The document discusses investment opportunities in India's power transmission and distribution sector. It notes that investment in transmission is expected to increase significantly under the 12th Five Year Plan, with the central government planning to invest Rs. 100,000 crore and states and private sectors contributing additional funds. The distribution sector is also expected to see a large increase in investment between the 11th and 12th Plans. Significant capacity additions will be needed in generation, requiring further expansion of the transmission network to evacuate and deliver the additional power. Private sector participation will be important to achieving transmission investment targets.

1. Rohan Dhall
7/20/2014 CENTRUM 1
Power Opportunity
Generation ($90bn)
Transmission
($43.64bn)
Transmission
Line(60%)
Tower Package (60%) Conductors (25%) Others (15%)
Substation(40%)
Transformer (50%) Others (50%)
Distribution($72.73
bn)

2. 7/20/2014 CENTRUM 2
74%
64% 66% 65% 60% 58% 62%
49%
26%
36% 34% 35% 40% 42% 38%
51%
10th plan FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 11th plan 12th plan
Public and Private Investment
Public Investment in % Private Investment in %
Source: Planning Commission
8.40%
9.00%
9.50%
9.90%10.30% 10.70%
9.63%
0
10
20
30
40
50
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 Total
Projected Investments in infrastructure
in the 12th Five Year Plan
Investment (in thousand
crore)
% of GDP
Source : Planning Commission
The nation’s Infrastructure spending is
expected to grow to 9.9% of GDP during
12th Five Year Plan from 7.5% during 11th
Plan.
Strong population growth and booming
economy will facilitate huge investment
opportunity in Infrastructure.
The 12th Plan gives stress on the
need for expanding
infrastructure and increasing
investment by the Government
and Private Players in form of
Public – Private Partnership
(PPP).
Infrastructure Plays a Critical Role in Economic Development

3. 7/20/2014 CENTRUM 3
Power Sector – Current Scenario & Expected Demand
FY09 FY10 FY11 FY12 FY13
777
831 862
937
998
Power demand in last five years
Power Demand (in bn units)
CAGR: 6.2%
FY14P FY15P FY16P FY17P FY18P
1009 1048
1116
1190
1290
Power Demand in next five years
Power Demand in bn units
( CAGR : 5.3%)
Source : CEA
42584.72
63636.34
85795.37
105045.96
132329.21
199877.03
237742.94
0
50000
100000
150000
200000
250000
End of 6th Plan End of 7th Plan End of 8th Plan End of 9th Plan End of 10th Plan End of 11th Plan End of Feb'14
Growth of Installed Capacity Since 6th Plan
Generation (in MW)
Source : CEA

4. 7/20/2014 CENTRUM 4
Compelling Industry Dynamics for Growth in Power Sector
Factor 1: Low Per Capita Consumption and Electrification
0
500
1000
1500
2000
2500
3000
3500
India Brazil China World
917
2441
3312
2933
Power Consumption (in Kwh)
3871
4251 4416
4791
5296
5631 5814
6345
6743
7179
7656
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
2007 2008 2009 2010 2011 2012 2013 2014E 2015E 2016E 2017E
Per Capita Income
CAGR 7.1%
Factor 2: Rising Income in India (Base Year 2004-2005)
Factor 3: India's Continued Power Deficit
777
831 862
937
998
691
747 788
858
911
0
200
400
600
800
1000
1200
FY09 FY10 FY11 FY12 FY13
Demand (in bn units)
Supply (in bn units)
Source:
Factor 4: Driving Capacity Addition Across Power Sector to meet demands
12th Plan
Estimated
Generation
Investment
Requirement
: Rs 838,700
crores
Non-
renewable
capacity
addition of
88 GW
Renewable
energy
capacity
addition of
30GW
Transmission
Investment
Requirement
: Rs 180,000
crores
Centre: Rs
100,000
crores
State : Rs
55,000 crores
Private : Rs
25,000 crores
Transmission
Line addition
: 107,400 ckm
Sub-station
addition :
270,000 MVA
Distribution
Investment
Requirement
: Rs 306,235
crores
Including Rs
9500 crore
for smart grid
cKm addition
(<33kv) :
1,305,000
MVA
addition
(33/11kv) :
138,000

