Tender Biomass Phase III

PUNJAB ENERGY DEVELOPMENT AGENCY
INFORMATION BROCHURE / BID DOCUMENT

NO. 01/PEDA/BM-PHASE-III/2007-08
for
Setting up of Biomass/Agrowaste Power Projects
in
Private Sector
on
Built, Operate & Own (BOO) basis
in the
State of Punjab
Punjab Energy Development Agency

Plot No.1 & 2, Sector 33-D,
Chandigarh 160 034 (INDIA)
Phone : 0172-2663328, 2663382, Fax : 91-0172-2662865
/conversion/tmp/activity_task_scratch/725062785.doc
OPPORTUNITIES
for
POWER DEVELOPERS, PROMOTERS
and
ENTREPRENEURS
for
SETTING UP
of
BIOMASS / AGRO-WASTE POWER GENERATION

PROJECTS
in
PUNJAB
2
CONTENTS
S.No. Description Page No.

1. Punjab-The land of Exciting Opportunities. 4
2. Punjab at a glance 5
3. About PEDA 6
4. Why biomass power generation 7
5. Invitation for setting up of biomass power projects 9
6. Evaluation Methodology 11
7. Preparation and submission of proposals 13
8. Performance Guarantee/Security 17
9. Terms and Conditions 18
10. Project Implementation Schedule 21
11. Application Form 22
12. Proposed Sites by PEDA 29
13. Memorandum of Understanding 38
14. Implementation Agreement 44
15. NRSE Policy-2006 74
16 MNRE, GOI, Biomass Power Generation Projects 94
Guidelines
16 Press Notice 104
17 Maps of Districts of Punjab 105
3
PUNJAB
THE LAND OF EXCITING OPPORTUNITIES
INVITES YOU
 India’s New Economic Policy is investment friendly. Punjab has also taken a
lead in creating more opportunities which are waiting to be exploited
 Biomass / Agrowaste Power Generation potential of more than 1000MW in
Punjab
 An attractive package of incentives both financial and fiscal
 Easy access by road / rail / air
 Time bound clearances
 Well developed road network within the state
 Investment friendly climate with peaceful and safe environment
 Excellent telecommunication facilities
 Well established wide Rural Electrification Network
4
PUNJAB AT A GLANCE
S.No. Item Unit

01 Area 50, 362 Sq. Kms.
02 Location N. Latitude 29o-43’
To 32o-23’
E. Latitude 74o-03’
To 76o-49’
03 Districts 17
04 Development blocks 138
05 Population (2001 census) 2,42,86,296
06 Density 482 per sq. km.
07 Rainfall Average annual rainfall varies from
25 cm to 100 cm
08 Climate Winter : – 3o C to 20o C
Summer : 21o C to 45o C
09 Major Rivers Beas, Satluj, Ravi
10 Major cities Ludhiana, Jalandhar, Amritsar,
Patiala, Bathinda, Faridkot,
Ferozepur, etc.
5
ABOUT PEDA
Punjab Energy Development Agency under the Deptt. of Science, Technology,

Environment & Non-conventional Energy Sources of Punjab, is a nodal agency for
propagating the objectives of non-conventional and renewable sources of energy in
the state of Punjab including Biomass/Agro-waste based power projects. With the
purpose to exploit the abundant biomass/agro-waste resource in the State,
assessment studies were undertaken in 37 talukas of the state and the estimated
potential that has been identified is more than 300MW in these talukas. Biomass
combustion technology is well established and it can be utilised for setting up power
generation projects in the state. PEDA has undertaken various programmes for the
promotion and popularisation of these sources. Comprehensive studies undertaken
by PEDA have led to the identification of various potential sources of energy. Within
a short span, PEDA has made headway in the following fields :
 Power generation from small hydros

 Power generation from agro waste
 Power generation from solar energy
 Power generation from Urban & Municipal Waste
 Biomass gasification systems
 Solar Photovoltaic systems
 Battery powered vehicles
 Integrated Rural Energy Programme
 Energy Conservation in various user sectors
 Solar Passive Architecture
It is a matter of pride that PEDA has been awarded “The Best Performance Award”
for propagating the objective of Non-conventional and Renewable Energy Sources
by MNES,GOI and BEST BDA AWARD by IREDA.
6
WHY BIOMASS POWER GENERATION
Punjab is predominantly rich in agriculture and contributes the major share to the
grain basket of India. It has a high level of agricultural productivity due to its
sophisticated techniques which compare well with the advanced countries of the
world.
The agriculture production in the last three years has shown a remarkable upward
trend and Punjab once again has surplus production of major crops. It is a matter of
pride that though Punjab has only 1.5 percent of the total country’s cultivable area,
yet it produces 25 percent of country’s cotton, 22 percent of wheat and 55 percent of
rice. Punjab also possesses the most developed and extensive network of canals in
the country.
Punjab has so far been meeting its electrical power requirements primarily through
conventional large thermal and hydro power generation. Whereas, hydro power
generation has a tendency to fluctuate depending upon the availability of water,
thermal power generation has to depend on coal which has to be transported from
pit heads of eastern part of India involving large distances. Moreover, the cost of coal
has doubled in the preceding ten years and is expected to continue to escalate.
Resultantly, the cost of generation from coal will become prohibitive in the years to
come. Obviously, Punjab is strategically at a disadvantage in its efforts to augment
its power generation potential from oil, gas and coal.
The installed capacity of generation of power in the state is of the order of 5700 MW.
As per estimates, the demand for power by the year 2007 would go up to more than
9000 MW. From this it is evident that the state would continue to face the power
deficit during the 11th plan period. Punjab has substantial renewable energy potential
in the areas of Biomass / Agrowaste. The availability of Biomass / Agrowaste in the
state is sufficient to produce about 1000MW of electricity.
Role of Biomass / Agrowaste based projects is an attempt to supplement energy

generation as short / medium term measures has been well identified and accepted.
These projects which were earlier considered uneconomical are now considered
7
acceptable and viable in view of the steep increase of cost of several other forms of
energy and the rapid depletion of their sources and latest technologies developed in
the design of such projects. Biomass / Agrowaste based power projects have
attracted the attention of state and Central Govt. and also have been given priority
due to :
 Short gestation periods

 Smaller quantum of investment
 Reduced transmission losses
 Use of surplus biomass/agro waste resource for power generation
Propelled with the aim to promote and install Biomass / Agrowaste based project in
the state of Punjab, PEDA has planned to develop some of the available potential
Talukas / Tehsils in which Biomass Assessment has been carried out.
8
Invitation for setting up of Biomass / Agro-waste based power

projects on Build, Operate and Own (BOO) basis
Punjab Energy Development Agency invites proposals from prospective promoters,
developers and builders (national as well international) for setting up of Biomass /
Agro-waste based power projects at twenty nine (29) locations across the state as
detailed in the document.
Pre-Bid Conference
PEDA shall hold one pre-bid conference at 3.00 PM on 7/6/2007, so as to enable

PEDA to issue any clarifications and replies to the queries of the Bidders to the
extent possible.
Bidders are requested to send their queries in writing so as to reach PEDA in a week
prior to the Pre-Bid Conference. The primary purpose of this conference will be to
make clarifications on any queries on the bidding and site allotment process.
Minutes of Meeting, including the text of the questions raised and the responses
given, will be transmitted to all Bidders. Any amendments / modifications of the
proposal documents which may become necessary as a result of the Pre-Bid
Conference shall be made by PEDA exclusively through the issue of an Addendum
and not through the minutes of the Pre-Bid meeting.
Non-attendance at the Pre-Bid Conference will not be a cause for disqualification of

the Bidder. However, all clarifications and modifications presented in the Addendum
will be binding on all the Bidders irrespective of their attendance at the Pre-Bid
Conference.
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Eligibility To Bid
Proposals can be submitted by a single firm or a consortium of firms by nomination

of one of the firm being the lead firm for participation in the bidding. Each of the
consortium firms should have a minimum twenty percent share in the consortium.
The consortia of firms once constituted will not change the member firms till three
years after commissioning of the plant. The firm or the individual firms of the
consortium are required to possess either individually or together certain qualifying
criterion in respect of their financial standing so as to be considered for evaluation of
their proposals. The firm or the individual firms of the consortium should not be
defaulters of any bank or Financial Institution in term of any loan/debt taken by them.
In case of being found as defaulters there bid shall be summarily rejected. These
criteria are briefly summarized below:
Financial Eligibility Criteria :
Bidders should meet the following minimum eligibility criteria mentioned below for the
year 2005-06 :
Sr. No. Criteria Minimum eligibility requirement

for each site/taluka.
1. Turnover of the company p.a. Rs. 3 Crores

2. Net Worth Rs. 1 Crore
3. Free Cash Flow Minimum of Rs. 75 lacs
(Net profit+ Depreciation-
Repayment of long term debt)
Where the bids are submitted by a consortium of firms, all the participating firms
should jointly meet the minimum eligibility requirement for each criteria.
The minimum eligibility criteria is to be multiplied by the total no. of sites/talukas to

arrive at the minimum eligibility requirement applicable to the bidding firm or
consortia , if the firm /consortia is bidding for more than one site/taluka, otherwise all
bids shall be rejected being not eligible.
10
EVALUATION METHODOLOGY
The proposals of only those firms meeting the eligibility criteria specified above
should be taken up for detailed evaluation. The bidding shall be a two-stage process:
Stage I: In the first stage the financial status of the bidders shall be evaluated for
determining the eligibility .
The promoter i.e. the firm or the consortium of firms shall demonstrate that
the firm has access to or has available liquid assets, unencumbered
tangible assets, lines of credit and other financial means sufficient to meet
the construction, cash flow net of the promoters commitments for other
contracts/projects. The details of other commitments for projects must be
indicated separately.
After the evaluation of the offers to determine whether the bidder’s

capability and profile details are substantially responsive to the
requirements set forth in the information brochure/bid document, PEDA
would ;
1. Check the proposals for meeting the minimum eligibility criteria

2. The commercial bids of the eligible bidders shall be opened after a
prior intimation to the short-listed bidders.
Stage II: The financial bid of only the eligible bidders shall be opened for evaluation.
The bidders are required to quote the percentage revenue share that they
are willing to give to PEDA for allotment of each site(s), as a percentage
share of the saleable electricity. The monetary equivalent of this %age of
electricity sold to PSEB/third party shall be payable to PEDA. The bidders
are required to quote the %age electricity share to PEDA for all the 30
years from the date of commercial operation of the plant. Bidders will
quote the energy share for each year and no year should be blank
year/without offering any share. The energy share shall be offered
separately for each site in the enclosed format placed at Annexure-IV.
11
Evaluation of commercial bids shall be made on the basis of levelised cash

flow accruing to PEDA with discount rate of 12% per annum. The bidders
shall furnish the proposed energy calculations based on biomass
availability, proposed capacity, efficiency and plant load factor. Detailed
Project Reports shall confirm to these parameters/calculations.
.
12
PREPARATION AND SUBMISSION OF PROPOSALS
The bidders shall submit the proposals in two parts.

Envelope 1 : Bidder Capability and Profile (should be clearly marked on the envelope)
Envelope 2 : Commercial Proposal (should be clearly marked on the envelope)
Both these envelopes shall be placed in sealed large outer envelope. Each of the
envelopes will bear the name and address of the bidder and details of the project bid
for, as follows:
“Proposal for Development of Biomass Power Projects”
Name of Proposed Capacity in MW

sites/Talukas_____ for each site/Taluka
Envelop 1: Bidder Capability and Profile
This section delineates the information, which forms part of the bidder capability and
profile. This information is indispensable, and shall form the basis of the pre-
qualification evaluation and has to be provided in reasonable detail. The spirit of
this section is that the complete details should be amenable for check and evaluation
without any back-reference to the Bidder.
The proposal must be prepared in indelible ink and must be signed by the authorized
representative of the Bidder. The letter of authorization must be confirmed by a
written power of attorney accompanying the proposals. In addition, all pages of the
proposals must be initialed by the person signing the proposal.
The proposal must contain no inter-lineation or overwriting except as necessary to

correct errors made by the Bidders themselves, in which case such corrections must
be initialed by the person signing the proposal.
(a) Financial Capability Proposal: The promoters shall submit in the Financial Capability
proposals, the proof of financial standing backed by audited financial balance sheet for
the last three years (FY 2003-04, 2004-05, 2005-06 ) and details of the current liquid
13
assets. The method of mobilization of resources for funding the project cost shall be
indicated.
(b) Project Appreciation:
1. Details of technology offered for the project: the proposal shall indicate the
details of technology offered, proposed installed capacity in MW, number, pressure,
capacity & type of boilers and turbines and make of equipment. Technologies based
on biomass gasification and pyrolsis which are not fully established in the country are
not acceptable as technology options. The proposal shall clearly state the
capabilities with regard to a firm fuel linkage in the form of biomass / agro
waste sourcing, collection, transportation & storage throughout the year for
continuous operation of the plant.
 Scheme for Implementation and Operationalization: the bidder shall provide the
following:
i) The details of the personnel proposed to be employed on the project and

proposed organizational chart.
ii) The Implementation Schedule, maximum & minimum gestation period and all
other relevant details on proposal for erection, procurement & commissioning
of the plants. (including a PERT chart summarizing the project
implementation schedule)
iii) Proposed scheme for financing
(c) Litigation Record: Applicants, including each of the partners of a joint

venture, should provide information on any history of litigation or
arbitration resulting from contracts/agreements executed in the last five
years or currently under execution. A separate sheet should be used for
each partner of a joint venture/consortium
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Year Award FOR or Name of Disputed Actual

AGAINST Client, cause amount (Value Awarded
Applicant of Litigation in INR) Amount (in
and matter in INR)
dispute
(d) Application Processing Fees: An application processing fee of Rs. 5,000 per
site/taluka is payable to PEDA. The bidders should append a Demand Draft in favour of
PEDA payable at Chandigarh. Proposals without Application processing fee shall be
rejected.
(e) Earnest Money Deposit: The Bidder shall furnish, as part of his proposal, an Earnest
Money Deposit amount as follows:
Biomass Plant Capacity Earnest Money Deposit

