4 rviArarrEPt MASTER GREEN ENERGY LTD. Lahore Office: 82 —C -1, Gulberg Ill, Lahore. Tel: +92-42-35752620-22, +92-42-35758524-26 UAN: +92-42-111-666-555, Fax: +92-42-35751905 MGEL/NEPRA/TARIFF/005 May 16, 2017 The Registrar, National Electric Power Regulatory Authority NEPRA Tower Attaturk Avenue (East), Sector G-5/1, Islamabad. Subject: Submission of application for Generation License for Master Green Energy Limited 50 MW Wind Power Project Dear Sir, We would like to submit herewith our Application for Issuance of Generation License to IVI:lster Green Energy Limited. Documents required pursuant to the provisions of National Electric Power Regulatory Authority Licensing (Application and Modification Procedure) Regulations, 1999 are also attached herewith this application. The application for Generation License (including its Annexures) is submitted in triplicate. Yours sincerely, For and on behalf of Master Green Energy Limited Rumman Arshad Dar Chief Operating Officer • • • • • 1 REQUEST FOR GENERATION LICENSE • Under the Regulation of Generation, Transmission and Distribution of Electric Power Act • (XL of) 1997 (the NEPRA Act) and the National Electric Power Regulatory Authority • Licensing (Generation) Rules 2000 (the Licensing Rules), the National Electric Power Regulatory Authority (NEPRA) is reponsible for and has the authority to inter alia grant • licenses for the generation of electric power and other terms and conditions for the supply of electricity through generation. Pursuant to Sections 7(2)(a) and 15 of the NEPRA Act, read with other enabling provisions 411 of the NEPRA Act and the Licensing Rules, and in accordance with the RE Policy 2006; • Master Green Energy Limited (the Project Company or the Applicant) hereby submits for NEPRA's kind and gracious consideration, the application for the grant of a generation • license along with supporting documents (the Generation License Application) for its • 50 MW wind power generation facility to be located at District Jamshoro, Sindh, Pakistan (the Project). • Given the advanced stage of the Project, NEPRA is kindly requested to process this Gener- • ation License Application at the earliest, thereby enabling the Project Company to proceed • fyrther with the development process. This Generation License Application is submitted in triplicate. • • • S • • go S • 0 • 3 • • • • • 2 THE PROJECT • • 2.1 Project Status • Letter of Intent Land Allocation V Soil and Topographical Survey V • Energy Yield Assessment Grid Interconnection Study V 46 Arrangement of Financing Jun 2017 EPC and O&M Contract 111 Aug 2017 Tariff and Generation License Dec 2017 • Letter of Support Jan 2018 EPA IA Jun 2018 • Financing Agreements Jun2018 • • 2.1.1 Issuance of Letter of Intent • Master Green Energy Limited, a company duly incorporated and existing under the laws of Pakistan, with its office located at 82 C-1 Gulberg III, Lahore was incorporated on May 12, • 2015 to develop, own and operate an approximately 50 MW wind power project in District Jamshoro pursuant to a Letter of Intent dated October 1, 2015 issued by Energy Department • Government of Sindh (EDGOS) vide its letter No. DAE/Wind/79/2015 (the LOI). • • 2.1.2 Land Allocation • After issuance of LOI, the Project Company identified suitable land for the Project in District • Jamshoro, Sindh. The allocation process was completed in January 2016 and a land allocation letter was issued to the Project Company by EDGOS on January 15, 2016. Details of • the location of the land are included as part of Schedule I, attached as section 4.1 to this • document. • 0 S • 4 • • • • MASTER GREEN ENERGY LIMITED Application for Generation License • 2.1.3 Completion of LOI related milestones Pursuant to the relevant provisions of the Policy for Development of Renewable Energy for • Power Generation 2006 and the LOI, the Project Company completed the detailed technical feasibility study (including soil investigation, topographic survey, transport study and wind • resource assessment) and submitted the same to EDGOS for review vide letter dated February • 22, 2016. The feasibility study was prepared by Renewable Resources (Pvt.) Limited, the technical consultants hired by the Project Company. A copy of the the feasibility study • report is attached as Section 3.11 to this document for reference. As required under the LOI, a comprehensive Initial Environmental Examination (IEE) of the Project was also carried out and the Project Company submitted the same to Sindh Environmental Protection Agency (SEPA) on December 15, 2015 for review. After care- • ful analysis of the IEE, SEPA accorded its approval to the Project through its letter No. • EPA/2015/12/31/IEE/1001 dated March 22, 2016. A copy of the IEE approval letter from • SEPA is attached as section 3.15 to this document. •S 2.1.4 Grid Interconnection Study The Project Company was granted permission by National Transmission and Despatch Com- pany (NTDC) to use its system data to carry out a grid interconnection study (Grid Study) • for the Project on July 1, 2017. The Grid