5. Comparison of Investment in Power Sector from 11th
Five Year Plan to 12th Five Year Plan
11th Five Year Plan 12th Five Year Plan
7/20/2014 CENTRUM 5
Central
31%
State
38%
Private
31%
Sector wise Break up of Total
InvestmentTotal Investment : Rs 5.6
trillion
Generation
62%
Transmission
21%
Distribution
17%
Segement wise Breakup of
Total Investment
Central
34%
State
34%
Private
32%
Sector Wise Break up of Total
Investment
Generation
49%
Transmissio
n
36%
Distributio
n
15%
Segment wise break up of
Total Investment
Total Investment : Rs 5.7
trillion
Source : CEA

6. 7/20/2014 CENTRUM 6
Policies Adopted During Budget FY14 facilitating private sector
Investment in T&D
Generation-based incentives
Public Private Partnership
Liberalized FDI Policy
Low-interest funds
Growing Investments
Higher Capex by PSUs
•Government to reintroduce 'generation-based incentives' for wind power projects to boost
capacity addition in the sector
•USD 147.3 million would be allocated to the Ministry of New and Renewable Energy
•To reduce dependency on imported coal, a Public Private Partnership (PPP) policy framework
would be devised with Coal India Limited to increase coal production
•During FY13, the Goernment liberalized FDI Policy for Power Trading Exchanges
•Foreign Investment in power exchanges registered under the Central Electricity Regulatory
Commission Regulations,2010,allowed up to 49% (FDI-26% and FII-23%)
•Low interest- bearing funds to be provided from National Clean Energy Fund (NCEF) to Indian
Renewable Energy Development Agency Ltd (IREDA) for on-lending to viable renewable energy
projects
•The Total Plan Outlay for the power sector for FY14 is estimated at USD 1.6 billion
•The total capex by power PSUs is estimated to be USD 9.4 billion in FY14 as against USD 9.3
billion in FY13
•PGCIL will incur USD 3.7 billion of capex in FY14

7. 7/20/2014 CENTRUM 7
Indian Transmission Structure
Threat of new entrants : Moderate
Low capital and technology intensity leads to low entry
barriers
Tightening of norms by Power Grid Corporation of India
Limited ,post execution delays by new players, has
reduced the threats from new entrants
Average number of bidders for transmission projects in
PGCIL orders has decreased to 5-6 in 2012-13 and H1 2013-
14 as compared to 8-9 in 2011-12
Bargaining Power of Buyers: High
Significant dependence on Power Grid Corporation of
India Ltd.
Buyers use tender system to award contracts where
pricing is the key factor
Threat of new substitutes: Low
Use of undeground extra high voltage (EHV) cables
instead of overhead lines.However,it will be restricted only
to large populated cities due to a higher cost of
installation.
Bargaining Power of Suppliers: Moderate
Large number of suppliers for reinforced steel,structures
and components
As prices are driven by international demand supply
dynamics,transmission tower manufacturers are neither
price makers or price takers
Competitive rivalry:High
Competition is driven by prior
execution experience and pricing
Increasing Competition fom
chinese and Korean Companies in
overseas markets

8. 7/20/2014 CENTRUM 8
Expected Investment in Transmission and Distribution Sector
Expected Investment in Transmission Sector
1152
2060
2007-08 to 2012-13 2013-14 to 2017-18
Investment (Rs Billion)
Investment (Rs Billion)
CAGR 12%
Source : PGCIL
Transmission
PGCIL Orders
Inter-State
Transmission
Lines
Southern
GRID
Connectivity
HCPTC
Corridors
UMTP
Expected Investment in Distribution Sector
2007-08 to 2012-13 2013-14 to 2017-18
971
868
Investment (Rs Billion)
Investment (Rs Billion)

9. 7/20/2014 CENTRUM 9
Opportunities in the International Market
Opportunities in the International Market
New Generation
Capacity
•Interconnection
projects and
transmission projects
for new generation
capacities
Replacement
Demand
•Replacement demand
in the next 5-7 Years
Increasing
Electricity
Demand
•World Electricity
Demand to grow to
34,352 TWh from
17217 TWh at 2.7%
CAGR over 2009-35
Increased
Investment in
T&D
•IEA-approximately
42% of investments
would be made in
power T&D projects
over 2010-35
Key International
Markets
•South Asia,Middle
East,East Africa and
North America would
be key international
markets for
investments
T&D Investments Globally Over 2011-2035 Expected (US $ bn)
0
1000
2000
3000
North
America
Europe Pacific E.Europe Asia Middle East Africa Latin
America
Investment(inUS$bn)
Region
Global Investment in 2011-2035
Transmission
Distribution

