- The total project cost of a 4MW small hydro power project is Rs. 400 million. The construction period for the project is one year. The hydrology predicts an annual energy production of 20GWh and the first year tariff paid by Electric Company through its 15 year Power Purchase Agreement is Rs. 6/ kWh. The past experience show that the tariff increases by 2% per annum. The banks have agreed to finance the project at 13% concessionary rate with a debt equity ratio of 80:20.The board of investment guarantees a tax holiday for the first five years and the tax after five years is 30%. The O&M cost of the project is Rs. 0.10 per kWh. The inflation on O&M cost is 8%. Calculate the IRR of the project