Upto 6 MW Rs. 1,00,000/site
Above 6 MW and upto 10 MW Rs. 1,50,000/site
Above 10MW Rs. 2,50,000/site
The Earnest Money Deposit shall, at the Bidder’s option, be in the form of a bank draft or a
bank guarantee from a scheduled bank which has been ascertained by the Bidder to be
acceptable to PEDA. Letter of credit and bank guarantees issued as security for the proposal
shall be valid for 180 days from the last date of submission of the proposal specified in the
bid invitation advertisement.
Any proposal not accompanied by an acceptable Earnest Money Deposit shall be rejected
by PEDA. The Earnest Money Deposit of the Bidders, who do not qualify for the stage II of
the bidding process, will be returned within 90 days from the last date of submission of the
proposal specified in the bid invitation advertisement.
The Earnest Money Deposit of the unsuccessful Bidders at the stage II of the bidding
process, will be returned within 180 days from the last date of submission of the proposal
specified in the bid invitation advertisement.
15
The Earnest Money Deposit of the successful Bidder will be discharged when the Bidder has
signed the Memorandum of Understanding with PEDA and furnished the required
performance security.
The Earnest Money Deposit will be forfeited under the following conditions.
i) If the Bidder withdraws his proposal after submission to PEDA during the
period of proposal validity.
ii) In the case of a successful Bidder, if he fails within the specified time limit to
a. Sign the Agreement; or
b. Furnish the required performance security for the construction phase
(f) Supporting Documents: The bidders are required to submit following supporting
documents as part of their proposal:
i) Copies of MoU’s and agreement relevant to this project between member of

consortium of firms shall be furnished to PEDA for review and record with the
proposals. Individual firms are not permitted to participate in more than one
consortium of firms for bidding for these projects.
ii) Where necessary, PEDA will make appropriate inquiries with the bidders & bankers
for which the bidder shall issue authorization to PEDA to do so.
Envelop 2 : Commercial Proposal
The second envelope shall contain the Commercial Proposal.
The bidders are required to quote the percentage revenue share that they are willing
to give to PEDA for allotment of each site/taluka, as a percentage share of the
saleable electricity. The monetary equivalent of this % of electricity sold to
PSEB/third party shall be payable to PEDA. The bidders are required to quote the %
electricity share to PEDA for each site in the prescribed format for energy share
separately for each site. The difference in minimum and maximum energy share
offered in any year will not exceed beyond 50% e.g. the minimum energy share
offered in any year is say 5%, then the maximum energy share in any year cannot
exceed 7.5% energy share.
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PERFORMANCE GUARANTEE/SECURITY
The selected promoters shall be required to furnish the following :
1. Performance Guarantee valid till commissioning of the project

(commencement of commercial generation) in the shape of Bank
Guarantee immediately after signing of the Memorandum of
Understanding for developing of Biomass Power Projects @ Rs 25000/-
per MW for each individual project site.
2. The facilitation services charges @ 0.1% of the project cost immediately

after approval of the Detailed Project Report and Biomass Assessment
Report.
17
Terms & conditions

1. Though the promoters and developers are free to participate for as many
Projects they want however one proposal shall not contain sites of more than
one Taluka (Tehsils). Therefore separate proposals are required to be
submitted for sites in different Talukas.
2. The generating capacity that is mentioned for each of the location in this
document is indicative based on Biomass assessment studies carried out by
PEDA under the MNRE,GOI National programme. The bidders are requested
to ascertain on their own the plant capacities that they plan to install at any
project location. Bidders are required to carry out their own Biomass
Assessment studies along with the DPR.
3. Keeping in view the generation capacity of the proposed project ,biomass /
agro-waste availability & its logistics, only one project site per taluka shall be
offered after evaluation to selected promoter. In all twenty nine projects sites
in 29 talukas of the state are being offered under phase-II.
4. In addition to the above twenty nine talukas, PSEB has allocated 12 biomass
project sites in the state to pvt. Developers. The proposed location of these
project sites is given in the Annexure-II
5. The power to be generated from these projects is for the purpose of sale to
the state grid.
6. All the statutory / non-statutory clearances shall have to be obtained by the
developer. However, PEDA will facilitate in obtaining these clearances from
the competent authorities.
7. PEDA shall also facilitate obtaining of term loans from IREDA and requisite
financial benefits from MNRE,GOI.
8. Promoters / Developers should have access to the land required for setting
up the plant and land ownership documents must be submitted to PEDA at
the DPR approval stage.
9. The developers shall strictly adhere to the implementation schedule.
10. Conditional bids are liable to be rejected.
11. PEDA reserves the right to cancel any one or all the bids without assigning
any reason.
18
12. In line with notification No.PERC/Secy/Reg.03 dated 5.2.02 the prospective

bidders will obtain approval of PPA from Punjab State Electricity Regulatory
Commission .
13. The defaulting company to any of the financial institutions in repayment of
debt/interest will not be eligible to participate in the bidding. A certificate to
this effect shall be furnished by all the participating companies alongwith
their bid/offer in the prescribed format at Annexure-VII.
14. In case two bidders are offering the same electricity share for the same
site(s), in such cases rebidding among the two bidders will be resorted to
and the bidder offering more percentage energy share in rebidding shall be
allotted the site(s).
15. The bidders shall conclude the bid informations relating to envelop-I &
envelop-II in prescribed formats placed at annexure-III to VI.
Proposals submitted by consortium shall comply with the following:
i) The proposal must describe the qualification, experience and

responsibilities of each member and the commitments each
member intends to make for the project. For the aforesaid purpose
bidder shall submit a copy of the Memorandum of Understanding or
an Agreement specifically entered into by all participating members.
In addition the bidder shall also submit details of the structure of the
proposed consortium for implementation of the project as well as a
copy of its draft formation agreement, Memorandum of Association
and Article of Association. Any written agreement or document
which describes their responsibilities and commitments should be
provided with the proposal.
ii) The proposal must designate one person to represent the
consortium in its dealing.
iii) All consortium members shall be jointly and severally responsible
for implementation and operation of the project(s).
iv) The minimum percentage participation by each consortium member
in the consortium bidding for the site should be minimum 20% for
each site.
19
v) No firm is allowed to participate in more than one consortium for bid

participation.
16. The terms and conditions for implementation of the project shall be formalized
through signing of Implementation Agreement with PEDA. Power Purchase
agreement shall be signed by the developer with the PSEB for Sale of Power.
17. In accordance with the NRSE Policy-2006, the cost of laying the transmission
lines & associated equipment for evacuation of power to the PSEB Grid Sub
Station shall have to be borne by the private developers.
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PROJECT IMPLEMENTATION SCHEDULE
The implementation schedule applicable on allotment of sites/talukas to the

successful bidders shall be as under:
Sr. No. Activity Time schedule

(Days)
1 Signing of MoU (From the date of allotment of sites) 30
2 Preparation of DPR and Biomass Assessment 120
Report by the developer
3 Approval of DPR & Biomass Assessment Report 30
4 Signing of Implementation Agreement 15
5 Financial Closure 90
6 Commencement of project construction 30
7 Commencement of Commercial Generation 365
TOTAL 680 days
Note:
i) Immediately after the allotment of site(s) the prospective bidders will sign the
MoU with PEDA within 30 days from the date of allotment of Biomass power
plant site(s).
ii) After approval of DPRs the IPPs will sign the Implementation Agreement for
implementation of the project with PEDA and thereafter PPA with PSEB within
30 days after approval of tariff by PSERC.
iii) The developers will stick to the Implementation Time Schedule except for
reasons beyond the control of the private developer, in case the bidders do
not adhere to the implementation schedule their sites will be cancelled.
iv) Any delay taking place in tariff approval by PSERC & PPA signing by PSEB
must be informed in writing by the company.
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APPLICATION FORM
(TO BE FILLED IN BY THE SOLE BIDDER FIRM/ LEAD FIRM IN THE BIDDING CONSORTIUM)
A. GENERAL
1. NAME AND COMMUNICATION DETAILS
1.1 Full legal name/structure of applicant company :
1.2 Registered office address :
1.3 a) Telephone :
b) Telex :
c) Fax :
d) E-mail
1.4 Telegraphic Address :
1.5 Name, Designation & Address of Contact Person :
1.6 Branch Office Address :
2. NATURE/STATUS OF APPLICANT COMPANY :

(Whether Sole Proprietary/Partnership/Private Limited/Public
Limited/ Public Sector/Consortium), Attach
i) Copy of Registration Certification
ii) Memorandum of Articles of Association
iii) Partnership Deed
iv) Brief history of operation since its inception.
3. NAME OF SUBSIDIARIES/ASSOCIATES & PARENT :

COMPANIES (Provide in brief their nature of activities, capital
layout and balance sheets for the last three years).
4. WHAT BEST DESCRIBES YOUR COMPANY PRESENT :

ACTIVITIES/BUSINESS
5. DETAILS OF ORGANISATIONAL SET-UP OF APPLICANT :

COMPANY
6. ARE YOU PRE-QUALIFIED AND ENLISTED WITH ANY :

GOVERNMENT DEPARTMENT / PUBLIC SECTOR
UNDERTAKING INVOLVED IN HYDRO ELECTRIC
PROJECTS?
IF YES, GIVE DETAILS?
7. LIST OF INDUSTRIES IN PUNJAB (if any) either owned by :

the company or a third party, where the company may like to
use the power generated from the project in case third party
sale is proposed.
7.1 If answer to para-7 is affirmative, energy requirement :

alongwith seasonal variations (if any).
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B. FINANCIAL
1. FINANCIAL DETAILS OF APPLICANT COMPANY
1.1 Share capital at the time of formation of company

a) Authorized :
b) Paid up :
1.2 Present share capital

a) Authorized :
b) Paid up :
1.3 Investment in other ventures during the last three years :
Please attach additional sheets giving details of the above.

1.4 Turnover during the three reference years
2003-2004:_____________
2004-2005:_____________
2005-2006:_____________
1.5 Net profit/loss during the three references years 2003-2004:_____________
2004-2005:_____________
2005-2006:_____________
Free Cash Flows (FCF) for the Financial Year (FCF

= Net Profit + Depreciation – repayment of Long 2003-2004:_____________
Term Debt 2004-2005:_____________
2005-2006:_____________
1.6 Full name and address of your Bankers

(also authorize them to furnish such information as may be Name of the
required by PEDA) Bank:_________________
Address:_______________
______________________
Contact Person_________
Tel:___________________
Fax:__________________
1.7 Audited Annual Balance Sheets

(Please submit copies of audited Annual Balance Sheets and
profit and loss accounts statements for each of the three
reference financial years).
If application is made by a consortium of firms, Sections A & B are required to be filled-in

separately for each firm in the consortium.
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C. PAST EXPERIENCE
1. EXPERIENCE DETAILS OF APPLICANT FIRM/

CONSORTIUM
1.1 Experience in the Power Sector
(Give details of the experience in the power sector as a Number of Projects_______

developer/ project contractor. This should include the
details of the project execution experience, including Total Capacity in MW_______
installed capacities, place of execution, year of project
completion and any other relevant information)
Please attach additional sheets giving details of the
above.
1.2 Experience in the Non-Conventional Energy Sources
(Give details of the experience in the sector as a
developer/ project contractor. This should include the Number of Projects__________
details of the project execution experience, including
installed capacities, place of execution, year of project Total Capacity in MW_______
completion and any other relevant information)
above.
1.3 Experience in BOO/BOT/BOOT projects
(Give details of projects undertaken, if any, by the Number of Projects__________

company in partnership with a government agency in
either of the above formats)
above.
1.4 Has your company worked in Biomass Power generation
projects?
I. As a Private developer :_________________________
II. As a Joint / Assisted Venture :_________________________
III. As a Supplier of Equipment :_________________________
IV. Prime Contractor :_________________________
V. Sub-Contractor, if yes, please give name, address of :_________________________

Prime Contractor
VI. On BOO/BOOT/BOT basis :_________________________
1.5 If answer to 1.4 is yes, Give details :
1.6 Technical Collaboration (if any) give details :
1.7 Details of technology used :
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D. PROJECT PROPOSAL
1.1 Details of sites proposed to be utilized :
1.2 Has the project sites been visited by the engineers of the :
applicant company?
1.3 Details of investigation carried out if any including the :

availability and type of biomass fuel proposed to be
utilised for the project.
1.4 Estimated installed capacity of each site as per your :

technical evaluation, giving details.
1.5 Technology offered :
1.6 Make, type and rating of the boilers, turbines offered :
1.7 Maximum time required for completion of each site :

(From concept to commissioning)
1.8 Attach details of field organization / equipment and other :

infrastructure available with the applicant company for
execution of biomass projects (Civil & electro-
mechanical works)
I/We hereby, certify that the information furnished by me/us is a true statement of
facts.
(Name, Designation
of person signing)
Date:
Place:
List of documents enclosed
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NOTES:
1. Where the space provided above is not sufficient extra sheet may be used.
2. The participant shall submit all the pages duly signed and stamped by the
authorized person.
CHECKLIST OF DOCUMENTS TO BE ENCLOSED
1. A certified copies of partnership deed, if applicable.

