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ICRA Analytics_Grading of Energy Efficient Projects

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ICRA Analytics_Grading of Energy Efficient Projects

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  1. GRADING OF ENERGY EFFICIENCY PROJECTS BACKGROUND The Bureau of Energy Efficiency (BEE) has launched a pilot programme to undertake grading of 100 energy efficient (EE) projects. The overall objective of the programme is to facilitate the financing of EE projects by establishing confidence among Financial Institutions (FIs) and providing them with graded EE projects. ICRA Analytics Limited has been empaneled by BEE for grading the EE projects along with financial institutions. Eligible Borrowers can get their EE projects graded by ICRA Analytics Limited under this scheme. ELIGIBLE BORROWERS Central/ State Government offices Large Industries MSMEs OEMs ESCOs ELIGIBILITY CRITERIA OF THE PROJECTS ACCEPTED UNDER THIS PROGRAMME • Project energy savings should be minimum 10% [in DPR or Investment Grade Energy Audit report] Banking should be sound. Corporate banking / loan accounts should be of standard category Range of loan size to be considered should be Rs. 25 lakh to 1 Crore Keep ESCROW / TRA account to ensure repayment mechanism under ESCO model All the applicants must meet minimum eligibility conditions of the Empanelled financial institution To include NOC from other banks / FIs if the borrower has accounts in other banks too • • • • •

  2. REIMBURSEMENT OF THE GRADING FEE BEE will reimburse the grading fee of maximum ₹2.9 Lakh per EE loan/ project as and when intimation is received from empaneled financial institutions, subject to post sanctioning of the loan amount to the graded project. It may be reiterated that the money reimbursed by BEE will be for the EE projects/ loans that will be graded within one year from 16th August 2021. Once intimated, BEE shall release the grading fee to the concerned empaneled Fl. The Fl will adjust this amount in borrower’s loan instalment with immediate effect and this whole amount shall be adjusted in the borrower’s installment [interest/principal] within 12 months from the date of receiving money from BEE. MECHANISM 5 Submits grading report 1 Submits loan application to Em Fl Em FI Asks borrower to get the grading of its EE project done Borrower 2 4 7 BEE releases reimbursement to Em Fl that will adjust this amount in borrower’s loan installment immediately within 12 months Hands over the grading report 3 6 Post sactioning of loan Em Fl shall give docments to BEE for reimbursement of grading fee Submits the application for grading along with fee Em Grading Agency ICRA Analytics Limited

  3. BENEFITS TO BORROWER 1. Grading gives higher credibility to the project 2. A higher grade can help a borrower negotiate better lending terms with lenders 3. Grading fee reimbursement shall reduce burden of loan installment on borrower EVALUATION STRATEGY Evaluation of the EE projects by grading agencies will largely be covering the points below including site visits TECHNOLOGY RISK SPONSOR RISK FINANCIAL RISK INDUSTRY RISK EXECUTION RISK GRADING SCALE Grading would be defined as “the repayment capability of the project debt” which is given in the table belowW REPAYMENT CAPABILITY OF PROJECT DEBT GRADE 1 90 - 100 EXCELLENT GRADE SCORE GRADE 2 80 - 89 VERY GOOD GRADE 3 70 - 79 GOOD GRADE 4 60 - 69 ABOVE AVERAGE GRADE 5 50 - 59 AVERAGE GRADE 6 30 - 49 WEAK GRADE 7 0 - 29 WEAKEST CONTACT DETAILS - FINANCIAL INTITUTIONS Jyoti Bisht, Executive Vice President 022-65077894 | jyoti.bisht@yesbank.in YES Bank Ltd. Reshma Jamdar, Senior Vice President 022-65079121 | reshma.jamdar@yesbank.in K. P. Philip, Deputy General Manager +91 9810165918 | kpphilip@ireda.in IREDA Ashok Yadav, Assistant Manager +91 9811889805 | ashokyadav@ireda.in

  4. CONTACT DETAILS - ICRA ANALYTICS LIMITED Mamun Saifuddin Sourav Das (Manager - Business Development) mamun.saifuddin@icraanalytics.com +91 73040 36988 (Lead - Risk, Analytics and Grading) sourav.das@icraanalytics.com +91 98307 38030 WE ALSO PROVIDE GRADING SERVICES FOR Solar power companies / system integrators Energy Service Companies (ESCO) Vendors and Dealers Power distribution utilities MSMEs WHY ICRA ANALYTICS? NATIONAL presence, with reach across diverse locales IN-HOUSE research team tracking over 120 sectors CREATIVE and cross- functional approach to problem solving ONE OF THE BEST knowledge bases in India for analysing project risks PROFICIENT TEAM with rich experience across entire value chain CERTIFIED with ISO 9001:2015 and ISO 27001:2013 20+ years 800+ 10000+ assignments Of organisational experience Committed professionals ABOUT US ICRA Analytics Limited is a wholly owned subsidiary of ICRA Ltd. with business interests in knowledge services, risk management, market data, grading and risk assessment services. We serve a wide range of global and domestic clients starting from BFSI players, fund managers, financial intermediaries, regulators, industry bodies, government organizations, and other market participants. We provide an array of digital tools and research, risk advisory, market data and analytical support to assess and manage risk in lending and investment decision-making. We add value through our deep domain knowledge, strong functional competence, and technological expertise. We provide actionable insights with our expertise, accuracy, and timeliness. Version Dated April 2022

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