENERATION = 14,636 MW CONNECTED TO GRID PER CAPITA ELECTRICITY=606 kwh CONSUMPTION As on 30.06.2006 SOURCE: CEA

4. 3 PROJECTED POWER DEMAND IN INDIA (Ending XI Plan) SOURCE: CEA / MOP REQUIREMENT OF INSTALLED CAPACITY (Considering GDP growth of 8%) 2,06,000 MW EXISTING INSTALLED CAPACITY 1,26,089 MW (Hydro-32,726 MW) LIKELY ADDITION IN X PLAN 34,000 MW (Hydro-10,000 MW) LIKELY ADDITION IN XI PLAN62,000 MW (Hydro-15,000 MW)

5. 4 A) POTENTIAL ASSESSED BY CEA : 1,48,701 MW B)INSTALLED CAPACITY DEVELOPED: 32,726 MW C)UNDER DEVELOPMENT: 14,021 MW D)PUMPED STORAGE POTENTIAL: 94,000 MW E) SMALL HYDRO ( < 3 MW): 6,782 MW SOURCE: CEA HYDRO POWER IN INDIA As on 30.06.2006

6. 5 REGION-WISE HYDRO POTENTIAL IN TERMS OF INSTALLED CAPACITY (IN MW) SOURCE : CEA * Includes 5.25 MW in A&N Islands REGION POTENTIAL ASSESSESD POTENTIAL DEVELOPED BALANCE & UNDER DEV. Balance % NORTH EASTERN58971111357858 98 NORTHERN533951126242133 79 EASTERN1094924978452 77 WESTERN892868812047 23 SOUTHERN1645810968549033 TOTAL14870132726*115975 78 As on 30.06.2006

7. 6 INDIAN HYDRO SECTOR As on 30.06.2006 SOURCE: CEA SectorInstalled Capacity (MW) Central Sector 6172 (19%) State Sector 25448 (78%) Private Sector 1106 ( 3%) Total 32726

8. 7 HYDRO - THE PREFERRED OPTION ABUNDANT POTENTIAL AVAILABLE IN THE COUNTRY CAN LEAD TO ENERGY SECURITY IDEAL TO MEET PEAKING DEMAND IMPROVES SYSTEM STABILITY INFLATION FREE POWER ENVIRONMENT FRIENDLY OPENS AVENUES FOR SOCIO-ECONOMIC DEVELOPMENT OF REMOTE AREAS RENEWABLE SOURCE OF ENERGY COST EFFECTIVE HAS ADDITIONAL BENEFITS LIKE IRRIGATION, FLOOD CONTROL, TOURISM ETC.

9. 8 HISTORICAL REASONS FOR SLOW HYDRO DEVELOPMENT LONG GESTATION PERIOD TIME CONSUMING PROCESS FOR CLEARANCES MORE FOCUS ON THERMAL GENERATION HIGHLY CAPITAL INTENSIVE & ABSENCE OF COMMITED FUNDS HYDRO POTENTIAL LOCATED IN REMOTE AREAS POOR FINANCIAL HEALTH OF SEBs TECHNOLOGY CONSTRAINTS INTERSTATE DISPUTES AS WATER BEING A STATE SUBJECT

10. 9 ACCEPTED AS NATIONAL PRIORITY TO ARREST DECLINING HYDRO:THERMAL MIX RATIO, DESIRABLE BEING 40:60 EMPHASIS ON HUGE UNHARNESSED HYDRO POTENTIAL IN THE COUNTRY ESPECIALLY NORTH EASTERN REGION WHERE 98% IS STILL UNHARNESSED KEY POLICY INITIATIVES TO ACCELERATE HYDRO DEVELOPMENT RENEWED INTEREST OF INTERNATIONAL FUNDING AGENCIES TO SUPPORT HYDRO PROJECTS DUE TO FOCUSED ATTENTION ON HYDRO POWER DEVELOPMENT BY THE GOVERNMENT HYDROPOWER- THE REVIVAL

11. 10 IMPEDIMENTS IN HYDRO DEVELOPMENT ( Cont...) INFRASTRUCTURAL & ADMINISTRATIVE ISSUES  WATER IS A STATE SUBJECT  INTER-STATE DISPUTES  LAND ACQUISITION  INACCESSIBILITY OF THE PROJECT SITES  LAW & ORDER / MILITANCY PROBLEMS FINANCIAL ISSUES  SECTOR IS HIGHLY CAPITAL INTENSIVE  14% ROE NOT VERY ATTRACTIVE  ABSENCE OF LONG TENURE LOANS  HIGH RISK ELEMENT  ADVANCE AGAINST DEPRECIATION IS DISALLOWED  FOREIGN EXCHANGE RATE VARIATION NOT A PASS THRU IN TARIFF