2. A certified copy of registration, if the partnership is registered.
3. A certified copy of the Memorandum & Article of Association of the public/private limited
company and also copy of the registration certificate.
4. A certified copy of the Authority conferring powers on the person(s) who is/are
competent to execute the MoU / Agreement.
5. Published audited balance sheet and profit and loss account for the three reference
years.
6. Details of field organization/equipment and other infrastructure available with the
applicant firm.
7. Any other relevant document asked for in the application.
8. Performa for percentage energy share to PEDA at annexure-III.
9. Details of bid at annexure-IV.
10. Details of Project proposal at annexure-V.
11. Details of financial eligibility parameters at annexure-VI.
12. Certificate of Default at Annexure-VII.
13. Performance Security form.
14. Bid Security Form.
26
Procedure for Clearance of project proposal

The following procedure shall be adopted by PEDA for approval / clearances
for the project which is in accordance with the NRSE policy – 2006 :
i. The parties desirous of setting up NRSE projects will sign an MoU with PEDA for
development of the NRSE project.
ii. The developers for obtaining the approval of project proposal will submit their
applications to the Chief Executive, PEDA. Their project proposal will be
forwarded to the Government for approval.
iii. The project proposal shall be considered by the Empowered Committee for
necessary approvals/ clearances by the State through a Single Window
Mechanism and in a time bound manner. The clearance/approvals shall be
accorded within 60 days from the date of submission of completed applications
on the required prescribed formats of various clearance issuing bodies /
departments along with the requisite fees to the State Nodal Agency. Private
developers shall however be required to fulfill all statutory / legal requirements
with regard to project reports/documents submission as per requirement of
approval/clearance issuing bodies/ organizations under the Govt. rules,
regulations & Acts.
iv. After approval of the project proposal, and after issuing of all statutory
clearances, the Producer shall enter into an Implementation Agreement with
PEDA within a period of one month from the date of approval of the project.
v. Private developers shall file petition in the PSERC for tariff approval within 15
days after signing of the implementation agreement with PEDA and PSEB/
LICENSEES shall sign the Power Purchase Agreement within 45 days from the
date of issue of tariff order by the PSERC after the submission of requisite
documents by the developers.
vi. If the applicant does not take effective steps to implement the project within six
months from the date of approval of the project proposal, the Agreement could be
terminated and their project proposal will be cancelled (i.e. at least 10% of the
total project cost should be incurred).
vii. Punjab Irrigation Department will accord technical clearances of drawings/

technical specifications within 30 days, if required.
27
Statutory approvals required for setting up of biomass based power projects :
1. The bidders / companies shall require to obtain the following pre-

project approvals / clearances for the project :
i. Land use pattern conversion / NOC
ii. Pollution Control Board NOC
iii. Canal water usage approval.
iv. Ground water clearance.
v. TG set approval & boiler approval.
vi. Environment clearance from Competent Authority.
vii. Pb. State Electricity Regulatory Commission approval for tariff
fixation.
viii. Power Purchase Agreement with PSEB.
The following minimum requirements are to be fulfilled for the purpose of term
loan from IREDA :
1. Detailed Project Report

2. Biomass availability report
3. Company should have the clause of power generation and sale of
power in their memorandum and article of association.
4. Company should have the borrowing capacity.
5. Company should not be in loss for the last three years, audited balance
sheet for last three years to be submitted.
6. Minimum equity to be brought in for the project is 30% of the project
cost.
7. Other terms & conditions to be fulfilled as per IREDA/F.I. financing
guidelines.
28
ANNEXURE-1
SITES OFFERED BY PEDA UNDER PHASE-III
Taluyka District Estimated Power

Potential (MW)
Dera Bassi Mohali 8
Tarn Taran Tarn Taran 12
Jagraon Ludhiana 10
Phagwara Kapurthala 5
Gurdaspur Gurdaspur 2
Kharar Mohali 2
Hoshiarpur-I Hoshiarpur 4.5
Samrala Ludhina 5
Fazilka Ferozepur 10
Total -- 58.6
SOURCE : Estimated major surplus biomass availability data based on reports prepared under
the National Biomass Resource Assessment Programme of MNES, GOI.
The biomass assessment reports prepared under the National Biomass Resource
Assessment Programme of MNES, GOI are available on a payment of Rs. 5000/- per
report.
29
Annexure-II
List of proposed sites allocated by PSEB to Private Developers
Sr.No. Location (Village) District

1. Dakala Patiala
2. Mulowal Sangrur
3. Nurpur Ludhiana
4. Ramgarh Sangrur
5. Sidhwan Khas Ludhiana
6. Sindhar Jalandhar
7. Majitha Amritsar
8. Tibbar Gurdaspur
9. Sotha Mukatsar
10. Rohanna Ucha Fatehgarh Sahib
11. Akbarpur Patiala
12. Nadampur sangrur
* Projects are yet to be setup on these sites.
30
Annexure-III
EVALUATION SHEET FOR THE OFFERED ELECTRICITY

SHARE TO PEDA
Name of the Company:
Name of the Project Site: Installed Capacity:

(As per bid document)
Name of the Taluka/Tehsil: Implementation Period:

S. Year Proposed %age Energy Units Rate per Amount
No. Generation Share offered unit (Rs.)
(Kwh)
1. 1st
2. 2nd
3. 3rd
4. 4th
5. 5th
6. 6th
7. 7th
8. 8th
9. 9th
10. 10th
11. 11th
12. 12th
13. 13th
14. 14th
15. 15th
16. 16th
17. 17th
18. 18th
19. 19th
20. 20th
21. 21st
22. 22nd
23. 23rd
24. 24th
25. 25th
26. 26th
27. 27th
28. 28th
29. 29th
30. 30th
TOTAL
Total NPV at Discount Rate of 12% =
Note:
i) The discounting is to be carried out @ 12%.
ii) The date of commissioning of project may be considered as 680 days from the date of bidding
for evaluation purpose.
iii) The rates of sale of electricity may be considered as per NRSE Policy & Incentive-2006
enclosed herewith.
iv) Extra sheets may be attached if required.
v) The bidder may quote different percentage of energy share for different years but no year
should be left blank.
vi) The difference in minimum & maximum energy share offered in any year will not exceed
beyond 50% .
31
Annexure-IV
Details of Bid of M/s. for Allotment of Biomass Projects.
S. Details of sites applied Single Firm or Project Propo Litigati Remarks

No. for Consortium If Implemen sed on
Consortium tation Financ Record
Schedule ing of
the
Project
No. Taluka/ Name Lead % age
of Tehsil of site Company & partnersh
sites with Other ip of each
villag Members of company
e Consortium
name
NOTE: Extra sheets can be attached if required.
MOU of the Consortium: Furnished _______ Not Furnished/Not Required _____
Processing Fee: Deposited Vide DD No.______________ Dated ____
For Rs.___________ Drawn on (Bank)_________________
Earnest Money : Deposited Vide DD No._________ Dated _________
For Rs.__________Drawn on (Bank) ________________
(Please mark/wherever applicable)
32
Annexure-V
Details of Project Proposals
S. Project Proposal Remarks

No.
Name of Taluka District. Installed Proposed Technology
Site Capacity Gen. Offered
(KW) (MUs)
Note: Extra sheet can be attached if required.
33
ANNEXURE-VI
DETAILS OF FINANCIAL ELIGIBILITY PARAMETERS OF THE BIDDERS FOR APPLIED

BIOMASS PROJECT SITES FROM THE BALANCE SHEET OF
FINANCIAL YEAR 2005-06 or 2006-07
Name of the Company/Lead Company:
Total Bid Capacity of the Firm/Consortium:

(As per bid document)
(Rs. in lacs)
S.No. Financial Parameters Achieved Financial Eligibility Requirement Remarks (if

Parameters as per any)
accounts
1 Turn Over
2 Net worth
3 Cash flow
(Net profit +
Depreciation+Non
Cash Items -
Repayment of long
term Debt excluding
previous Debt)
Notes:
i) The company shall enclose the brief notes to the financial parameters considered by the
firm/company enabling us to understand the values & reasoning for such considerations.
34
Annexure-VII
CERTIFICATE
Certified that M/s. _______________________ /Member(s) of Consortium of
participating Companies or its/their promoter(s) is/are not in default to any of the financial
institutions/banks in respect of any dues towards term loan, working capital loan or buy back
obligation or interest due to the Company(s)/promoter(s)/consortium members.
Date:_________ For_______________
(Company Name)
35
PERFORMANCE SECURITY FORM
To:__________________________ (Name of Agency)____________________________

WHERAS____________________ (Name of bidder)_______________________________
hereinafter called “ the Bidder” has undertaken, in pursuance of bid no.
__________________ dated __________________ 2007 ___________ to set up Biomass
Power Projects on Build, Operate & Own basis (BOO) as offered in the Bid.
AND WHEREAS it has been stipulated by you in the said bid that the bidder shall furnish you
a Bank Guarantee by a recognised bank for the sum specified therein as security for
compliance with the performance obligations, in compliance to the performance obligations
in accordance with the bid document/brochure/agreements/memorandum of understandings
to be signed.
AND WHEREAS we have agreed to give the bidder a guarantee:
THEREFORE WE hereby affirm that we are guarantors and responsible to you, on

behalf of the bidder, up to a total sum of Rs. _______________ (Amount of the
guarantee in words ) and we undertake to pay you, upon your first written demand
declaring the bidder to be in default under the bid
document/brochure/Agreement/Memorandum of Understanding signed/to be signed
for setting up of the Biomass Power Project on Build, Operate & Own basis and
without cavil or argument, any sum or sums within the limits of Rs. ____________
(Amount of guarantee) as aforesaid, without your needing to prove or to show
grounds or reasons for your demand or the sum specified therein.
This guarantee is valid until the ____________ day of ___________ 2007.
Signature and Seal of the Guarantors
______________________________ _______________________________
Date: ____________________
Address: __________________
36
BID SECURITY FORM
To : ______________________________________________ (Name of Agency)

Whereas ______________________________________________________ (hereinafter
called “ the Bidder”) has submitted its bid dated _______________ for setting up of
Biomass Power Plants on Build,Operate & Own Basis (hereinafter called “ the Bid”)
______________ KNOW ALL MEN by these presents that WE __________________ of
__________having our registered office at
___________________________________________ (hereinafter called “ the Bank ” ) are
bound to Punjab Energy Development Agency (hereinafter called “the Agency”) for the sum
of Rs. ____________________ for which payment will and truly to be made to the said
Agency the Bank binds itself, its successors and assigns by these presents. Sealed with the
common Seal of the said Bank this _______________________ day of
______________________ , 2007.
THE CONDITIONS of this obligation are:
1. If the Bidder withdraws its Bid during the period of bid validity specified by the Bidder
in the Bid or
2. If the Bidder, having been notified of the acceptance of his bid by the Agency during
the period of bid validity:
a) Fails or refuses to sign the Memorandum of Understanding for setting up of
the Biomass Power Projects as offered by the bidder or
b) Fails or refuses to furnish the Performance Security, in accordance with the
Instructions to Bidders in the bid document:
We undertake to pay the Agency up to the above amount upon receipt of its first
written demand, without the Agency having to substantiate its demand, provide that in its
demand the Agency will note that the amount claimed by it is due to it owing to the
occurrence of one or both of the two conditions, specifying the occurred condition or
conditions.
This guarantee will remain in force up to and including Ninety (90) days after the
period of bid validity and any demand in respect thereof should reach the Bank not later
than the above date.
(Signature of Bank)
37
DRAFT MEMORANDUM OF UNDERSTANDING BETWEEN PUNJAB ENERGY

DEVELOPMENT AGENCY AND M/S________________________ FOR THE
IMPLEMENTATION OF ___________________BIOMASS POWER PROJECT OF ( ____
MW) IN THE STATE OF PUNJAB.
This memorandum of understanding (MOU) made on the day

_____________________ in the year Two Thousand and Seven between PUNJAB
ENERGY DEVELOPMENT AGENCY through Chief executive, Punjab Energy Development
Agency having its office at Plot No. 1 & 2, Sector 33-D, Chandigarh, hereinafter referred to
as “PEDA” which expression shall unless repugnant to the context or meaning thereof,
include its successors and assigns of the ONE PART.
AND
M/S _________________________________ having its registered office at

_____________________________________ hereinafter referred to “The
Company/Promoter” which meaning thereof, include its successors, executors,
administrators, representatives and permitted assigns of the OTHER PART.
Whereas the PEDA has decided, in line with the policy guidelines of the government
of Punjab, to allow the setting up of Biomass power generation project (herein after referred
as project(s)) at its own on Build Operate & Own (BOO) basis in private sector and has
invited proposals for private investments in such Projects
interalia___________________________ Project in ___________________________ Distt.
____________________ (Punjab) of the capacity of __________ MW.
AND WHEREAS the Company/Promoter has decided to set up the said project if
found viable, as well as the transmission system associated therewith for evacuation of
Power as per Punjab Govt. Notification No. 10/106/2006-STE(1)/5390 dated 24th Nov’2006
AND WHEREAS the PEDA and the Company/Promoter have held discussions and
the Company/Promoter had agreed for implementation of the said project and are desirous
of reducing in writing the terms and conditions of the said understanding
38
NOW THIS MEMORANDUM OF UNDERSTANDING BETWEEN THE PARTIES HERETO

WITNESSETH AS FOLLOWS :
1. The Company/Promoter is desirous of and have submitted its offer to the PEDA for
investigations and if found viable for implementation of the proposed
_______________________Biomass power Project at
Site(s)_______________________ in ______________________ Distt. of Punjab
hereinafter referred to as the Project(s).
2. The PEDA has accepted the proposal of the Company/Promoter and company is
preparing the DPR and thereafter to implement the Project subject to approval of
DPR by PEDA.
3. PEDA shall examine the viability of the Project on the basis of the DPR submitted by
the company and on being found viable shall approve the DPR.
4. The PEDA agrees to provide the company copies of all available documents, data,
information & reports relating to the project including copies of all investigations &
studies if any carried out since the inception of the project. The PEDA further agrees
to assist the company in obtaining statutory clearances if required from the Deptt. of
Environment & Forest, Punjab Irrigation Deptt. Punjab Pollution Control Board, PSEB
etc. and Central/State Govt. subsidies & other facilities & signing of PPAs with
Punjab State Electricity Board, Punjab Govt. as well as for deputing PEDA personnel
for site visits to the project area alongwith the company personnel until the
submission of DPR. For these services PEDA would charge a fee @ 0.1% of the
project cost as given in the DPR. These charges shall be payable through a bank
draft in favour of Punjab Energy Development Agency, Chandigarh within 15 days
from the approval of DPR but before signing of the Implementation Agreement by the
Company.:
5. In addition to the service charges the developer shall pay percentage energy share of
electricity to PEDA as offered by the company in his bid now indicated in Annexure-
III.
6. The Company shall carry out the requisite detailed investigations and techno-
economic studies of the project and shall submit a detailed project report to the
PEDA within a period of 120 days from the date of signing of this MoU. In the event
of the Company being unable to submit the DPR within the stipulated period of 120
days and if the DPR on examination, is not found acceptable to PEDA, for any
reason whatsoever, PEDA shall give an opportunity to the promoter (15 days notice)
to amend the DPR so as to rectify the objections raised by PEDA and if the Promoter
fails to do so then PEDA shall have the option to rescind the MoU.
39
7. The company/promoter agrees that it shall not sublet/transfer its right accrued under
this MoU to any other party.
8. The Company/Promoter agrees to provide immediately but not later than 15 days of
the signing of this MoU a refundable interest free performance security of Rs. ______
(Rs. ___________) per site in the shape of Bank guarantee in favour of the PEDA
for carrying out the objects of this MoU. In case of breach of this MoU, or any part
thereof, this security shall be liable to be forfeited by PEDA. The performance
security shall be refunded on commissioning of the projects. Notwithstanding the
above, in the event of PEDA not accepting the prepared DPR of the
Company/Promoter or the Company/Promoter not finding the projects viable techno-
commercially or for any justifiable reason and the project(s) reverting back to PEDA,
the corresponding project (s) Bank guarantee shall be immediately returned to the
Company/Promoter duly discharged.
9. The Company/Promoter shall have no right to claim any compensation from PEDA or
any other developer for exploitation of biomass potential in other talukas of the state
as per site allotted to him, till the time of signing of this MOU and the
Company/Promoter shall be informed of any proposed biomass power projects in
adjoining talukas/tehsils of the projects sites before the signing of this MOU.
10. The PEDA and the company after having reached a conclusion that the Project is
viable and that the Company/Promoter is willing to set-up the project, shall enter into
an Implementation Agreement within 15 days thereafter for the implementation of
the Project. PEDA shall provide full assistance for obtaining all such permissions and
approvals, as may be required for implementing the Project, provided all necessary
information/data/details are duly furnished by the Company to the concerned Deptt.
PEDA shall also provide full assistance to the Company/Promoter for finalisation and
expeditious signing of PPA for sale of Power to PSEB
11. PSEB shall have the first option to purchase the whole or part of power generated
from these projects at the rates and terms and conditions given in and governed by
Punjab Govt. Notification No. 10/106/2006-STE(1)/5390 dated 24 th Nov’2006 unless
otherwise agreed to by the parties . However, PEDA shall assist in seeking from
PSEB that PSEB shall have to inform of its decision to buy the power or stop buying
the power, as the case may be, at least one year in advance to the
Company/Promoter to give it enough time to make necessary changes with other
affected parties. However, this shall be carried out only after ensuring that it does
not violate any of the alive agreements with third parties that the Company/ Promoter
may have entered into till that time.
40
12. The company / promoters after being satisfied with the technical feasibility &
economic viability on all other accounts, of the project, may make suitable
arrangement for financing the cost of the project and, if considered necessary by the
company/promoter, incorporation of a Public limited Company (with major equity
participation by the promotors/company to whom these sites are allotted by PEDA)
with registered office located in Punjab for implementation and operation of the
Project. The company/promoter shall be permitted to set up the project(s) in the
name of the separate company as long as major equity participation by the
company / promoter is ensured.
13. The Company/Promoter agrees that they shall carry out the investigations as well as
the implementation, if found viable, of the Project. The Company shall allow access
to the authorized representative(s) of PEDA to all the locations of the Project.
14. The company/promoter shall ensure that while preparing detailed project report or
implementing the project, the project will not affect any public utility scheme such as
drinking water, irrigation scheme, approach path/road etc., except to the extent
required and approved by the concerned department/authority.
15. PEDA agrees to ensure the grant of necessary permission to the Company to
establish, operate and maintain the Project on BOO basis and sell power from the
Project for a initial period of twenty years from the date of commissioning.
16. This MoU is exclusive to the parties hereto and promoter/company shall not assign
its rights and benefits thereunder except with mutual consent .
17. This MoU shall remain in force for a period of six months, unless extended by mutual
consent of both the parties, from the date hereof, within first 12 (or 24) months, (inline
with clause 6 above), of which the Company/Promoter shall make best efforts to
obtain the approval of DPR and which approval shall not be unreasonably withheld
beyond 15 days. The company shall adhere to the implementation schedule bid as
stated in the detailed project report (DPR).
18. PEDA shall not entertain any other similar project to be set up in the command area
of this project provided full exploitable potential in a taluka has been harnessed in
terms of MW capacity,so as to avoid any adverse impact on the sourcing of biomass
fuel for the sanctioned capacity of this project.
19. Each party hereto agrees that it shall not divulge any trade, commercial or technical
secrets of confidential matters of one another to any third party, save and except for
the purpose of implementing the understanding reached in this MoU.
20. Neither party shall be considered to be in default under this MoU for any breach of
any of the terms thereof due to the imposition of restrictions of onerous regulations
by any government or statutory authority or agency or other cause beyond its
41
reasonable control including force majeur conditions (due to nature or created by

