An infrastructure asset developer is planning to build a 2 x 250 megawatt (MW) coal- fired electric power plant in an Asian country. Estimated investment cost is about USD (U.S. Dollar) 500 million. The Chief Financial Controller of the developer has been negotiating with several bank groups to raise USD 350 million project financing. One leading project finance bank submits bid to raise the syndicated project finance loan.

(a) The project finance bankproposestosolelyand fullyunderwrite thefull amountof theproject finance loanwith thefollowing syndication strategy (Syndication strategy 1).

The syndication stages are as follows:

1. The soleprojectfinance ("LeadArranger") underwrites the entireamountofprojectfinanceloan
2. TheLead Arranger invitesand contracts withthree(3)sub-underwriters(Co-Lead Arrangers)to commit USD87.5 millioneach
3. Thisis followedby general syndicationwhich bringsin a further six(6)participating banks(Managers)to join the transaction,eachcommitting USD35 million.
4. On completion of the syndication, the final-takecommitmentof the Lead Arrangerand the Co-Lead Arrangerswill be reducedtoUSD35million each.

TheLead Arrangers determinethat for its solefully underwrittenbid,it willtake a praecipiumof 5 bp flat (on thefull projectfinance amount) from thearrangementfee. TheLead Arrangerand the Co-Lead-Arrangerswill eachreceive 45 bp flaton the underwrittenamount. Each manager will receive25 bp flatfor theparticipation amount.

(note : bp means basis point. Each bp is equal to 0.01%)

Thecompany has concludeda long-term power purchase contractto sellelectricity generatedtoa state-owned offtakerat a total electricity tariffof US cents6 per Kwh(kilo-Watt hour).Thepowerplant isexpected tobe operatingthroughout theyear exceptfor15 calendardays duringwhich it willbe shutdown completely forscheduled maintenance.Thevariable operatingandmaintenancecost ispassed throughto thetariff in the Variable CapacityPaymentcomponent. The technicaldesignteam has alsodeterminedthat theVariable CapacityPaymentshould be atmost 15%of thetotal tarifflevel.

What is the maximum VOMR (Variable Operation and Maintenance Recovery) the plant is allowed to have?