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IL&FS Water Ltd Capability Presentation

October 30, 2010

Gujarat Pollution Control Board

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Genesis of IL&FS in Infrastructure

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n Promoted as a specialized institution by HDFC, UTI and Central Bank of India

n Unique mandate catalyzing infrastructure development in India on a commercial format

n Pioneer in development, financing and implementation of infrastructure projects

n Full service capability visioning, documentation, financing, development, structuring, management, technology and execution

IL&FS in Infrastructure

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Sectors

n Water and waste watern Transportationn Area developmentn Cluster developmentn Special Economic Zone (SEZ)n Financen Powern Portsn Urban infrastructuren Environmentn Educationn Tourism

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IL&FS Water Business Group

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Background

n IL&FS promoted the first PPP water and sewerage project in India viz. Tirupur. The spade work for the project started way back in 1992

n The Tirupur project was commissioned in April 2005 ahead of schedule and within cost

n This projects helped in establishing the commercial framework for water projects on a PPP framework in the country

n Building on this experience IL&FS is involved today in a slew of projects and initiatives in the water sector (with an aggregate value of USD 1 bn)

n IL&FS is also implementing a 55 mld textile effluent zero liquid discharge facility in Tirupur. This is the largest such project site in the world

n A similar 7 mld project is being set up in Ambur for leather effluent treatment

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Functional Competency

n Functional Expertise in the following areas of water sector :

n Technologyn Project conceptualizationn Project design, review & developmentn Project financingn Project contracting & procurementn Project implementation including contract

managementn Operation & Maintenance

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Value Addition

Project Development

Project Financing

ProjectImplementation

Project O&M

Technology DesignProcurementDocumentation

InvestmentLendingArranging

Project ManagementSupervision

Supervision Direct O&M

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Segmental Experience

n This experience straddles the following areas of the water sector :

n Water supply industrial and domestic (urban and rural)

n Domestic waste water managementn Industrial effluent managementn Industrial / Domestic waste water reusen Desalination

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Tirupur Water Project

n Project: Implementation of a 250 Mld industrial cum domestic water project for the town of Tirupur

n Commercial framework: Concession agreement includes source and distribution to industry and bulk to domestic. Cross subsidy by industry of domestic tariff

n Project Cost : Rs. 1000 Cr

n Means of Finance : 60% debt, 30% equity, 10% quasi equity

n IL&FS Role : Promoter

n Current Status: n Water on tap from April 2005

Distinction Award WinnerGlobal Water Awards 2006

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IOCL Water Supply Project

n Project: Supply of 95 MLD water from River Mahanadi at Cuttack to Paradip for the Paradip refinery of IOCL on BOOT basis

n Project Cost : Rs. 650 Cr

n Means of Finance : 70% debt, 20% equity, 10% Mezzanine debt

n IL&FS Role : BOOT contractor

n Current Status: n Construction in progress

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Nanded Urban Water Project

n Project: Development and implementation of drinking water, sewerage system & storm water drainage for the town of Nanded, Maharashtra

n Rationale: Sikh holy city, badly in need of infrastructure upgradation to meet the requirements of Sikh festival 2008

n Cost : Rs. 350 Cr

n IL&FS Role : Development, Financing, Implementation Supervision & O&M

n Means of Finance: GoI Grant 80%, State Government 10%, Loan 10%

n Current Status:n Project completed

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Tirupur Effluent Project

n Project: Treatment of textile effluent through RO to meet zero discharge norms of TNPCB. Estimated volume of effluent is approx 100 mld. Approx 53 Mld across 9 CETPs (Largest recycling site in the world)

n Rationale: Bleaching & Dyeing industries not able to meet TDS norms of PCB. Project would enable them to meet these norms while at the same time recycle water

n Cost : About Rs 450 crores

n IL&FS Role : Development, Financing, Implementation Supervision, O&M

n Means of Finance: Govt 10%, Industry 15%, Commercial loans 75%

n Current Status:n Commercially operating since March 2010

Highly Commended Global Water Awards 2007

Background

n Tirupur is an industrial town located in Tamilnadu with about 1900 textile enterprises

n Tirupur has an international recognition as Indias leading knitwear export centre

n Exports from Tirupur are growing at a rapid pace of 15% per anumin the last decade

n Currently exports from Tirupur are about USD 2.75 billion

Background .. 2

n The knitwear production process involves knitting, processing (bleaching and dyeing), printing, embroidery and stitching

n Bleaching and Dyeing are highly water intensive processes; they also generate a high quantity of effluent

n Tirupur has a large concentration of bleaching and dyeing industries about 800 units