man) like floods, earthquake, fire, war, insurgency, terrorism, lightening, rains etc.
21. Both the parties shall do and execute all such acts, deeds, assurances and things, as
may be necessary and proper for carrying out the terms of this MoU. The parties
agree to negotiate and enter into such agreements as may be required to give effect
to the understanding reached herein.
22. The Company/Promoter shall submit all applications with regard to this project to
PEDA , which shall in turn scrutinize and forward the same to the concerned
Ministry/Government of India/Department of Punjab Govt. /IREDA as the case may
be, for the various incentives/subsidies/ approvals / Clearances, as admissible, from
time to time in the case of the project, after obtaining necessary recommendation
from PEDA.
23. In case the company/promoter or PEDA does not find the project to be feasible from
techno-economic considerations or from any other aspect, or the company does not
start implementation of the project due to any other reasons whatsoever (except
those given in clause 20 above, unless the company / promoter agrees) and after
due and sufficient time and opportunity has been given to the company/promoter, the
project shall revert back to PEDA and the company/promoter shall hand over to the
PEDA all the project reports and any other connected documents etc. as may have
been collected and / or prepared by the company during the course of investigations.
PEDA shall have exclusive right and authority to take back the project and all
relevant documents, project reports etc. without any compensation in such an event
subject to clauses above.
24. Any difference and/or dispute arising at any time between the parties out of this MOU
or interpretation thereof will be endeavored to be resolved by the parties hereto by
mutual negotiations and if the dispute is not satisfactorily resolved within a
reasonable period, the dispute shall be referred to the arbitration and which shall be
in accordance with the Indian Arbitration and Conciliation Act, 1996.
25. The Company/Promoter shall bear the stamp duty for the execution of this MoU.
26. It is agreed that no other payments or security except as contained herein are
payable/executable by the Company/Promoter to the PEDA for carrying out the
investigations or, if found viable, for implementing the projects.
42
IN WITNESS WHERE OF the parties hereto have set their hands unto this on the day,
months and year first above written in the presence of ;
For and on behalf of PEDA For and on behalf of
___________________________ M/s.___________________________
___________________________ ______________________________
___________________________ ______________________________
Witness by : Witness by :
___________________________ ______________________________
___________________________ ______________________________
43
IMPLEMENTATION AGREEMENT
This Agreement made on this ______ day of the ______month of 2007.
BETWEEN
The Government of Punjab, through the Chief Executive, Punjab Energy

Development Agency (PEDA) under the Department of Science, Technology and
Environment of Punjab, having its office at Plot No. 1&2, Sector 33-D, Chandigarh
(hereinafter referred to as the “GOP” which expression unless repugnant to the
context or meaning thereof, shall include his successors, administrators or permitted
assigns), of the FIRST PART;
AND
M/s. ____________________________ a Generating Company, incorporated under

the Companies Act, 1956 (1 of 1956) having its registered office at
__________________________________________________(hereinafter referred
to as “Company” which expression unless repugnant to the context or meaning
thereof, shall include his successors, administrators or permitted assigns), of the
OTHER PART through ________________who has been authorised by the
company vide their resolution dated ________ to execute this agreement.
(Wherever the context so permits or requires the expressions “GOP” and “Company”
are collectively referred to as the “Parties and either or them singly as “Party).
WHEREAS
a) PEDA is the State Nodal Agency for the promotion and development of non-
conventional and renewable sources of energy in the State of Punjab
including small hydro projects up to 25MW capacity.
b) The company had been allotted the site for setting up of a biomass power
project at __________________________________(“Project”) through a
competitive bidding process.
44
c) The company has carried out the necessary detailed survey and
investigations, prepared and submitted its Detail Project Report (DPR) for
implementation of the project having satisfied themselves about the technical
feasibility and commercial viability of the Project.
d) The DPR has been approved by PEDA and the company now agrees to
undertake the implementation of the Project in accordance with the conditions
set forth in this Agreement (“Agreement”).
NOW THEREFORE, in consideration of the premises and mutual covenants and

conditions set forth herein, it is agreed by and between the parties hereto as follows:
1. INTERPRETATIONS AND DEFINITIONS
1.1 Interpretation
1.1.1 The nomenclature of the headings, paragraphs are for the convenience of
reference only and shall be ignored in construing or interpreting this
Agreement.
1.1.2 References to persons and words denoting natural persons shall include
bodies corporate and partnerships, joint ventures and 'statutory and other
authorities and entities.
1.1.3 References to any enactment, ordinance or regulation or any provision thereof
shall include any amendment thereof or any replacement in whole or in part.
1.1.4 Reference to recital(s), article(s), clause(s), sub-clause(s) annexure(s) or

schedules shall unless the context otherwise requires, be the recital(s),
article(s), clause(s), sub-clause(s) annexure(s) or schedules of this
Agreement.
1.1.5 The words importing singulars shall include plurals and vice-versa as may be
necessary.
1.1.6 The annexure and schedules of this Agreement form an integral part of this
Agreement and will be in full force and effect as though they were set out in
the body of this Agreement.
45
1.1.7 Any reference at any time to any agreement, deed, instrument, license or
document of any description shall be construed as reference to that
agreement deed, instrument, license or other document as amended, varied,
supplemented, modified or suspended at the time of such reference provided
that this clause shall not operate so as to increase the-liability or obligations of
any Party hereunder or pursuant hereto in any manner whatsoever.
1.1.8 Any agreement, consent, approval, authorisation, notice, communication,

information or report required under or pursuant to this Agreement from or by
any Party shall be valid and effectual only if it is in writing and under the
hands of a duly authorised representative of such Party in this behalf and not
otherwise.
1.1.9 Any reference to any period commencing “from" a specified day or date and
"till" or "until" a specified day or date shall include both such days and dates.
2. DEFINITIONS:
In this Agreement unless the context otherwise requires or implies the

following expressions shall have the meaning herein respectively assigned to
them:
Agreement Means this agreement together with all

annexure and schedules and any amendments
thereto made in accordance with the provisions
herein contained.
Agreement period Means the period as defined in Clause 4.3
Approvals Means the consents, licenses, permits,

approvals and registrations by or with any
Government agency or any other authority as
may be necessary for setting up and operating
the project including but not limited to the
approvals from GOP, Punjab Pollution Control
Board, Punjab, Irrigation Department (PID),
46
Punjab State Electricity Board (PSEB).
Commencement of Means the date on which the project is capable

commercial of delivering Active power and Reactive power
operations on regular basis after having successfully
completed the commissioning tests as per
Prudent Utility Practices.
DPR Means the Detailed Project Report prepared by

the company and as approved by PEDA or any
revision thereof approved by PEDA.
Debt Component Means the Debt proposed to be raised from

the Financial Institutions/Banks for financing a
part of the Project cost as per the DPR.
Effective Date Means the date of signing of this Agreement.
Financial Closure Means the first business day on which

sufficient funds are available for the
implementation of the project including Debt
component.
GOP Means the government of Punjab and included

all its agencies, authorities under its
control/regulation including but not limited to
PEDA, PSEB, PID.
GOI Means the Government of India and includes

all agencies, authorities under its
control/regulation including but not limited to
Ministry of Non-conventional Energy Sources.
Installed Capacity Means the installed capacity of the project as
47
per the DPR
PEDA Means the Punjab Energy Development

Agency or any of its successors.
PPA Means the Power Purchase Agreement to be

entered between the PSEB and the Company
for sale of power from the project.
PSEB or Board Means the Punjab State electricity Board or

any of its successors.
Project Means the Biomass Power Project to be set up

by the Company at village ___________, Distt.
________ (Punjab) on BOO basis.
Project Cost Means the cost of setting up the project as

given in the DPR.
Prudent Practices Means the Prudent Utility Practices applicable

to Biomass Power Projects.
Prudent Utility Means those practices, methods, techniques

Practices and standards as adopted from time to time
that are generally accepted for use in electric
utility industries taking into account conditions
in India, and commonly used in prudent electric
engineering and operations to design,
engineer, construct, test operate and maintain
equipment lawfully, safely, efficiently and
economically as applicable to generating
stations of the size, service and type of the
Project and that generally conforms to the
48
manufacturers operation and maintenance

guidelines.
2. CONDITIONS PRECEDENT TO AGREEMENT
2.1 Enforcement of Company's obligations

Notwithstanding anything to the contrary contained in this Agreement, it shall
be a Condition precedent to the effectiveness of the Company's obligations
under this Agreement, other than the obligation of the Company to use
reasonable efforts to achieve financial closure, the submission of performance
security deposit and payment of service charges to PEDA, that the Company
shall have obtained all the Approvals.
2.2 Enforcement of the GOP's obligations

Notwithstanding anything to the contrary contained in this Agreement, it shall
be a condition precedent to the effectiveness of the GOP's obligation under
this Agreement, other than the obligation of GOP to use reasonable efforts
and assist the Company in obtaining all Approvals that the following events
shall have occurred:
i) the Company has provided the Performance Security Deposit as
specified in this Agreement and paid service charges to PEDA
ii) all Approvals have been obtained by the Company.
2.3 Time limit for conditions precedent to the Agreement to be fulfilled

If the conditions mentioned in the above clauses have not been satisfied or
waived off within 60 days of the Effective Date and if the Parties in the mean
time have not agreed to extend this time limit, either party may, in its sole
discretion, terminate this Agreement without any liability to the other party,
other than those specified in Clause 3.
3. PERFORMANCE SECURITY AND SERVICE CHARGES
49
3.1 In case the performance security has not been provided by the company in
line with the MoU signed on _________, the Company shall provide a
refundable interest free performance security of Rs. ____ (Rs. ___________)
before signing of this agreement in the shape of bank guarantee in favour of
PEDA for carrying out the objects of this Agreement. The performance
security deposit shall, at the first instance, be valid for a period of 12 months
and shall be renewed from time to time so as to remain valid till the
Commencement of Commercial Operation of the Project. The performance
security shall be refunded to the Company on the Commencement of
Commercial Operation of the Project.
3.2 The Company shall pay to PEDA a sum of equivalent to the 1% of the project
cost as non refundable service charges Within 10 days of the approval of
DPR / Effective Date through a Bank Draft in favour of PEDA payable at
Chandigarh.
3.3 In the event:

i) It is eventually confirmed as impossible or impractical to achieve Financial
Closure or if the Financial Closure is not achieved on or before expiry of 90
days (or such period as may be mutually agreed between, the Parties) from
the Effective Date, for the reasons other than those solely, attributable to
GOP/PEDA and / or the company; or
ii) The conditions precedent to the effectiveness of the Company's obligation as
specified in clause 2.1 are not satisfied within the period stipulated in clause
2.3 for the reason solely attributable to the Company; or
iii) The Company does not commence the construction at the site within 30 days
of the Financial Closure.
iv) The company does not complete and commission the plants within 395 days
of the financial closure for the reasons other than those solely attributable to
Govt. of Punjab/IREDA or beyond reason control of the company.
GOP/PEDA reserves the right to terminate the Agreement and forfeit the
performance security. The Company will hand over to GOP/PEDA, all the
50
project reports, connected/relevant documents, collected/prepared by the

company without any compensation.
TERMS OF AGREEMENT
4.1 General
i) The GOP hereby grants permission to the company to establish,

