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Financing of Solar Projects under JNNSM

Round Table Discussion on National Solar Mission. Financing of Solar Projects under JNNSM. B.V. Rao GM,IREDA b.v.rao@ireda.in 7 th April 2010. Jawaharlal Nehru National Solar Mission. Mission Objectives.

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Financing of Solar Projects under JNNSM

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  1. Round Table Discussion on National Solar Mission Financing of Solar Projects under JNNSM B.V. Rao GM,IREDA b.v.rao@ireda.in 7th April 2010

  2. Jawaharlal Nehru National Solar Mission

  3. Mission Objectives Jawaharlal Nehru National Solar Mission has been launched under the National action Plan on Climate Change with an objective:

  4. Mission Targets A 3- phase approach has been formulated

  5. Mission Strategy

  6. Policy & Regulatory framework

  7. Fiscal Incentives

  8. Solar-Manufacturing

  9. Financing the Mission Activities

  10. Research and Development

  11. Human Resource Development

  12. Other Aspects

  13. About IREDA

  14. Evolution of IREDA Inception Incorporated under the Companies Act on 11th March, 1987 to promote, develop and extend financial assistance for Renewable Energy and Energy Efficiency/ Conservation Projects. Objective Extend financial support to Renewable Energy, Energy Efficiency & Conservation projects Motto Energy For Ever

  15. Sectors being financed Sectors being financed: Wind Small & Medium Hydro Biomass Power & Cogeneration Solar Waste to Energy EE & Conservation Bio Fuels/ Alternate Fuels Other Activities Intermediary for providing financing facilities for various MNRE Schemes. Implementing Agency for GBI Scheme – Wind & Solar

  16. Financing Schemes • Project Financing Schemes • Equipment Financing Schemes • Financing Through Intermediaries Quantum of Assistance - Upto 70% of Project Cost Rate of Interest - 11.25% to 12.75% Repayment Period - Upto 13 Years

  17. Financing terms for different sectors

  18. Successes Developed RE through innovative financing. Encouraged entry of private sector in RE. Catalyzed market development leading to commercialization of RE. Helped in creating manufacturing, design & engineering, O&M capabilities. Assisted in framing of conducive RE policies. Highest share in RE Financing.

  19. Resource Base 31.12.2009 Authorized Share Capital :Rs 1000 Cr Paid-up Capital :Rs 520 Cr Net-worth :Rs 871 Cr Domestic Borrowings :Rs 773 Cr International Borrowings :Rs 1115.69 Cr

  20. International Partners • Govt of Netherlands, 1991 : 18 Million Dutch Guilders • World Bank (1stLoC), 1993 :$ 145 Million • DANIDA, 1993 :$ 15 Million • Asian Development Bank, 1997 :$ 100 Million • KfW, Germany (1stLoC), 1999 :€ 61.35 Million • World Bank (2ndLoC), 2001 :$ 110 Million • KfW, Germany(2ndLoC), 2008 :€ 50 Million • KfW, Germany(3rdLoC) :€ 19.9 Million Lines of Credit in Pipeline • AFD (France) :€ 80 Million • JICA (Japan) :$ 100 Million

  21. Highlights • Dedicated FI for RE Financing – Unique in the World • Specialized knowledge of RE / EE sector • Recognized internationally – High Brand Equity • All Multilaterals/ Bilateral prefer working with IREDA • Perceived as a leader in the sector • Profit earning & dividend paying • Rated Excellent for FY 2008-09 • Expected Rating Excellent for FY 2009-10 • NBFC as per RBI Classification • ISO 9001:2000 Certified Company

  22. Cumulative Performance • No of Projects Sanctioned : 1892 Projects • Total Loan Sanctions : Rs. 105979.2 Million • Loan Disbursements : Rs. 58800 Million • Sanctioned Power Capacity : 3616 MW • Commissioned Capacity : 1902 MW • Conventional Fuel Replacement :1.3 M MTCR/Yr As on 31.3.2009

  23. Sector wise sanctions by IREDA

  24. Role of IREDA under JNNSM

  25. Risk Factors in Funding Solar Projects

  26. Risk Factors in Funding Solar Projects

  27. Risk Factors in Funding Solar Projects

  28. Suggestions for Risk Mitigation to finance Solar Projects

  29. Suggestions for Risk Mitigation • Ad vocation for long term / stable/ consistent policies at central / state level- to honor PPAs and MoUs. • Frequent / close interaction with all stake holders including regulatory commissions- to stipulate appropriate GBI/PPA based on capital cost. • Proper Resource assessment studies. • Provision of partial risk guarantee fund from Govt. • Importance of timely clearances / approvals for solar projects. • To create special single window clearance cell at state level.

  30. Suggestions for Risk Mitigation • Promoters to take advance actions to avoid delay of deliveries- to meet targets under JNNSM. • To encourage establishment of more manufacturing units/ suppliers in the country- to deliver indigenous cells and modules as per the requirement of JNNSM . • To establish a mechanism to have information exchange between various FIs and banks-for co-financing or consortium financing. • Detailed site survey reports to be undertaken through professional bodies- to maximize performance efficiencies. • To establish more training institutions for producing skilled manpower-capacity building.

  31. Suggestions for Risk Mitigation • To stipulate suitable conditions for recovery of loan from operations of solar projects in the event of failure of core business (for non IPP projects). • Concurrent monitoring of projects by Fis by appointment of lenders engineers. • Periodic inspection / monitoring of projects even after implementation. (TRA and Generation data) • Innovative financing models by accessing low cost funds from international institutions.

  32. Thank youIndian Renewable Energy Development Agency Limited

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