F-cdm-pdd: Project design document form for cdm project activities version

Sub-step 2c: Calculation and comparison of the IRR

In the paragraph 12 of the ‘Guidance on the Assessment of Investment Analysis’²⁹ version 5, it is stated that:

‘Required/expected returns on equity are appropriate benchmarks for equity IRR’. Since, benchmark identified in the Sub-step 2b is required/expected returns on equity, equity IRR (before tax) of the project activity shall be calculated for comparison.
Table : IRR inputs

Item	Value	Units	Source	Date of The Source Document
Installed Power	52.8/50	MWm/MWe	License of The project	27/03/2013
Operational lifetime of the project	25	years	Tool to determine the remaining lifetime of equipment (v.1) ^30	16/10/2009
Net Generation	145,850	MWh	Energy Generation Calculation and Reference Explanation (KMHF)	17/04/2014
Electricity tariff	55	EUR Per MWh	Feed-in-tariff^31	18/05/2005

Operational life time of the Mut WPP is determined by using the ‘Tool to determine the remaining lifetime of equipment’’ (v.1). In the tool it is said that default lifetime for the on-shore wind turbines is 25 years.

The equity IRR (after tax) of Mut WPP is calculated on the basis of expected cash flows (investment, operating costs and revenues from electricity sale), as used in the financial analysis for the feasibility assessment of the project. The parameters and values used for the IRR calculation are available to DOE during validation. The resulting IRR for 25 years is stated in below table.
Table : Equity IRR value for project activity (after tax)