operate, maintain the Biomass power project on build, own and
operate basis and sell power from this project to PSEB as per
tariff fixed by PSERC.
ii) The company shall have no right to claim any compensation
from PEDA or any other developers for exploitation of Biomass
in other talukas of the state.
iii) PEDA shall not entertain any other similar project to be set up in
the command area of this project so as to avoid any adverse
impact on the sourcing of biomass fuel for this project.
iv) The company shall be permitted to use the site for production of
energy only and not carry any other activity, business, and
transactions, from that area.
v) The company shall not assign or transfer its rights and benefits
to any other third party.
vi) The company shall agree to carry out the investigations as well
as implement the project keeping in view the quality, control
measures as well as safety standards as per laws of the State &
Govt. of India to the maximum extent possible and the company
shall submit to PEDA every month the progress report of
implementation of project.
vii) The company shall ensure that while implementing the project,
the project will not affect any public utility scheme such as
drinking water, irrigation schemes, approach roads / paths etc.
except to the extent required and approved by the concerned
department / authority.
51
viii) That if the company drop their plan for running the plant due to
any reasons whatsoever, then the company shall be bound to
pay the entire fee / charges to PEDA before requesting for the
termination of this agreement.
ix) The company shall take insurance cover from reputed insurance
company as is required by law and prudent utility practices and
that the PEDA shall have nothing to do with safety of persons
and property of the company and shall not be in any way
responsible for any damage that may occur to the power project
or its employees / management.
4.2 Effectiveness
Subject to the provision of the clause 2, this agreement shall come to

force from the effective date.
4.3 Agreement period
This agreement shall remain in force up to a period of 30(thirty) years

from commencement of commercial operations of the project
(agreement period) unless terminated earlier in accordance with the
provisions of the agreement.
4.4 Supplementary Agreements
Agreement with PSEB
The company shall enter into a separate PPA with PSEB after getting
the necessary approval and fixation of tariff from PSERC regarding the
sale of power within 60 days from the date of approval of PSERC. The
PSEB shall purchase the power offered from the project at the terms
and conditions agreed in PPA to be signed by the company with PSEB.
5. OBLIGATIONS OF PEDA/GOP
52
A valid and enforceable PPA shall at all times during the agreement period
cover the sale of energy by the company. Further issues relating to establishment
operation & maintenance of interconnecting facilities for the project and evacuation
of power from the project shall be suitably detailed in the PPA. The PPA shall be an
integral part of the implementation agreement and the parties shall abide by the
same.
5.1 Assistance in obtaining approvals and signing of supplementary

agreement:
i) PEDA shall assist the company in obtaining statutory clearance

to be required from department of Environment and forest, PID,
Punjab Pollution Control Board, PSEB and Central / State Govt.
Subsidies and other facilities, finalisation and expeditious
signing of PPA for sale of power to PSEB.
ii) PEDA shall also depute its personnel for site visits to the project
area along with company personnel.
6. OBLIGATIONS OF THE COMPANY
6.1 Project Implementation:
iii) The company shall implement the project as per time schedule
annexed with this agreement at Annexure-A. In case of undue
delays PEDA at its discretion may forfeit the Performance
Security of the company. However PEDA shall serve a written
notice for forfeiture. PEDA may also choose to terminate this
agreement for unacceptable delays.
iv) The company shall allow access to the authorised

representatives of PEDA to all the locations of project.
v) The company shall submit all applications with regard to project

to PEDA which shall in turn scrutinize and forward the same to
53
concerned Ministry / Govt. of India / Department of Punjab

Government for various incentives, subsidies / approvals
clearance as admissible from time to time in case of project.
6.2 Project Performance
The Company shall design and construct the Project as per

Prudent Utility Practices, relevant technical standards, safety
standards, stipulated quality controls and specifications so as to
ensure that the Project is capable of delivering Active and
Reactive power as per despatch instructions and to operate in
parallel with the PSEB grid System. The Company shall also
ensure the delivery of power to PSEB at the HT side of the
Project at 11/66 KVA in a safe and reliable manner so as to
avoid fluctuations and disturbance to the grid system due to
parallel operation.
The Company shall further ensure that the Project during the
Agreement Period meets all conditions prescribed in accordance
with the Indian Standard(s)/code(s) then in effect and otherwise
meets the Provisions of the Indian Electricity Acts / Rules for
synchronisation with the Board's grid system.
The Company shall operate and, maintain the Project in
accordance with
i) Prudent Utility Practices
ii) All applicable laws and directives of GOP/GOI
iii) The manuals, instructions and manufacturers' guidelines
supplied by construction contractors'/ manufacturers and
suppliers of equipment and the grid technical parameters;
iv) Operating Procedures
6.3 Payments
54
The company shall promptly and upon being called to do so:
i) Shall provide the performance security of Rs. _________ in terms of

the provision of clause 3.1 above.
ii) Shall pay to PEDA a sum equivalent to 0.1% of the project cost of the
Installed Capacity as service charges in terms of the provision of
clause 3.2 above.
iii) Shall pay percentage electricity share to PEDA from electricity sold to
PSEB as per annexed details in annexure-B, which shall be monetary
equivalent at the rate of sale to PSEB on a monthly basis during the
entire Agreement Period. PEDA shall have the right to recover the
Revenue Share directly from PSEB or from the Company. The
Revenue Share payments would be made by PSEB/ Company as the
case may be within seven (7) days from the due date of realisation of
the energy charge by the Company from PSEB. Any delay in making
the payments would carry interest at the rate of SBI prime lending rate
plus 2% per annum on the delayed amount for the period of delay. In
case of third party sale PEDA will install its own meter & metering
equipment at the powerhouse for metering of energy sale to third part.
iv) Shall pay to obtain the statutory approvals, registrations, license fees,
taxes and duties applicable for setting up the project.
v) Shall bear the stamp duty for the execution of this agreement.
6.4 Safety Measures

The Company agrees to carry out the investigations as well as implement the
Project keeping in view the quality control measures as well as safety
standards of the DPR to the maximum extent possible. The Company shall
allow access, to the authorised representatives of GOP/PEDA to all the
locations of the Project to ensure compliance in this respect.
6.5 Alternative Facilities
55
The Company shall ensure that while implementing the Project, the Project
will not affect any public utility scheme such as drinking water, irrigation
schemes, approach roads / paths etc. except to the extent required and
approved by the concerned department/authority. The cost of the remedial
measures shall be a part of the Project cost. The Company shall not interfere
with any of the existing facilities till an alternate facility as identified is created.
6.6 Water requirement for construction:
The company shall ensure that the water requirement for construction of the
project including potable water shall be arranged and harnessed by them from
the canal source with the permission of PID and / or local sources of water
supply.
6.7 Recruitment of Staff

The Company shall ensure that, subject to availability and suitability, all the
unskilled/skilled staff and other non-executives as may be required for
implementation of the Project shall be recruited locally.
6.8 Use of facilities

The Company shall permit usage by the GOP and the general public of all the
alternate facilities of the Project as specified in clause 6.5 including, but not
limited to service roads, bridges constructed and maintained by it for the
Project.
6.9 Usage of Land

The Company shall not transfer, assign the land acquired / leased for the
Project in violation of the terms and conditions of this Agreement.
6.10 Adherence to law
The company shall follow and obtain all necessary clearance / approval under
all the relevant laws, including without limitation, all labour laws, and shall also
provide for safety provisions as per the Indian Electricity Act 2003, Indian
56
Electricity Rules,, Factories Act, 1948, Mines Act, 1952 and such other
statutory provisions relating to the project.
6.11 Project Maintenance
The company shall ensure the project is maintained in accordance with the
manufacturers instructions, procedures, relevant safety code, Indian electricity
Act/Rules and prudent utilities practices and Indian/International Standards
during the Agreement period.
6.12 Company's liability not limited by contractors
Notwithstanding any subletting or subcontracting by the Company; and

notwithstanding that the GOP may have received copies of such sub-
contracts, the Company shall remain solely responsible for the quality of such
execution and performance of all the conditions of the Agreement in all
respects, as if such sub-contracting or sub-letting had not taken place, and as
if the work had been done directly by the Company.
6.13 Insurance coverage
The Company shall take such Insurance cover from reputed Insurance
Companies, as is required by Law and Prudent Utility Practices. The
Company shall indemnify and hold the GOP and its employees 'harmless
from, and against any, and all claims, demands, proceedings, or causes of the
action in respect of.
i) Any death or injury to the personnel of the Company, contractors and third
Parties; and/or
ii) Any loss or damage to the project or the property of the Company, its
personnel or third party;
6.14 Promoter's equity in the Project
57
The Project was allocated under a competitive bidding process and the same
is assigned to the Company with the approval of PEDA. The aggregate equity
contribution of the Company/ promoters of the allottee company/Consortium
to which the project was initially allotted shall not be less than 51% (fifty one
percent) during the construction period and until 3 (three) years following the
commencement of commercial operations.
The Company shall not assign, sublet or transfer its rights and 'benefits
hereunder except as provided in this Agreement without the prior approval of
GOP/PEDA whose approval will not be unreasonably with held.
7. FORCE MAJEURE
7.1 Force Majeure Event
In this Agreement, Force Majeure means an event occurrence in India of any

or all of non-political event described in clause 5.2, 5.3 respectively
hereinafter which prevents the party claiming Force Majeure. (The affected
party) from performing its obligations under this agreement and which act or
event.
i) Is beyond the reasonable control of and not arising out of the

fault of the affected party.
ii) The affected party has been unable to prevent by the exercise of
due diligence and reasonable efforts, skill and care, including
through expenditure of reasonable sum of money and
iii) Has a materially adverse effect on the project.
7.2 Non-political force majeure events
For the purpose of 7.1 non-political force majeure events shall mean one or
more of the following acts or events:
i) Acts of God or events beyond the reasonable control of the

affected party which could not reasonably have been expected
to occur such as extreme adverse weather or environment
58
conditions, lighting, heavy rains, cyclones, tempest, whirlwind,

landslides, storms, floods, volcanic, eruptions or fire (to the
extent originating from the source external to the site or not
designed for in construction works);
ii) Radioactive contamination or ionising radiation;
iii) An act of war (whether declared or undeclared) invasion, armed
conflict or act of foreign enemy, unexpected call up of armed
forces, embargo, blockade, rebellion, riot religious strike, bombs
or civil commotion, sabotage terrorism;
iv) Strikes or boycotts interrupting operations of the project;
v) Any judgement or order of any court of competent jurisdiction or
statutory authority in India made against the company in any
proceedings for the reason other than failure of the company to
comply with any applicable law or clearance or on account of
breach thereof, with any applicable law or clearance or on
account of breach thereof, or of any contract, or enforcement of
this Agreement or exercise of any of its rights under this
Agreement by PEDA; or
vi) Any other event or circumstances of nature analogues to the
foregoing.
7.3 Political Force Majeure Event
For the purpose of 5.1 Political Events shall mean one or more of the
following acts or events by or an account of PEDA, GOP, GOI or any
other Government Agency or Statutory Authority.
i) Change in law.
ii) Expropriation or compulsory confiscation, by any Government
Agency of any Project Assets or rights of the company.
iii) The unlawful or un-authorised or without jurisdiction revocation
of, or refusal to renew or grant without valid clause any consent
or approval required by the company to perform its obligations
under the Agreement (Other than a consent the obtaining of
which is a condition precedent) provided that such delay,
59
modification, denial, refusal or revocation did not result from the

company’s inability or failure to comply with any condition
relating to grant, maintenance or renewal of such consent or
permits.
7.4 Notification obligations
If a party is affected by any force Majeure event, the affected

party shall give the other parties written notice describing the
particulars of the Force Majeure event as soon as reasonably
practicable after its occurrence but not later than five days after
the date on which such party knew of the commencement of the
Force Majeure event or of its effect on such party.
7.5 Obligations of the parties in case of Force Majeure event:
i) The parties shall cooperate and negotiate in good faith and will
develop implementation plan of remedial and reasonable
alternative measures to remove / remedy Force Majeure event
to enable the performance of the affected party provided
however, that no party shall be required under this provision to
settle strike or other labour dispute.
ii) Upon the occurrence and during the subsistence of any Force
Majeure event, none of the parties shall be relieved of their
liabilities/obligations including liability for payment as per the
Agreement.
iii) In case a Non-political force majeure event necessitates
extension of time for the Project implementation both the parties
will duly accept it.
iv) The extra cost for completion of Project due to a non-political
force majeure event including interalia, additional or extra work
required to be done, interest due during the extended period of
project completion and escalation shall be duly considered in the
project completion cost for all purposes of the agreement.
60
v) In case of Force Majeure events after completion of the project

the parties shall take action as per sub clause (I) above and the
additional cost required for remedial and alternative measures to
remove/remedy the force majeure shall be added to the project
completion cost for all purpose of the agreement.
vi) In case of any party not willing to implement the plan of remedial
and reasonable alternative measure to remove/remedy the force
majeure event it shall be construed as a default of such party
and then relevant provisions of clause 7 shall apply.
vii) The suspension of performance shall be within the effected
scope and duration as required by force majeure.
viii) When the non performing parties liable to resume performance
of its obligation under this agreement that party shall give the
other parties written notice to that affected so as soon as
practicable.
8 DEFAULTS
8.1 GOP Default
The occurrence and continuation of the following events shall

constitute a GOP default unless such an event occurs as a result of a
company default as defined in clause 8.2.
i) GOP repudiates this agreement or otherwise evidences an

intention not to perform its obligations under, or to be bound by
this agreement and / or the PPA.
ii) Occurrence of a political force majeure event.
iii) The material breach by GOP of any term of this agreement other
than with respect to sub clause (i) above.
8.2 Company default
61
The occurrence and continuation of any of the following events shall

constitute “Company Default” unless any such event occurs as a result,
of a GOP default as defined in Clause 8.1
i) The company repudiates the Agreement or otherwise evidences
an intention not to perform its obligations under, or to be bound
by this agreement.
ii) The company fails to make payments in respect of its obligation
under the agreement for more than 30 days.
iii) The company assigns all or part of its rights or its obligations
under this agreement or transfer its assets in violation of any of
the provisions of this agreement.
iv) The company abandons the implementation of the project
including withdrawing all, or a substantial, number of personnel
from the site, for reasons other than force majeure for a
continuous period of more than ninety days, provided that
company shall not be deemed to have abandoned the project so
long as in the reasonable opinion of the GOP, it is using its best
efforts to regain control or to restart construction or operation of
the project as the case may be.
v) The transfer pursuant to law of either the company’s rights and
or its obligations under this agreement of all or a substantial
portion of the company’s assets or undertakings of the
dissolution of the company pursuant to law including, by way or
merger or consolidation, liquidation and reconstitution or re-
organization unless (i) the transferee or successor of the
company expressly assumes the obligations of the company
under this agreement and (ii) the transferee or successor in
interest of the company has a credit worthiness in the
reasonable opinion of GOP at least equal to that of the company
and is other wise fully capable of performing obligations of the
company under this agreement.
vi) The material breaches by the company of any terms of this
agreement other than with respect to sub clause (i) and (ii)
above.
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8.3 CURE PERIOD
i) Upon occurrence of a default by a party pursuant to Clauses 8.1

or 8.2 (Defaulting party) the other party (Non defaulting party)
has the right to issue a default notice.
ii) On receipt of the default notice, the defaulting party shall take
immediate steps to cure such a default within a period of ninety
90 days from the receipt of the default notice with due notice to
the non-defaulting party of steps taken by it to cure the above
default.
iii) In the event the reasons leading to the default have been cured
to the reasonable satisfaction of the non-defaulting party, the
default notice shall cease to have any effect.
iv) In the event the defaulting party unable to cure the default to the
reasonable satisfaction of the non-defaulting party within the
period specified in Sub Clause 8.3(ii) above, the provisions of
the clause 8.4 or 8.5 shall apply as the case may be.
8.4. Remedies available to the Company
Upon the occurrence and continuation of a GOP default under clause

