Financing RE PROJECTS Presentation by Abhilakh singh general Manager ireda

1. FinancingRE PROJECTSPresentation byAbhilakh singhgeneral Managerireda 2ND NOVEMBER, 2017

2. Power Scenario in India • Total Installed capacity of 329.22* GW of which RE capacity is over 59 GW -17.95%. *As on August 2017 RE Potential Achievements & Targets Target (2022): 175 GW * At 100 m hub height estimated by NIWE

3. RE Growth Vs Total Conventional Power installed (In GW)

4. SolarPower Installed Capacity (GW)

5. Envisaged Solar Capacity Additions (MW) In MW

6. Rooftop Solar Target - 40 GW – Measures to promote Rooftop Solar • 36 States/UTs have notified net metering regulations • Inclusion of Rooftop under housing loan - Guidelines already issued

7. Reducing Cost of Power from Solar Tariffs evolved in FIT - Competitive bid process (INR/kWh)

8. Factors leading to reduction in Solar Tariffs

9. Policy & Regulatory Framework for RE development • Electricity Act (EA), 2003 • Promotion of RE by ensuring connectivity and sale of RE power • Provision for Central Govt’s National Electricity Policy of power incl. RE • SERC’s to provide: • RPO regulations • RE tariff • National Tariff Policy (NTP), 2006 & Amendments 2016 • Preferential tariff for RE • Procurement of RE through competitive bidding by utilities, in longer run • Amendments, 2016 • Renewable Power Obligation (RPO):8% by March 2022.  • Renewable Generation Obligation (RGO): for New thermal plants • No inter-State transmission charges for solar and wind power. • National Electricity Policy (NEP), 2005 • Promotion of private participation in RE. • Targets capital cost reduction in RE through competition. • SERCs should specify appropriate tariffs to promote RE and specify targets for RE. • REC Mechanism, 2010 • Enablinginter-State RE transactions National Action Plan for Climate Change, 2008 • A dynamic minimum renewable purchase standard (DMRPS) • NAPCC has set the target of 15% RE by 2020

10. Key incentives –

11. ReInvestment –Global vis-à-vis India • Total Global investments in RE was $287.5 Billion in 2016 (Fell 18% from 2015 levels) • Reduction in technology costs, raw material costs, improved technology, conducive policy environment, better financing structuring of projects have resulted in low capital costs. • Global Solar PV Capacity by end of 2016 was 295 GW, Wind Energy was 466 GW. Source: Bloomberg New Energy Finance

12. Financing Requirements 175GWREplanentailsinvestmentofApprox.Rs12,00,000 crores • Multilateraland Bilateral • NBFCs • Commercial • banks Debt(70%) Equity(30%) (Rs.3,60,000Crore) (Rs.8,40,000Crore) Annualinvestmentin RE(Rs. Crore) 149000 160000 140000 120000 100000 80000 60000 40000 20000 0 143000 136000 SHP and Biomass Wind 128000 120000 102000 Rs.Crore 58000 Solar 18000 2014-152015-162016-172017-182018-192019-202020-212021-22 (p) (p) (p)(p) (p) (p) (p) RenewableEnergyScale upplan • MNRE 19

13. About IREDADedicated FI for Renewable Financing 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. Mission Be a pioneering, participant friendly and competitive institution for financing and promoting self-sustaining investment in energy generation from renewable sources, energy efficiency and environment technologies for sustainable development.

14. About IREDA • 30 years of experience in financing Renewable Energy Projects • Supported green capacity addition of more than 10000 MW. • Achieved highest ever loan sanction of ₹ 10199 crores during the financial year 2016-17, registering an increase of over 30% over the FY 2015-16. • Highest ever loan disbursement of ₹ 6593 crores during FY 2016-17, registering an increase of 54% over the FY 2015-16 • Reduced lending rates from 11.50 % - 13.25% during FY 2013-14 to 9.75% - 11.50% (current), which is the most competitive in Indian RE space. • IREDA has committed to support 6000 MW of RE capacity by 2019, corresponding to Loan sanction of ₹ 30,000 Cr. • Awarded Mini Ratna ( Category – I ) status by MNRE (Govt of India) • ISO 9001:2015 and ISO 270001:2013 Certified