Study was carried out by renowned grid consultants Power Planners International and submitted to NTDC for review. A copy of the final Grid Study report is attached as section 3.13 to this document. S The Grid Study was approved by NTDC on April 12, 2017 and Power Evacuation Certificate was issued to the Project Company on April 28, 2017. A copy of both are attached as section • 3.14 to this document. • 2.1.5 Way forward • The Project is currently at an advanced stage of development and is expected to proceed • further on an expedited basis. Once generation license is issued to the Project Company, the • Project Company will file for a tariff application pursuant to the tariff regime prevailing at • the time. • 5 • • • MASTER GREEN ENERGY LIMITED Application for Generation License 411 • 2.2 The Sponsors • Master Group, the main sponsor of the Applicant (the Sponsors), is one of the most dynamic • and diverse business groups of Pakistan. The Sponsor started its operations by entering into the bedding industry in 1963 as a licensee of Bayer A.G. (Germany) to manufacture foam mattresses in Pakistan and became a pioneer in the bedding industry. • In the year 1988, the Sponsor entered into the manufacturing and supply of automobile • interiors including seats with reclining mechanism and assembly, roof headlining and door trims to renowned OEMs such as Honda, Toyota, Suzuki, Nissan, Daihatsu, Hino and Volvo and today fulfils 70% of the requirements of the OEMs in Pakistan. In 1993, the Sponsor installed its first state of the art weaving unit marking its entry into the textile business. • Today, Master Group has a strong asset base of over USD 300 million and an annually increasing group turnover of more than USD 300 million. The Sponsor is not only the 41 leading player in the bedding market, but has also diversified over the period into the textile, auto and engineering sectors. • • The Sponsor is committed to play its part in the development of Pakistan's various sectors. Realizing the role of clean energy in development of the nation, the Sponsor ventured into the power generation sector by developing a 52.8 MW wind power project in Jhimpir, Sindh. • Master Wind Energy Limited successfully commenced commercial operation in October 2016. Master Green Energy Limited is the Sponsor's second project in the wind power sector, which • is expected to achieve financial close by end 2018. • •I • • • • • S 6 WI • • MASTER GREEN ENERGY LIMITED Application for Generation License • • 2.3 Project Costs and Funding Plan • An estimate of the assumed project costs has been determined, based on quotes from market participant and prevailing conditions. The tentative project costs project costs below are in line with the benchmark tariff recently announced by NEPRA for development of wind • power projects. • Tentative Project Costs Mil. USD Source of Funds Mil. USD 82.00 DEBT (75%) • EPC Interest During Construction 3.00 Foreign 25.00 • Project Development Cost 4.00 Local 44.23 Insurance 0.80 EQUITY (25%) • Financial Charges 2.50 Master Group 23.08 • Total 92.30 Total Financing 92.30 • 25% of the project costs will be injected by Master Group as Equity, while the remaining 75% • will be financed through debt. Master Group has adequate resources and financial strength to take on development of the Project, as evidenced in section 3.9.1 of this document. On • the debt financing front, National Bank of Pakistan and Meezan Bank Limited have been • appointed as Mandated Lead Arrangers for the Project (See attached term sheet attached in section 3.9.6 of this document) . The MLAs have received in- principal commitments for the • entire debt amount from the local debt market. Foreign financiers have also shown interest • in the project, with USD 25 million of the debt already being committed to be funded by a • foreign DFI. •0 • • • • • • • • 7 • • • IvvrAr-rEFI • MASTER GREEN ENERGY LTD. Lahore Office: 82 — C -1, Gulberg Ill, Lahore. • Tel: +92-42-35752620-22, +92-42-35758524-26 • UAN: +92-42-111-666-555, Fax: +92-42-35751905 BOARD RESOLUTIONS • The following resolutions were discussed in detail by the Board and approved unanimously on • 1 5J th of April, 2017: • "RESOLVED THAT Master Green Energy Limited (a company incorporated under the laws of • Pakistan with its registered office located at 82-C-1, Gulberg III, Lahore, Pakistan) (the Company) be and is hereby authorized to application for Generation License (including any subsequent • modifications) for submission to National Electric Power Regulatory Authority for grant of Generation License in respect of its 50 MW wind power generation project to be located at • Jamshoro, Province of Sindh, Pakistan (the Project) and in relation thereto, enter into and execute all required documents, make all filings and pay all applicable fees, in each case, of any nature • whatsoever, as required." • "FURTHER RESOLVED THAT in respect of filing of application for Generation License (including any subsequent modifications) for submission to National Electric Power Regulatory • Authority, MR.