8.1 above, and the failure by the GOP to cure such a default within the
applicable cure period, if any specified in clause 8.3 the company shall
have the right to terminate this agreement by notice to the GOP in
accordance with the procedures set forth in clause 9 subject to the cure
rights therein.
8.5. Remedies available to the GOP
Upon the occurrence, and continuation of a company default under

clause 8.2 above, and the failure by the company to cure such a
default within the applicable cure periods, if any specified in clause 8.3
the GOP shall have the right to terminate this agreement by notice to
63
the company in accordance with the procedure set forth in clause 9

subject to the cure rights therein.
9. TERMINATION
9.1 (a) This agreement may be terminated on serving a thirty days notice
(Termination notice) by
i) the company in the event of GOP default pursuant to clause 8.4

ii) the GOP in event of the company’s default pursuant to clause
8.5
iii) Either party, not withstanding any thing contained in clause 7 if
either party is unable to perform any obligations required to be
performed under this agreement due to non political force
majeure for a continuous period of 6 months.
iv) Either party in the event it is eventuality confirmed as not
possible and impractical that the financial closure can not be
achieved or failure to achieve or on before 90 days (or such
period as may be mutually agreed between the parties) from the
effective date.
v) The company does not commence the construction at a site
within 30 days of financial closure.
vi) That company does not complete and commission the plant as
set out in the implementation schedule in Annexure-A for the
reasons other than these solely attributable to Govt. of Punjab /
Financial Institution or beyond reasonable control of the
company.
vii) The company in the event of enactment of any law or regulation
of any subsequent act of any Governmental authority, which
makes the performance of this agreement impossible for any
party.
viii) Either party, in the event of non-fulfilment of conditions precedent as

per clause 2; and
ix) The GOP in pursuance of the provisions as set out in clause 3.
64
9.1(b) On the expiry of the termination notice, the party which served the
termination notice, shall be entitled to terminate this agreement under
intimation to the other party, unless the event leading to the termination
notice has been rectified or complied with to the satisfaction of the
party which issued the termination notice.
9.2 Termination of the agreement shall be without prejudice to the accrued

rights and liabilities of the parties as on the date of the termination
unless waived in writing by the parties.
9.3 In the event that this agreement is terminated prior to the start of the
construction of the project, all rights of the company shall revert back to
the GOP/PEDA.
9.4 If this agreement is terminated pursuant to sub clause (iv) Financial

closure (vii) enactment of law and (v), (vi), company’s all obligations of
clause 9.1(a) above then, subject to clause 9.3 except for service
charges and performance security etc. of the company under clause 3,
neither party shall have any obligation or liability to the other party
whether at law hereunder or otherwise and the rights of the parties
hereunder shall terminate and be of no force or effect.
10. REPRESENTATION AND WARRANTIES
10.1 GOP hereby represents and warrants to the company
i) That GOP has the power to execute, deliver and perform fully all
its obligations and liabilities under this agreement and
ii) That the execution, delivery and performance by the GOP of this
agreement will not violate any court, provision of any existing
law or notification or regulation or order or decree of any court,
governmental authority, or agency or any contract undertaking
or agreement to which GOP is a party/binding on GOP and will
65
not result in the imposition or creation of any lien, charge or

encumbrance or party thereof.
10.2 The company hereby represents and warrants to Govt. of Punjab
that:
i) It is duly organised, validly existing and in good standing under

the laws of the jurisdiction of its incorporation;
ii) It has full power and authority to execute, deliver and perform its
obligations under this Agreement and to carry out the
transactions contemplated hereby;
iii) It has taken all necessary corporate and other action under
Applicable Laws and its constitutional documents to authorise
the execution, delivery and performance of this Agreement;
iv) It has the financial standing and capacity to undertake the
Project;
v) This Agreement constitutes its legal, valid and binding obligation
enforceable against it in accordance with the terms hereof;
vi) it is subject to civil and commercial laws of India with respect to
this Agreement and it hereby expressly and irrevocably waives
any immunity in any jurisdiction in respect thereof;
vii) All the information furnished in the execution, delivery and
performance of this Agreement will not conflict with, result in the
breach of, constitute a default under or accelerate performance
required by any of the terms of the Company’s Memorandum
and Articles of Association or any Applicable Laws or any
covenant, agreement, understanding, decree or order to which it
is a party or by which it or any of its properties or assets is
bound or affected;
viii) The BOO Operator has complied with all Applicable Laws and
has not been subject to any fines, penalties, injunctive relief or
any other Civil or criminal liabilities which in the aggregate have
or may have material adverse effect on its financial condition or
its ability to perform its obligations and duties under this
Agreement;
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11 INDEMNITY
11.1 The company shall bear the responsibility, for any third party claim
action of any proceedings of whatsoever nature (including without
limitation those initiated by any statutory authority, court or tribunal or
government agency against the GOP its officers and employees in
respect of any loss of or damages to the property death or injury to the
person together with all expenses relating thereto (including without
limitation all legal fees) arising out of or in relation to the design,
constructions, ownership operation and maintenance of the project etc.
or omission of the company, contractors or their sub contractors or the
lenders to comply with the applicable laws, without recourse to the
GOP and the company shall hold GOP, its officers and employees fully
indemnified in respect thereof.
11.2 GOP/PEDA shall notify the company of any claim, action or

proceedings in respect of which it is entitled to be indemnified under
this clause. Such notice within 60 days shall be given after GOP/PEDA
becomes aware of such claims, action or proceedings.
11.3 GOP shall have the right, but not the obligation to defend and litigate
(and to retain the legal advisors of its choice in connection therewith)
any claim action or proceedings alleged or asserted against GOP its
officers or its employees in respect of which it is indemnified under this
clause, and the reasonable costs and expenses thereof shall be
subject to such indemnify provided that the company shall be entitled
at its option, and it permitted by law, to assume and control the conduct
and defence of such claim, action or proceedings at its expenses and
through its own legal advisors if it.
a) Gives notice of its intention to do so to GOP/
b) Acknowledges to GOP in writing its obligation to indemnify GOP
of its officers or employees or all of them both in their official
67
capacity as the case may be as provided under this clause 9

and
c) Reimburse the government for the reasonable costs and legal
fees incurred so far by GOP prior to the assumption of the
defence by the company, GOP shall not compromise or settle
any claim, action or proceedings in respect of which it is entitled
to be indemnified under this clause without prior consent of the
company.
12 RESOLUTION OF DISPUTES
12.1 The parties shall attempt to resolve any dispute, arising out of or in
connection with this agreement (hereinafter referred as the dispute) by
mutual discussion. In the event that any dispute cannot be resolved
between the parties with in a period of 30 days of the commencement
of the discussions, then such dispute shall be settled under the
Arbitration & Reconciliation Act 1996. The arbitration shall be
conducted at Chandigarh, India in English language. Any award given
by the arbitrators shall be final and binding on the parties and shall be
in lieu of any other remedy within the meaning of arbitration and
reconciliation Act’1996.
12.2 The matter would be referred to an arbitral tribunal of three arbitrators.

Each party shall appoint one arbitrator who shall act as the Chairman
of the arbitral tribunal, in the event either party failing to appoint the
arbitrator or the two arbitrators failing to appoint the Chairman of the
arbitral tribunal the appointment of the arbitrators or the Chairman as
the case may be shall be done in accordance with arbitration &
reconciliation act’1996. The tribunal shall give a speaking award. The
cost and expenses of this arbitration shall be allocated as determined
by the arbitrators.
68
12.3 Neither party shall resort to any proceeding in the court except for the
enforcement of award in respect of a dispute having first exhausted the
remedy under this clause.
12.4 During the subsistence of the arbitration proceedings both parties shall
continue to perform their respective obligations under this agreement
provided that the right of either party to terminate this agreement in
accordance with the provisions thereof, shall not be effected by the
subsistence of arbitration proceedings.
13 Miscellaneous
13.1 Good faith

Both the Parties shall do and execute all such acts, deeds, assurances
and things as may be necessary and proper for carrying out the terms
of this Agreement. The Parties agree to negotiate and enter into such
agreements as may be required to give effect to the understanding
reached herein
13.2 Further Assurance

The Parties shall, and shall use their respective reasonable endeavors
to procure that any necessary third parties shall, do, execute and
perform all such further deeds, documents assurances, acts and things
as any of the Parties hereto may reasonably require by notice in writing
to the others to carry the provisions of this Agreement and the clauses
into full force and effect.
13.3 No Partnership
Nothing in this Agreement shall constitute or be deemed to constitute a
partnership between any of the Parties hereto and none of them shall
have any authority to bind the other in any way.
13.4 Waiver
No failure to exercise and no delay in exercising on the part of the party
of any right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise of any right, power or
69
privilege prelude any other or further exercise thereof or the exercise of

any right, power or privilege. The rights and remedies provided in this
agreement are cumulative and not exclusive of any rights or remedies
otherwise provided by law.
13.5 Severability
Notwithstanding that any provision of this agreement may prove to be
illegal or unforceable the remaining provisions of this agreement shall
continue in full force and effect. Parties shall in good faith negotiate
and agree upon a replacement provisions which shall be as close as
permissible in law to such a provision.
13.6 Survival
The termination or expiry of this agreement shall not affect the accrued
rights, obligations and liabilities of the either party under this agreement
nor shall it affect any continuing obligation, which this agreement
provides, whether expressly or by necessary implication.
13.7 Confidentiality
The parties shall on a confidential basis at all times forthwith provide to
each other information as is available and is necessary or useful to
enable each party to perform its obligation under this agreement. Each
of the parties may however, use or disclose confidential information to
a third party to the extent necessary for the performance of and control
of the financing, construction and operation of the project, subject to
prior consent from the other party, provided that the either party may
disclose any such confidential information without the consent of the
other party to a Government Agency.
Upon the transfer of the reports and studies prepared as a result of

investigations and geological surveys conducted by GOP in respect of
the site to the company neither party shall disclose such reports and
studies to any third party or publish the same in any manner except
with the prior approval of the other party.
70
The parties hereto shall pass their directors, officers, employees,

servant’s agents and contractors to be similarly bound by the convent
specified in this clause above.
13.8 Governing law

The rights and obligations of the parties under or pursuant to this
agreement shall be governed by and constructed according to Indian
law. This agreement shall be subject to the jurisdiction of the courts at
Punjab.
13.9 Assignment
The company shall not sublet or transfer its rights accrued under this
agreement to any third party except for the purpose of arranging or re-
arranging finance for the project.
13.10 Communication
Any communication to be made by one party to the other party under
this agreement shall be validly made when delivered in writing by hand
or through fax or through regd. Mail.
71
The communication shall be addresses as below:

If to the company
Director
M/s.
If to GOP
Chief Executive
Punjab Energy Development Agency
Plot No. 1&2, Sector 33-D
Chandigarh – 160 034
Any party may be notice, change the address and communication are to be
delivered or mailed.
13.11 Headings
That the heading or titles of the several sections hereof are for
convenient of reference and shall not effect the construction or
interpretation of this agreement.
13.12 Amendment
No amendment or waiver of any provision of the agreement and no

consent to any departure by either party here from, shall in any event
be effective unless the same shall be in writing and signed by each of
the parties.
13.13 Successors bound
This agreement shall be binding on and shall ensure for the benefits of
the successors of the parties.
72
13.14 Continuing Agreement
All provisions of the agreement shall so far as they are capable of

being performed and observed continue in full force and effect except
in respect of those matters then already performed.
In witness whereof, the parties hereto have executed and delivered this agreement
in the presence of witnesses at Chandigarh, India on the date, first month and year
written above,
For and on behalf of For and on behalf of

Governor of Punjab M/s.______________.
Director Director
Punjab Energy Development Agency M/s.
Witnessed by: Witnessed by:

1. 1.
2. 2.
73
PART I PUNJAB GOVT. GAZ., DECEMBER 8, 2006 ( AGHN. 17, 1928 SAKA)
DEPARTMENT OF SCIENCE, TECHNOLOGY, ENVIRONMENT

AND NON-CONVENTIONAL ENERGY
NOTIFICATION
The 24th November,2006
No.10/106/2006-STE(1)/5390 The Governor of Punjab is pleased to formulate a

'New and Renewable Sources of Energy (NRSE) Policy – 2006’, aiming at a
sustainable economy based on conventional as well as renewable energy. In this
direction it is necessary to develop and promote new and renewable sources of
energy based technologies and energy conservation measures, thereby addressing
the problems arising from depletion of conventional sources of energy and
environment pollution. Under the NRSE Policy – 2006 the Government of Punjab
offers financial and fiscal incentives described hereinafter;
I. Objectives of the Policy:
Punjab has considerable potential in NRSE sector, which is yet to be

harnessed. With a view to maximise the utilisation of the potential of these
resources, this policy is formulated to achieve the following objectives:
 To enhance the contribution of renewable energy for socio – economic
development.
 To meet and supplement minimum rural energy needs through sustainable

NRSE programmes.
 To provide decentralized energy supply for agriculture, industry,

commercial and household sector.
 To improve the quality of grid power generation through NRSE projects.
 To reduce and mitigate the environment pollution caused by the fossil

fuels.
 To support development, demonstration and commercialization of new and

emerging technologies project in renewable energy sector such as fuel
cell, hydrogen and chemical energy, alternate fuel for transportation etc.
74
and to support establishment of linkages for collaborative and cooperative

projects with national and international institutions.
 To create conditions conducive for the involvement of private investors in