10. 7/20/2014 CENTRUM 10
Increased Demand from Generation Segment
Installed Capacity Requirement
132
220
306
425
575
0
100
200
300
400
500
600
700
2007-2012 2012-2017 2017-2022 2022-2027 2027-2032
Installed Capacity Requirement
Capacity (in GW)
88
86
119
G
150
Expected Investment in Transmission and Distribution
Expenditure Area Centre State Private Total (in Rs Crore)
Transmission 100000 55000 25000 180,000
Distribution 48,191 238082 19,963 306,236
Total 148191 293082 44963 486236
31%
60%
9%
Percentage
Investment in T&D
Sector
Centre State Private
16%
78%
6%
Percentage
Investment in
Distribution Sector
Centre State Private
55%31%
14%
Percentage
Investment in
Transmission Sector
Centre State Private

11. 7/20/2014 CENTRUM 11
Capex Plan for 12th Five Year Plan – Segment Wise (%)
Capex Plan for 12th Five Year Plan-Segment Wise (%)
PGCIL Capex Plan of Rs 1,00,000 crore in 12th Five Year Plan
Segment % of spending Amount to be spent (in Rs Cr)
IPP 55% 55000
Central Sector Projects 20% 20000
UMPP 14% 14000
Grid Strengthening 11% 11000
Total 100% 100000.00
55%
20%
14%
11%
Capex Plan by PGCIL for 12th Five
Year Plan-Segment Wise (%)
IPP
Central Sector Projects
UMPP
Grid Strengthening
FY2009 FY2010 FY2011 FY2012 FY2013
14384
12295 13054
22153
16066
Total Order sales
PGCIL Orders
PGCIL Order FlowSource : PGCIL

12. 7/20/2014 CENTRUM 12
KEY EXHIBITS
Exhibit 1: Massive Power sector investment targeted in 11th,12th Five Year Plan
Rs Crore 11th Five Year Plan 12th Five Year Plan
Generation 410900 495083
% of total power Capex 49% 44%
Transmission 140000 240000
% of total power Capex 17% 21%
Distribution 287000 400000
% of total power Capex 34% 35%
Total 837900 1135083
Exhibit 2: Pie for T&D spend to increase in 11th and 12th Plan
55.8% 49% 43.6%
44.2% 51.0% 56.4%
Share in 10th Plan Share in 11th Plan Share in 12th Plan
Pie for T&D has increased from 10th plan to 12th plan
Generation T&D
Source : PGCIL
Exhibit 3: Trend in T&D Segment
(Rs Crore) 10th Plan Investment 11th Plan Investment 12th Plan Investment
T&D 119500 427000 640000
Transmission 47100 140000 240000
Distribution 72400 287000 400000
T&D Capex as % of Total 44.20% 51% 56.40%

13. 7/20/2014 CENTRUM 13
KEY PLAYERS
Apar Industries
Gammon India Jyoti Structures
Kalpataru Power
KEC International
EMC Limited
IVRCL Limited
Diamond Power InfrastructureSterlite Technologies
Tata Projects Emco Ltd. Alstom T&D Lanco Infratech
Larsen & Tourbo

14. 7/20/2014 CENTRUM 14
CONCLUSION
 India faces power deficit despite having 225 GW of installed capacity due to
following two main reasons:
 Transmission Bottleneck
 Inability to evacuate excess power from surplus regions and channel it to regions
that face severe power shortages
With the future investment in sector planned to be USD 75 Billion in next two
Five Year Plan (12th and 13th Plan) , investments in transmission sector needs to be
increased significantly in upcoming five year plan
Ideally 50% of the amount invested in power generation should be spent in
transmission; however in India only 30% is invested in Transmission. In order to
cover up this deficit 1.3 to 1.4 times investment must be made in transmission.
The investment in power transmission sector is about USD 35 billion out of
which USD 19 billion is planned to come from PGCIL while remaining USD 16
billion would have to be secured from private players.
Greater investment and active participation from private players is a much
needed catalyst to achieve objective of reducing power supply deficit.