12. 11  REHABILITATION & RESETTLEMENT  ENVIRONMENT & FOREST CLEARANCE ISSUES IN HYDRO DEVELOPMENT ISSUES IN HYDRO DEVELOPMENT (Cont.…) ENVIRONMENTAL ISSUES  PREPARATION OF BANKABLE DPRs  GEOLOGICAL UNCERTAINITIES  DEARTH OF COMPETENT CONTRACTING AGENCIES TECHNICAL ISSUES

13. 12 INFRASTRUCTURAL & ADMINISTRATIVE ISSUES  EFFORTS TO ARRIVE AT CONSENSUS FOR DECLARING “WATER” A CENTRAL SUBJECT FOR OPTIMUM UTILIZATION & DEVELOPMENT OF NATURAL RESOURCES. AT LEAST THE RUN OF THE RIVER SCHEMES BE DELINKED FROM STATE SUBJECT  INFRASTRUCTURE COST TO BE SHARED BY GOVERNMENT & DEVELOPER  SECURITY COST TO BE BORNE BY THE GOVERNMENT  12% FREE POWER PROVISION TO BE REVIEWED INITIATIVES REQUIRED IN THE HYDRO SECTOR (Cont.…)

14. 13 FINANCIAL ISSUES  LONG TENURE (20-25 YRS.) DEBT FINANCING TO BE MADE AVAILABLE  BENEFITS UNDER MEGA POWER POLICY TO BE MADE APPLICABLE TO PROJECTS OF CAPACITY 250 MW & ABOVE  INCREASE RATE OF RETURN ON EQUITY VIS-À-VIS THERMAL TO ACCOUNT FOR CAPITAL INTENSIVE NATURE, RISKS INVOLVED.  EARLY IMPLEMENTATION OF DIFFERENTIAL TARIFF FOR PEAK AND OFF- PEAK HOURS.  ADVANCE AGAINST DEPRECIATION TO BE CONTINUED  CONTINUE PASSING OF FOREIGN EXCHANGE RATE VARIATION THROUGH TARIFF  EXPLORE ORGANISATION WISE POOLED TARIFF CONCEPT INITIATIVES REQUIRED IN THE HYDRO SECTOR ( Cont...)

15. 14 INITIATIVES REQUIRED IN THE HYDRO SECTOR ENVIRONMENTAL ISSUES  SIMPLIFY LAND ACQUISITION PROCEDURE & AMENDMENT TO LAND ACQUISITION ACT FOR COMPULSORY ACQUISITION OF LAND IMMEDIATELY ON SANCTION OF THE PROJECT  DEFINED SOLUTIONS FOR RESETTLEMENT AND REHABILITATION ASPECTS INVOLVING GOVERNMENT, PROMOTERS, FUNDING INSTITUTIONS ETC MOEF CLEARANCE SHOULD BE FINAL AND BINDING TO STATES TECHNICAL ISSUES  PREPARATION OF BANKABLE DPRS THROUGH CAPABLE ORGANIZATIONS  CREATION OF REVOLVING FUND FOR PREPARATION OF DPRs  INDUCTION OF LATEST TECHNIQUES FOR SITE INVESTIGATION & ENGAGEMENT OF REPUTED CONSULTANTS FOR COMPLEX PROJECTS  TURNKEY EXECUTION ON MERIT THROUGH INTERNATIONALLY REPUTED CONTRACTING AGENCIES

16. 15 NHPC IN INDIAN HYDRO SECTOR NHPC IN INDIAN HYDRO SECTOR

17. 16PROFILE  POWER STATIONS UNDER OPERATION:10 Nos. (3,755 MW)  PROJECTS UNDER CONSTRUCTION:11 Nos. (5,623 MW)  X PLAN (2002-07) PROJECTS:05 Nos. (2,480 MW) ALREADY COMMISSIONED:03 Nos. (1,580 MW)  XI PLAN (2007-12) PROJECTS :16 Nos. (6297 MW)  XII PLAN (2012-17) PROJECTS :12 Nos. (12,080 MW)  LIKELY CAPACITY BY 2012:> 10,000 MW

18. 17 FINANCIAL HIGHLIGHTS  AUTHORISED CAPITAL: 15,000  PAID UP CAPITAL : 10,600  NET WORTH: 15,300  VALUE OF ASSETS : 23,700  TURNOVER : 1714  NET PROFIT : 743  DIVIDEND PAID (2005-06): 223 *  AVG. RATE OF BORROWING:6%  CREDIT RATING BY: ‘AAA’ FOR DOMESTIC Rs./ Cr. INTERNATIONAL AGENCIES & ‘BB+’ FOR INTERNATIONAL BORROWING * Interim Dividend of Rs 64 Crs paid (As on 31.03.2006)