NRSE projects.
 To create public awareness through a vigorous publicity drive in the mass

media.
 To create direct and indirect employment opportunities for the youth in

appropriate NRSE projects in the State.
II. Targets:
The State Government lays down hereby the following targets in the NRSE
sector:
 To add generation capacity of 1000 MW by the year 2020 bringing the

share of NRSE to the level of 10% of conventional power.
 Given the current consumption per unit of economic and social activity, to
motivate all sectors of the economy to ensure conservation of energy to
the extent of 20% by the year 2020.
III. Measures to be adopted:
In order to fulfill the above specific targets, the following measures are
proposed for encouraging:
 Power generation through Small/Micro Hydel projects.
 Co-generation in industries such as Sugar, Paper, Fertilizer and Chemical etc.
 Power generation from Biomass / Agricultural residue.
 Power generation from urban, municipal and industrial waste.
 Power generation from solar energy.
 Power generation from wind energy.
 Energy conservation in domestic, agriculture, industrial and transport sector

through induction of administrative/statutory/legislative action imposing
75
stringent conditions for all categories of consumers beginning with

government itself.
 In case the electrical power generated by the projects set up under the New
and Renewable sources of Energy (NRSE) Policy in the State, is less than
10% of the conventional power, State Electricity Utility (PSEB)/ licensees can
purchase power from NRSE projects set up outside the State in the Northern
Region at the same tariff applicable to NRSE projects within the State.
IV. Thrust Areas :
Given the geographical location of the State of Punjab, and its access to
various sources of energy, the State would promote investment through
private/public sector participation in the following areas:
1. Small/ Micro Hydro projects:

By virtue of its topographic location the State has an extensive irrigation
canal network with untapped estimated potential of 200MW. The State
Government is committed to exploit the total potential by the year 2012.
In addition to the sites already identified by PEDA, private investors may
also apply for self identified sites in case of small/ micro hydel projects if
the same are not included in the list of projects identified by PEDA.
2. Co-generation:
State of Punjab has an established industrial base, which is expanding.
The Sugar, paper, fertilizer chemical, textile and other industries are
having an estimated potential of 220 MW. Adoption of co-generation by
these industrial units/undertakings would not only augment the state grid
capacity by about 220 MW but would also create conducive conditions
for improving their financial health and resources. Cogeneration projects
of 67 Bar pressure and above with the qualifying criteria i.e. for the co-
generation facility to qualify under topping cycle mode, the sum of useful
power output and one half the useful thermal output be greater than 45%
of the facility’s energy consumption, shall only be eligible for
consideration under this policy. This potential would be exploited by the
year 2012.
3. Power generation from Biomass/Agro residue and waste:
76
Punjab economy is mainly agricultural based. It is estimated that about

22.65 million tons of agro residues and agro industrial/processing waste
is produced annually. It is mostly either underutilized or wasted, though
it holds promising potential for generating decentralized power of more
than 1500 MW. The State Government is committed to support and
facilitate harnessing this potential by the year 2020. These biomass
power projects shall be allocated through competitive bidding route and
only one project shall be allocated in Tehsil (Taluka) in the state so as to
provide for a sufficient command area for biomass resource as fuel for
the project.
4. Power Generation from Urban, Municipal and Industrial Liquid/

Solid Waste:
At present about 5000 Metric tons of Municipal, Urban and Industrial

solid waste is being produced every day in the urban areas of the
State, which can lead to power generation of 100 MW through waste to
energy projects. Introducing scientific processing and treatment of this
quantity of waste leads to power generation besides being
environmentally benign. Five such projects shall be supported.
5. Power generation from Solar Energy:
The State is endowed with vast potential of solar energy estimated at

4-7 KWH / Sq mtr of solar insolation levels and the Government is keen
to tap this resource for strengthening power infrastructure in the State
by setting up Solar energy based power projects.
6. Wind Power :
There is possibility of sufficient wind power potential being available at
higher heights in the State, which can be harnessed with the
improvement in low speed wind power technology. There is immediate
necessity for wind mapping in the State to assess and exploit the
available potential. The state will support such programs. Self identified
projects in this sector shall be promoted by allowing private developers
77
to set up wind power projects on first come first served basis on the
basis of wind data assessment carried out by them .
7. Energy Conservation:
Conservation of energy in domestic, commercial, agriculture,
transportation and industrial sectors may lead to major savings in terms
of reduced energy / power consumption thereby leading to bridging the
energy demand supply gap in the state. The State Government is
committed to introduce effective energy conservation measures in all
sectors of economy. Energy Conservation Measures shall be
implemented and enforced in the state in accordance with the
provisions contained in the Energy Conservation Act, 2001 by PEDA,
which is the Designated Agency, notified under the Act by the State
Govt. in consultation with Bureau of Energy Efficiency, Ministry of
Power, Government of India.
V. INCENTIVES :
1. If Government land is available, the required land for setting up (NRSE
projects) will be provided on nominal lease rent of rupees one per square
meter for a period of 33 years subject to further renewal on mutually
agreed terms and conditions. Wherever the land belongs to local bodies/
Gram Panchayat, the State would encourage them to provide the land
for NRSE project on similar terms and conditions. Agricultural land shall
be allowed to be used for setting up of Renewable Energy Power
Projects in the state and no conversion charges for the same shall be
charged by the Town & Country Planning Deptt.
2. To promote manufacturing and sale of NRSE devices/ systems, and

equipments/ machinery required for NRSE Power Projects, Value Added
Tax (VAT) shall be levied @ 4%.
3. Octroi on energy generation and NRSE devices/ equipment/ machinery

for NRSE Power Projects shall be exempted.
4. A Renewable Energy Corpus fund already created under the NRSE

Policy 2001 in Punjab Energy Development Agency shall be
78
strengthened by realization from sales of energy share made available to

PEDA by the developers of NRSE projects including Small Hydro
Projects through Competitive Bidding route and self identified
small/micro hydel projects. The private investors / companies which are
allocated self identified sites in case of small/micro hydel projects and
wind power projects shall pay to PEDA a minimum energy share at the
following rates:
Upto 500 KW capacity : 5% energy share

Upto 501 – 1000 KW capacity : 7.5% energy share
1001KW capacity & above : 10% energy share
This corpus fund would be utilized for the specific purpose of
development of renewable energy sector such as:
a) R and D in NRSE programs including new and emerging
technology areas.
b) Development in pilot/ demonstration projects in NRSE sector.
c) Assist and undertake activities towards commercialization of

NRSE projects and programs.
This Corpus will be operated and maintained by the state nodal agency
i.e. Punjab Energy Development Agency.
5. Punjab State Electricity Board will purchase electricity in whole or part

offered by the power producer without any restriction of time or quantum
to ensure full utilization of NRSE.
6. The Private Developer at its own cost shall provide the evacuation
system including transmission lines for purchase of energy from the
generation site.
7. For use of river/ canal water, cess @ one paisa per unit of electricity
generated will be charged to all hydel projects (upto 25 MW installed
capacity) developed by the private developer. The private developer
shall deposit the amount on account of this cess on monthly basis to
Punjab Irrigation Department.
79
8. For providing administrative support for obtaining statutory clearances at

various levels and financial and technical assistance and motivating
private developers, the facilitation service charges @ 0.1% of the project
cost as per DPR will be charged by the State Nodal Agency (i.e. PEDA)
on all NRSE projects.
9. The State Govt has notified PEDA as the state nodal agency for carbon
credits under the Clean Development Mechanism (CDM). All project
developers (Private as well as Govt) can seek assistance of PEDA in
terms of seeking carbon credits under CDM for NRSE projects.
The various fiscal and financial incentives available for setting up NRSE power
projects are detailed in Appendix-II.
VI. CLEARANCE FOR NRSE PROJECTS:
Single Window Clearance Empowered Committee:
Setting up of NRSE projects involves sanctions/clearances from a number of

Government Agencies/Departments. The State Government shall provide the
clearances in a time bound manner through a single window mechanism
within a period of 60 days. The Detailed procedure for according
approvals/clearances and composition of empowered committee are annexed
at Appendix-I.
VII. ALLOTMENT OF PROJECTS :
The complete transparency in allotment of the projects shall be ensured for

evaluation of tenders. A comprehensive tender document shall be designed
for inviting bids listing out technical and financial parameters of the potential
eligible bidders, which would be approved by the Board of Punjab Energy
Development Agency. On the basis of financial & technical parameters
contained in the tender document, bids would be invited and evaluated by an
expert technical committee appointed by the Board of Punjab Energy
Development Agency.
VIII. Nodal Agency:
80
Punjab Energy Development Agency (PEDA) will be the nodal agency for the
implementation of the NRSE Policy. PEDA will be responsible for laying down
the procedure for inviting of proposals from Independent Power Producers
(IPP’s), DPR, evaluation of project proposals, project approvals , project
implementation , operation & monitoring.
IX. Amendments/ Relaxation/ Interpretation of Provisions of the Policies:
Principal Secretary to Government of Punjab, Department of Science,

Technology, Environment and Non-Conventional Energy shall be vested with
powers to amend/ relax/ interpret provisions under the policy in consultation
with the concerned Government Departments/Agencies.
X. APPLICABILITY:
The Policy and Incentives would be effective from the date of notification of
this policy in the official gazette of Punjab Government for a period of five
years.. However, this policy shall remain in operation till the Government
notifies the new policy. For giving effect to this policy, necessary
amendments in various enactments, wherever necessary, shall be
expeditiously undertaken by the concerned departments.
81
APPENDIX-1
CONSTITUTION OF EMPOWERED COMMITTEE

A. Composition of Empowered Committee :
The Empowered Committee of Administrative Secretaries for according

approvals/clearances is constituted as under:
I) Chief Secretary to Government of Punjab - Chairman
II) Principal Secretary to Government of Punjab, - Member

Department of Science, Technology,
Environment and Non-Conventional Energy.
III) Principal Secretary to Government of Punjab, - Member
Department of Finance.
IV) Principal Secretary to Government of Punjab, - Member

Department of Irrigation.
V) Principal Secretary to Government of Punjab, - Member

Department of Power.
VI) Principal Secretary to Government of Punjab, - Member

Department of Forests.
VII) Principal Secretary to Government of Punjab, - Member

Department of Industries & Commerce.
VIII) Chairman, Punjab State Electricity Board. - Member
IX) Advisor (concerned), Ministry of Non-Conventional - Member

Energy Sources, Government of India.
X) Chief Executive, Punjab Energy Development - Convener

Agency.
The Committee may co-opt other Administrative Secretaries/ State

Government officials as and when required (e.g. Principal Secretary, Local
Bodies, Rural Development etc.) in respect of projects in their respective
jurisdiction. The Committee will also oversee implementation of this Policy by
the Departments/ Agencies.
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B. Procedure for Clearances/Approvals :
Empowered Committee for Approval/Clearances for NRSE Projects :
With a view to accelerate development of NRSE projects, there is a

need to establish a Single Window Mechanism. All necessary and applicable
approvals/clearances (viz. Environment, Forest Land, Pollution Control, water,
use of NRSE resources and Investment Clearance etc.) required for a project
would be considered for such applicable clearances and approvals in a time
bound manner (within a period of 60 days from the date of submission of
complete application along with requisite fee as per the requirement of
approval /clearance issuing bodies / departments. The applications for NRSE
projects would be required to be submitted to the Secretariat of the aforesaid
Empowered Committee established in PEDA.
The Secretariat will forward the applications to the relevant Department

for their consideration and concerned department will convey their
approval/clearance or comments, if any with in the stipulated time period of 45
days from the date of forwarding the application. In case, the concerned
department fails to respond within the stipulated time of 45 days, necessary
concurrence/approval/clearance to the project will be deemed to have been
granted. Representative(s) of the concerned department will participate in the
meeting of Empowered Committee to elaborate their comments/observations,
if any, for consideration of the committee. The secretariat will bring up the
agenda items inclusive of the comments of the concerned Department if any
along with its internal assessment/note on the subject. The Empowered
Committee would take appropriate view and decision for according its
approval/clearances within the stipulated period. The decision of the
Empowered Committee shall be final and binding on all concerned
departments. Private developers shall file petition in the PSERC for tariff
approval within 15 days after signing of the implementation agreement with
PEDA and PSEB/LICENSEES shall sign the Power Purchase Agreement
after the issue of tariff order by the PSERC within 45 days of the submission
of requisite documents by the developers.
83
However, complete transparency in evaluation of tenders, keeping in view the

financial and technical parameters and in allotment of projects shall be
resorted to. A comprehensive tender document shall be designed for inviting
bids listing out technical and financial parameters of the potential eligible
bidders, which would be approved by the Board of Punjab Energy
Development Agency. On the basis of bidding and evaluation parameters
contained in the tender document, bids would be invited and evaluated by an
expert technical committee appointed by the Board of Punjab Energy
Development Agency.
84
APPENDIX-II
FISCAL AND FINANCIAL INCENTIVES
CODE UNDER NRSE POLICY – 2006
With the objective to promote and develop NRSE programme/ projects, the
State Government will provide the following financial and fiscal incentives for energy
recovery and power generation projects based on NRSE, to be set up in the State to
the eligible power producers.
1. Operative period :
The scheme for promotional fiscal and financial incentives will come
into operation with immediate effect from the date of publication of this
notification in the official gazette and will remain in force till five years.
However, this policy shall remain in operation till the Government
amends or notifies the new policy
2. Eligible Producers :
Those generating electricity from non-conventional energy sources such

as small hydro projects upto 25MW, biomass combustion and
gasification, Co-generation, Solar Photovoltaic, Solar Thermal, Urban,
Municipal and Industrial Waste, Wind Electric Generators and New
technologies like fuel cells of any capacity, bio-fuels etc. will be eligible to
avail these incentives under the scheme. There will be no restriction on
generation capacity or supply of electricity to the State grid. The state
nodal agency, Boards/Corporations, Private developers, companies,
Consortia or Co-operatives will also be eligible for availing incentives
under this scheme. In addition to the sites already identified by PEDA for
Micro Hydel Projects, private investors may also apply for self identified
sites, not included in the list of projects identified by PEDA. Self identified
projects in wind energy sector shall be promoted by allowing private
developers to set up wind power projects on first come first served basis.
3. Grid Interfacing :
85
i) Interfacing, including installation of transformers, panels, Kiosks,

