3Power Energy Group Inc (PSPW)

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Looks as if there looking at the financials for smaller HPP'S projects

Enti Energy Regulatory Commission has opened proceedings for the determination of a new methodology for determining the price of electricity produced by hydro power -s to 15 MW.

ERE explained that this methodology aims to define the principles and manner of calculation of fixed electricity tariffs, which will be paid with priority manufacturers, for all kinds of plants using renewable energy sources with installed up to 15 MW.

The new methodology takes into account, the allocation of fees in accordance with generating capacity:

1- The first group, from 0 to 2000 kw;

2- The second group from 2001 to 5000 kW;

3- The third group from 5001 to 15000 kW.

Duration fee

Feed-in tariffs will be applied for a period of 15 years on average.

1. electricity generating companies concession starting from the day of entry into operation.

2. electricity generating companies privatized this period will apply for the remainder of the time from the date of privatization or the time of entry into operation of additional capacities of ERE.

Tariff Review

Review or adjustment of fee on an annual basis will be conducted for the purpose:

- Ex-post review for differences between expected costs recognized in the calculation of the fee formula and actual / realized. This adjustment will be carried out because the formula is based on data and receipts for various items of costs expected to be implemented and therefore to avoid excess revenues that may result.

- Tariff adjustments related to changes in capacity.

--Component tariff adjustment for the effect of inflation.

This review will be conducted in September of the current year for the period ahead. ERE will adopt a fixed rate of return on equity which will be calculated as a percentage of the total value of investments capitalized agreements 15 (fifteen) years of purchase. Return on equity (ROE) will enable the return of the cost of capital for a period of 15 years.

The interest rate agreed for the debt will be the actual rate of interest applicable under the terms of the loan agreement between financial institutions / lending and these companies, but not higher than the interest rate on loans to large businesses for the long term (more than 5 years).

Financial leverage (above mentioned) will be accepted that the ratio of debt versus equity in the total value of the investment to be between (60% - 70%) that would result from the actual report.

Fixed tariffs will be reviewed on an annual basis in accordance with the rules and practices of ERE.

React manufacturers Yes bankrupt us

In December 2015 ERE has opened proceedings to determine the energy purchase price formula based on the Law no. 138/2013 for renewables but wants to consider a price parcakuar which among others allows' return of our investments for a period of 15 years. While the tender procedures for obtaining concession skualifikoheshin all those projects that do not turn their investment in a period of 8-10 years. Also the banks do not finance projects with investment return period over 8-10 years, said Lawrence Gordani, Legal Director AREA.

He says that it is not logical for an investor to accept a price that turns its investment for 15 years when the obligation to purchase power contracts koncesnionare is 15 years and concessionary must also invest 50% of the machine after 15 years (provided the latter set to all concession contracts in force)!

Gordani says the risk is too great for it is not clear yet what will be the purchase price that the energy and spirit that surrounds our institutions decision-making is focused on reducing the margin of profit these HPPs (up and a drive, in bankruptcy).

"None of the decision-making institutions such as the Ministry, Ere etc. do not want to understand that these HPPs are built by us and are common property of the private-state and we as investors have the right to use a fixed time period and then deliver state afford "he said .

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