19. 18 POWER STATIONS UNDER OPERATION S.No.Name of the Power Stations Installed Capacity (MW) Year of Comm. Tariff (P/Kwh) 1BAIRASIUL (HP)180198173 2LOKTAK (Manipur)1051983103 3SALAL (J&K)6901987 / 199663 4TANAKPUR (Uttaranchal)1201992115 5CHAMERA – I (HP)5401994130 6URI (J&K)4801997209 7RANGIT (Sikkim) 601999178 8CHAMERA-II (HP)3002004256 9DHAULIGANGA-I (Uttaranchal) 2802005183 TOTAL2755 JOINT VENTURE 10INDIRA SAGAR (MP)10002004 / 2005160 GRAND TOTAL3755

20. 19 X PLAN PROJECTS S. No Projects Installed Capacity (MW) Scheduled Year of Comm. Status 1.CHAMERA-II (HP)3002003-04 Commissioned 2.DHAULIGANGA (UA)2802005-06 3.DULHASTI (J&K)390Nov 06 Under construction 4.TEESTA-V (SIKKIM)510Feb 07 TOTAL1480 JOINT VENTURE 5.INDIRA SAGAR (MP)10002004-05Commissioned GRAND TOTAL2480 Plan Total Hydro Capacity Addition (MW) Capacity Addition By NHPC (MW) % share of NHPC X PLAN (2002 – 2007) 10,1742,480 24

21. 20 XI PLAN PROJECTS S. No ProjectsInstalled Capacity (MW) Scheduled Year of Comm. Status UNDER CONSTRUCTION 1SEWA-II (J&K)120May 08 Under Construction 2TEESTA L/D – III (WB)132Mar 08 3 PARBATI-II (HP) 800Sep 09 4TEESTA L/D – IV (WB)160Sep 09 5URI-II (J&K)240Nov 09 6CHAMERA-III (HP)231Aug 10 7 SUBANSIRI LOWER (Ar. P) 2000Sep 10 8PARBATI ST- III (HP)520Nov 10 SUB TOTAL4203 9OMKARESHWAR(JV) (MP) 520Feb 08Under construction Cont… Plan Total Hydro Capacity Addition (MW) Capacity Addition By NHPC (MW) % share of NHPC XI PLAN (2007- 12) 15,0206,29742

22. 21 S.No.Projects Installed Capacity (MW) Scheduled Year of Comm. Status NEW PROJECTS 10 NIMMO-BAZGO (J&K)45 2010-11 CCEA* cleared 11 CHUTAK (J&K)44 2010-11 12 KOTLI BHEL –IA (Uttaranchal) 195 2011-12 DPR submitted on 03.01.2006 13 KOTLI BHEL –IB (Uttaranchal) 320 2011-12 DPR submitted on 30.01.2006 14 KOTLI BHEL –II (Uttaranchal) 530 2011-12 DPR submitted on 30.03.2006 15 LAKHWAR VYASI (Uttaranchal) 420 2011-12 DPR submitted on 30.03.2006 16 BAV-II (Maharashtra) 20 2010-11 DPR submitted on 31.03.2006 GRAND TOTAL6297 XI PLAN PROJECTS * CCEA in meeting held on 02.06.2006 has cleared the project, sanction letter is awaited. Contd

23. 22 FUNDING PLAN Rs. in Cr. X PLAN (Estimated) XI PLAN (Estimated) TOTAL GBS5,52114,05119,572 IEBR *6,16333,54239,705 TOTAL11,68447,59359,277 * Internal & Extra Budget Resources (IEBR)

24. 23 RAJIV GANDHI GRAMEEN VIDYUTIKARAN YOJANA (RGGVY) NHPC HAS BEEN ENTRUSTED WITH RURAL ELECTRIFICATION WORKS UNDER RAJIV GANDHI GRAMEEN VIDYUTIKARAN YOJANA IN THE FOLLOWING AREAS WITH TOTAL ESTIMATED COST OF RS. 1550 CRORES:  PURULIA DISTRICT OF WEST BENGAL,  EAST CHAMPARAN, WEST CHAMPARAN, DARBHANGA, SITAMARHI, SHEOHAR & MADHUBANI DISTRICT OF BIHAR,  DURG, KAWARDHA, RAJNANDGAON, DHAMTARI, KANKER, RAIPUR & MAHASAMUND DISTRICT OF CHHATTISGARH  KATHUA, JAMMU, UDHAMPUR, KARGIL, SRINAGAR, BADGAM, LEH DISTRICT OF J&K  RAYAGADA, GANJAM, PHULBANI, BOUDH, PURI AND GAJAPATI DISTRICT OF ORISSA - NHPC SHALL GET AGENCY FEE AS 12 % OF THE SANCTIONED COST

25. 24 INDIA HAS HUGE HYDRO POTENTIAL PROVIDING AMPLE OPPORTUNITY FOR ALL THE PLAYERS. GOVERNMENT’S FOCUSED ATTENTION AND EXTRA THRUST TOWARDS HYDRO SECTOR MAY CONTINUE SO AS TO ACHIEVE THE DESIRED HYDRO:THERMAL MIX IN THE COMING YEARS.

26. 25 THANK YOU