protection and metering on HT side of the generating station and its
subsequent maintenance shall be undertaken by the power
producer/plant owner. Punjab State Electricity Board
(PSEB/LICENSEES) shall provide jumpers to the line at the buy end
located at the end of transmission line of the generating station, for
evacuation of power to PSEB/LICENSEES grid substation.
ii) The private developer shall be required to lay its own transmission
lines from the switchyard of its generation facility to the
PSEB/LICENSEES grid sub-station at its own cost in addition to all
equipment required for evacuation of power in its own generating
facility switchyard. All Associated equipment(s) at the
PSEB/LICENSEES grid substation for accepting energy from the
project including up gradation required if any shall be provided by the
PSEB/LICENSEES.
iii) Producer will install two separate meters, one for the export of power to
the grid and another for import from the grid, on the HT side. The
meters and metering boxes will be sealed by the PSEB/LICENSEES.
iv) Necessary current limiting devices such as thyristors will be installed in

the generating equipment by the producer. Producer shall generate
matching MVARs so that monthly average power factor does not
exceed 0.88.
v) PSEB/LICENSEES will clear dues with in a month. Delay in payments

will attract interest @ State Bank of India short term Prime Lending
Rate plus 2%.
vi) The generating unit and also the user unit will be required to enter into
separate agreement with PSEB/any other licensee for the sale of
power after issue of the tariff order by PSERC.
vii) NRSE Project generators, suppliers and distributors shall ensure that
their installation confirms to the State Grid Code notified by PSERC.
86
4. Facilities by Punjab State Electricity Board :
i) Wheeling : The PSEB/LICENSEES will undertake to transmit through

its grid the power generated from NRSE projects set up inside or
outside the State and make it available to the producer for captive use
in the same company units located in the state or third party sale within
the State at a uniform wheeling charge of 2% of the energy fed to the
grid, irrespective of the distance from the generating station. Separate
tripartite Agreement will be executed between the company,
PSEB/LICENSEES and third party(s) laying down the procedure for
apportionment of energy and other commercial clauses in respect of
energy to be wheeled to third party(s). However private developers
shall be required to file a petition in the PSERC for approval of
wheeling charges.
ii) Sale of Power : The rate of sale of power to the PSEB/ Licensees
from NRSE projects set up in the State as well as within the “Northern
Regional Power System” * for which MOU’s shall be signed under this
policy, will be as under:-
a) Mini/Micro Hydel Projects - Rs. 3.49 per unit (Base Year 2006-
07) with five annual escalations @ 3% upto 2011-2012.
b) Baggasse/ Biomass Cogeneration Projects- Rs. 3.49 per unit (Base

Year 2006-07) with five annual escalations @ 3% upto 2011-2012.
c) Biomass Power Projects - Rs. 3.49 per unit (Base Year 2006-
07) with five annual escalations @ 5% upto 2011-2012.
d) Power Generation from Urban, Municipal and Industrial Liquid/

Solid Waste - Rs. 3.49 per unit (Base Year 2006-07) with five
annual escalations @ 5% upto 2011-2012.
e) Power generation from Solar Energy - Rs. 7.00 per unit (Base Year
2006-07) with five annual escalations @ 5% upto 2011-2012.
f) Wind Power Projects- Rs. 3.49 per unit (Base Year 2006-07) with
five annual escalations @ 5% upto 2011-2012.
87
At the end of the above specified escalation periods, the

tariff payable shall be the last escalated tariff or the PSEB HT tariff
applicable in that year which ever is higher. However, in case of
projects where MOU's/ implementation agreements have already been
 Northern Regional Power System comprises of the power systems and
generating stations of Chandigarh, State of Haryana, Himachal Pradesh, Jammu
& Kashmir, Punjab, Rajasthan, Uttar Pradesh, Uttaranchal, Delhi & National
Thermal Power Corporation, National Hydroelectric Power Corporation, Nuclear
Power Corporation, Power Grid Corporation Of India, Satluj Jal Vidyut Nigam,
Tehri Hydro Development Corporation and Bhakra Beas management Board.
signed by PEDA but Power Purchase Agreements are yet to be signed by PSEB
under the New and Renewable Sources of Energy (NRSE) Policy-2001, tariff shall
be applicable as enshrined under the New and Renewable Sources of Energy
(NRSE) Policy-2006. The rate shall be uniform throughout the day for the entire
years. The PSEB/LICENSEES will not be liable to pay any additional amount on any
account. The producer will have a option to sell the electricity generated by him to a
third party (a consumer) within the State of Punjab (as defined under clause 4(i)
above) on such terms and conditions (including tariff) as may be mutually agreed
upon by them.
iii) All transactions between the PSEB/ Licensees and the producer
involving wheeling or sale of power will be settled on monthly basis.
The PSEB/LICENSEES would pay interest on payments delayed
beyond a month @ State Bank of India short term Prime Lending Rate
plus 2%. for delayed amount for actual period of delay.
iv) Banking: The banking facility for the power generated shall be
allowed for a period of one year by the PSEB/ Licensees.
v) Exemption from Electricity duty: The Power Generation from NRSE

projects shall be exempted from levy of Electricity Duty.
vi) PSEB/ Licensees will accept the injection of energy in full during
sustained high frequency hours to ensure full utilization of non-
conventional energy resources.
88
vii) PSEB/ Licensees will provide facility of irrevocable and revolving,

Letter of Credit issued by any nationalized bank. The amount of the
Letter of Credit shall be equal to the bill amount of one month on the
basis of average of last three months. All expenditures on Letter of
Credit shall be borne by the power producers.
5. Other incentives:
(i) Government land if available will be leased out to the developer initially
for a period of 33 years (three years shall be considered as
construction period), on a notional lease rental of Rs. 1/- per Sq. Metre
per annum subject to further renewal on mutually agreed terms and
conditions among the parties.
(ii) Wherever Irrigation land on canal banks is available beyond their

requirements, Punjab Irrigation Department (PID) will transfer canal
land to PEDA on notional lease amount of Rs.1 lac per annum per site.
The leased canal land will be subsequently transferred to the power
producers for development of Small Hydro Projects on Build, Operate
and Own basis for 33 (three years shall be considered as construction
period) years on the same terms and conditions set forth by PID.
Ownership of such land will remain with PID. For setting up MHP on
canals, wherever the Irrigation Department executes the Deposit work
on behalf of Private Developer, no departmental charges shall be paid
to PID by the private developer, however, supervision charges on
actual basis shall be payable. In case the private developer on his own
executes the work, these works shall be done under the Supervision of
Punjab Irrigation Department and the Supervision Charges to be borne
by the Private Developer shall be on actual basis.
(iii) Wherever the required land belonging to local bodies/ Gram Panchayat
is available, the State would encourage the local bodies/ Gram
Panchayat to provide the land for NRSE projects on the terms and
conditions specified in para (i) above.
(iv) The power producers setting up hydel projects will pay cess @ one
paisa per unit of electricity generated for use of river/ canal water.
89
Cess will be applicable on hydel project allotted after issuance of State

Policy.
(v) For canal based hydel projects, pondage of water upto Full Supply
Level in the upstream of canal shall be allowed for optimal utilization of
water resources.
vi) Octroi on energy generation and NRSE devices/equipment/machinery

or NRSE Power Projects shall be exempted.
(vii) To promote manufacturing and sale of NRSE devices/ systems, and

equipments/ machinery required for NRSE Power Projects, Value
Added Tax (VAT) shall be charged @ 4%.
6. For projects based on energy recovery from Urban, Industrial and

Municipal solid/ liquid waste :
The concerned Municipal Corporations/ Bodies/ Committees will provide

garbage at the project site free of cost for Urban, and Municipal (Solid/Liquid)
and Industrial waste based power projects and energy recovery projects.
Alternately the power producers will be allowed to collect the garbage at its
own cost and the Corporation/ Local bodies will pay charges to the power
producer on mutually agreed terms and conditions. Tipping fee shall be paid
by the concerned Municipal Corporations/ Bodies/ Committees to the private
developer / project developer which sets up and operates the Municipal Solid
Waste to energy facility / plant @ Rs.250/- per Ton of MSW processed.
Municipal Corporations/ Bodies/ Committees shall charge a garbage
collection/processing cess / fee from the domestic/ commercial
establishments in their area which are generating the garbage.
7. Facilitation Services by PEDA :

To provide major thrust to the commercialization and to encourage private
sector participation in the setting up of non-conventional energy based power
generation and other projects, PEDA shall provide complete projects support
and facilitation services to private promoters, desirous of setting up non-
conventional energy based projects for which an agreement shall be required
to be signed with PEDA. PEDA will charge facilitation service charges @
0.1% of the project cost as per the Detailed Project Cost.
90
8. Clearance of Project proposal:

viii. The parties desirous of setting up NRSE projects will sign an MoU with
PEDA for development of the NRSE project.
ix. The developers for obtaining the approval of project proposal will submit
their applications to the Chief Executive, PEDA. Their project proposal will
be forwarded to the Government for approval.
x. The project proposal shall be considered by the Empowered Committee

for necessary approvals/ clearances by the State through a Single Window
Mechanism and in a time bound manner. The clearance/approvals shall be
accorded within 60 days from the date of submission of completed
applications on the required prescribed formats of various clearance
issuing bodies / departments along with the requisite fees to the State
Nodal Agency. Private developers shall however be required to fulfill all
statutory / legal requirements with regard to project reports/documents
submission as per requirement of approval/clearance issuing bodies/
organizations under the Govt. rules, regulations & Acts.
xi. After approval of the project proposal, and after issuing of all statutory
clearances, the Producer shall enter into an Implementation Agreement
with PEDA within a period of one month from the date of approval of the
project.
xii. Private developers shall file petition in the PSERC for tariff approval within
15 days after signing of the implementation agreement with PEDA and
PSEB/ LICENSEES shall sign the Power Purchase Agreement within 45
days from the date of issue of tariff order by the PSERC after the
submission of requisite documents by the developers.
xiii. If the applicant does not take effective steps to implement the project
within six months from the date of approval of the project proposal, the
Agreement could be terminated and their project proposal will be cancelled
(i.e. at least 10% of the total project cost should be incurred).
91
xiv. Punjab Irrigation Department will accord technical clearances of drawings/

technical specifications within 30 days.
xv. However, complete transparency in allotting the projects shall be ensured

and as also for evaluation of tenders, keeping in view the financial and
technical parameters. A comprehensive tender document shall be
designed for inviting bids listing out technical and financial parameters of
the potential eligible bidders, which would be approved by the Board of
Punjab Energy Development Agency. On the basis of bidding and
evaluation parameters contained in the tender document, bids would be
invited and evaluated by an expert technical committee appointed by the
Board of Punjab Energy Development Agency.
xvi. The private investors desirous of submitting applications for self identified
sites shall submit soon the prescribed application format, which is
available with PEDA along with requisite EMD. The self identified sites in
case of small/micro hydel projects shall be allocated on first come first
served basis to private developers. However in case more than one
application is received from different private developers on the same day
for the same self identified site then competitive bidding shall be carried
out among the private developers for allocation of self identified site. The
self identified site shall be allocated to the private developer offering the
highest energy share over and above the minimum stipulated energy
share.
xvii. The applications for self identified sites should be complete in all respects
and supported with requisite documents and accompanied with the
Earnest Money Deposit (EMD). EMD should be in the shape of bank
guarantee or demand draft payable at Chandigarh in favour of PEDA.
EMD shall be paid as per the following:
Upto 1 MW capacity : Rs. 1 lac
Above 1 MW upto 3MW capacity : Rs. 1.5 lac
Above 3 MW capacity : Rs. 2.50 lac
After the allotment of the project site(s), the allotee shall fulfill the
following pre-requisites:-
92
a) Submit the processing fee (non-refundable) of Rs. 5000/- per

project.
b) Furnish performance security in the shape of a Bank Guarantee
valid up till 3 years from the date of commissioning as per the
following:
Upto 1 MW capacity : Rs. 1 lac
Above 1 MW upto 3MW capacity : Rs. 5 lac
Above 3 MW capacity : Rs. 10 lac
Romila Dubey
Principal Secretary to Government of Punjab,
Deptt. of Science, Technology, Environment
and Non-Conventional Energy.
93

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PUNJAB ENERGY DEVELOPMENT AGENCY

INFORMATION BROCHURE / BID DOCUMENT

Setting up of Biomass/Agrowaste Power Projects

Built, Operate & Own (BOO) basis

Punjab Energy Development Agency

POWER DEVELOPERS, PROMOTERS

BIOMASS / AGRO-WASTE POWER GENERATION

S.No. Description Page No.

4. Why biomass power generation 7

5. Invitation for setting up of biomass power projects 9

7. Preparation and submission of proposals 13

9. Terms and Conditions 18

10. Project Implementation Schedule 21

11. Application Form 22

12. Proposed Sites by PEDA 29

13. Memorandum of Understanding 38

14. Implementation Agreement 44

15. NRSE Policy-2006 74

16 MNRE, GOI, Biomass Power Generation Projects 94

16 Press Notice 104

17 Maps of Districts of Punjab 105

THE LAND OF EXCITING OPPORTUNITIES

lead in creating more opportunities which are waiting to be exploited

 Biomass / Agrowaste Power Generation potential of more than 1000MW in

 An attractive package of incentives both financial and fiscal

 Easy access by road / rail / air

 Time bound clearances

 Well developed road network within the state

 Investment friendly climate with peaceful and safe environment

 Excellent telecommunication facilities

 Well established wide Rural Electrification Network

S.No. Item Unit

Punjab Energy Development Agency under the Deptt. of Science, Technology,

 Power generation from small hydros

WHY BIOMASS POWER GENERATION

Role of Biomass / Agrowaste based projects is an attempt to supplement energy

 Short gestation periods

Invitation for setting up of Biomass / Agro-waste based power

PEDA shall hold one pre-bid conference at 3.00 PM on 7/6/2007, so as to enable

Non-attendance at the Pre-Bid Conference will not be a cause for disqualification of

Proposals can be submitted by a single firm or a consortium of firms by nomination

Financial Eligibility Criteria :

Sr. No. Criteria Minimum eligibility requirement

1. Turnover of the company p.a. Rs. 3 Crores

The minimum eligibility criteria is to be multiplied by the total no. of sites/talukas to

After the evaluation of the offers to determine whether the bidder’s

1. Check the proposals for meeting the minimum eligibility criteria

Evaluation of commercial bids shall be made on the basis of levelised cash

PREPARATION AND SUBMISSION OF PROPOSALS

The bidders shall submit the proposals in two parts.

“Proposal for Development of Biomass Power Projects”

Name of Proposed Capacity in MW

Envelop 1: Bidder Capability and Profile

The proposal must contain no inter-lineation or overwriting except as necessary to

(b) Project Appreciation:

i) The details of the personnel proposed to be employed on the project and

(c) Litigation Record: Applicants, including each of the partners of a joint

Year Award FOR or Name of Disputed Actual