15. IREDA - Operational Areas

16. FINANCING PRODUCTS AND SCHEMES

17. Highlights of Performance – Last 5 Years Rs / Crore CAGR : 28% CAGR : 14 % CAGR : 33%

18. New Financing Schemes / Products • Scheme for Solar Roof Top through Aggregator (RESCO) – Scheme is available for all Grid connected/interactive Solar PV projects located on Rooftops. Applications can be submitted under Aggregator Category and Direct Category. • Scheme for Bridge Loan Against pending Energy Bills to address the issue of delay of payments by DISCOMs. Bill discounting facility for the Energy bills of IREDA borrowers which are pending for payment with Utilities for upto 6 months. • Lines of credit to Non-Banking Financial Companies for on-lending to RE/EEC projects To cater to regional level financing, LoC to Non-Banking Financial Companies (NBFCs)/ State Govt. Financial institutions & corporations. for on- lending to RE. • Short term loan assistance to RE developers / suppliers / contractors To provide financial assistance in the form of short term loan for meeting immediate fund requirements towards project development, implementation/operations of renewable energy projects.

19. New Financing Schemes / Products • Bridge loan assistance to RE promoters / developers against capital subsidies / VGF To provide financial assistance in the form of Bridge Loan for meeting immediate fund requirements towards implementation/operations of renewable energy projects to bridge the gap till the time Capital subsidies/Viability Gap Funds (VGF) are available/released to the developers. • Underwriting of debt / loan syndication To facilitate the early financial closure, implementation and commissioning of the project. • Guarantee assistance to RE suppliers / promoters. To facilitate Suppliers/Manufacturers/EPC Contractors for successful implementation of RE projects • IREDA-NCEF RE-finance Scheme – for revival of stressed projects in biomass and small hydro sectors. To provide low-cost refinance (interest rate @ 2% p.a) up to 30% of the loans outstanding in the books of scheduled commercial banks / financial institutions. As on date IREDA has sanctioned refinance of Rs 252 Cr under the scheme.

20. New Financing Schemes / Products • Credit Enhancement Scheme for raising Bonds towards Renewable Energy Projects (Solar / Wind). • To enhance the capital flow to the sector, IREDA introduced the new scheme “Credit Enhancement Guarantee Scheme” for raising bonds towards RE projects. IREDA and IIFCL Co- Guaranteed Bonds by Renew Group to the tune of Rs. 274 Cr (IREDA Portion - Rs. 90 Cr) for their 124 MW Solar Power project • Loan Scheme for “Access to Energy Projects” with “First Loss Mechanism” under KfW Line of Credit • To increase the supply and use of sustainable clean energy services in rural areas through improved access to financing for project developers. • Policy for issue of Letter of Comfort (LoC)/ Letter of Undertaking (LUT) for opening Letter of Credit (LC). • Letter of Comfort (LoC)/Letter of Undertaking (LUT) can be issued to all sanctions of term loan where LC opening is a requirement under EPC/Equipment Supply contract to enable the borrower to open LC with its bankers. • IREDA provides financing to Concentrated Solar Thermal (CST) projects set up under the GEF - UNIDO - MNRE program. • Policy for financing of Transmission Projects

21. Broad Lending Norms of IREDA Quantum of Assistance : Up to 75% of the Project cost. Rate of Interest : 9.75% - 11.50% per annum Moratorium on Principal repayment : Upto 1 year after CoD Repayment after construction period :Upto 20 years & moratorium • In case of Consortium, IREDA can follow the terms and conditions of the Lead Lenders.

22. Impact of IREDA funded projects • Created awareness in the country. • Encouraged entry of private sector investments in RE sector. • Catalyzed market development by showcasing success stories - encouraging other lenders(Banks/FI) to support the sector. • Helped in creating manufacturing, design & engineering, operation and maintenance capabilities. • Assisted several states/ERC to declare policies and incentives to encourage private investments in RE sector. • Assisted in policy shift from technology demonstration to commercialization making RE development demand driven. • Helped in creating direct and indirect employment generation, economic development and improving living conditions.

23. Environment & Sustainable Development • Business operations of IREDA are aimed towards promotion of environment friendly technologies and sustainable development. • IREDA has an Environment and Social Management Policy. • As a step toward carbon neutrality, IREDA also set up a 50 MW Solar Power Project at Kasaragod, Kerala. • Projects funded by IREDA are either set up in rural or far flung areas such as deserts, waste lands etc., leading to increased economic and development activities in the region. • IREDA’s borrowers facilitate building of roads, Dispensaries, schools, Temples, houses, toilets etc. for local population near project site. • Employment opportunities are generated through IREDA funded projects during both construction and post commissioning of the project.

24. Thank You Indian Renewable Energy Development Agency Limited www.ireda.in