The Problem

n The dyeing/bleaching units are typically small and medium enterprises (SMEs) doing job work for the garment exporters

n They generate about 100 -120 Million Litres per Day (MLD) of textile effluent

n The effluent has high salt content, colour and other chemical components like BOD and COD

n The units had implemented CETPs based on conventional physico chemical treatment before discharging the treated effluent into the adjoining Noyyal river and this has affected the irrigation water source.

n The conventional effluent treatment plants were unable to tackle the problem of colour and TDS. Moreover, the treatment process generated huge quantities of sludge resulting in virtualmountains of sludge

Sludge mountains!

The Problem .. 2

n The affected agriculturists association filed a Public Interest Litigation against the polluting industries

n The Tamilnadu Pollution Control Board (TNPCB) and the High Courthave directed the industries to implement zero discharge facilities within a defined time frame or face closure

n Industries approached IL&FS to help them to develop, finance andimplement the zero liquid discharge (ZLD) facilities

n IL&FS had to reckon with two major issues:n Technology & Scale

n ZLD project of this scale never implemented beforen Technology for pre treatment should aim at minimizing the

sludge generationn Recycling has to be factored in

n Financingn The units were mostly SMEs with little balance sheet

strengthn Project of this scope and magnitude never financed before

Challenge

Technical Solution .. 1

n IL&FS scouted for technologies and suggested an end to end solution to take care of the followingn Colour reductionn Salt separationn Reduction in sludge volume

n After detailed analysis, the identified process sequence is,n Raw effluent conveyance Pretreatment Reverse

Osmosis (RO) Evaporator Treated water conveyance

n Pretreatmentn Total biological oxidation (TBO) activated sludge process for

the reduction of color and to minimize other contaminants except TDS

n TBO also reduces sludge generation 10-15% compared to other process

Technical Solution 2

n Total Biological Oxidationn Unique Processn Aerates effluent through diffusers in deep tanksn Controlled pH conditionsn Around 90% reduction in BOD and around 85%

reduction in CODn About 50% reduction in colourn In a single stepn No coagulating chemicals added

EXISTING CETP (PHYSICO-CHEMICAL TREATMENT)

Cake for Disposal

Discharge to Noyyal River

Alum/Ferrous Sulphate Dosing

COLLECTION WELLRAW EFFLUENT

FROM INDUSTRIES

FLASH MIXERCLARIFLOCCULATOR

EQUALIZATION TANK

THICKENER CENTRIFUGE

Sludge

Lime Dosing

TOTAL BIOLOGICAL OXIDATION TREATMENT

To filtration and RO System

Acid Dosing

SCREEN CHAMBER/INTAKE SUMP

RAW EFFLUENTFROM INDUSTRIES

BIOLOGICAL OXIDATIONTANKCLARIFIER

EQUALIZATION TANK

THICKENER FILTER PRESS

Cake for Disposal

Sludge

Air

Technical Solution .. 3

n Reverse osmosis (RO)n Desalt the water to generate clear water stream and n concentrated salt stream

n Evaporatorn The concentrated salt stream from the RO will be evaporatedn The vapour will be condensed back into watern The salt will be crystallized for reusen MVR type evaporator instead of multi stage evaporator

n Pipelinen Pipeline network connecting the industrial units to their CETPsn Separate pipeline systems for effluent and treated water conveyance

n The whole process will have a recovery of 80 to 85% water for reuse by industries

Process Flow

Pre-treatment Biological Oxidation Tank

Reverse Osmosis Plant

Evaporator Plant

Quality Comparison of TBO (+RO) water with conventional treated river water

Parameter TBO-RO permeate Treated river water

pH 7.0 to 7.5 7.0 to 8.0

TDS, mg/l < 250 < 500

Chlorides, mg/l < 150 < 200

Turbidity, NTU < 1 < 3

Implementation Framework (Examp