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IN THIS ISSUE
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Innovative solutions in 24
20 renewable energy inancing COVER
Cover India overtakes the US to become the second-most attractive Innovation partner to
country after China for renewable energy investment. India’s RE mission
The World Bank
is supporting
India’s renewable
inancing through
a portfolio
of energy
engagements
amounting to $1
billion.

27
Cover

India set to be a
great destination for
investment
Developers are
ready to take

28 risks as we have
a suiciently
developed
COLUMN ecosystem today.
Bhadla Phase-IV and
innovative inancing
Solar tarif reaches a historic low of Rs 2.44 a unit
in the latest bidding process at Bhadla, Rajasthan,
giving a way to innovative inancing.

40
29 IN-CONVERSATION
EVENT COVERAGE
Larger projects would
Time right to raise aggressive enable developers to
innovation in inancing bargain better
Eminent industry players come together at the
‘Renewable Energy Innovative Financing – Strategic
Discussions’ – a seminar organized by the National
Solar Energy Federation of India (NSEFI).

45
INTERVIEW

Emergence of new means in RE The scale of wind projects has gone up

inancial space in the recent inter-state competitive
Opportunities in India’s renewable energy build up bidding which is enabling the project
has resulted in mobilizing several strategic & inancial developers to do reengineering and
investors towards the sector. better project management.

4 | Energy Next | June 2017

 VOLUME 7 | ISSUE 08 | JUnE 2017

w w w . e n e r g y n e x t . i n

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49
INNOVATIVE FINANCING

Innovative inancing
instruments need of the hour
Long terms funds are not always available with commercial banks,
hence, renewable energy developers require diferent solutions.

51
INNOVATIVE FINANCING

We want to make investing in

solar as simple as investing in
mutual funds
Sunfund helps customers to discover their solar
savings potential, understand long term implications
of different financing models and get offers from
India’s leading solar companies.

58 63
EVENT MNRE NEWS

SECI to launch ofshore Power minister

arm to boost demand in announces 1,000
ISA member MW wind energy
The online platform, titled Infopedia will auction scheme
provide an e-library with videos and reading
material on the best practices.

65
IREDA CORNER

IREDA
showcases
achievements
at events
The new rates would be The scheme is open for all
efective from April 1. obligated entities purchasing wind
power for compliance of their
non-solar Renewable Purchase
Obligation (RPO).

June 2017 | Energy Next | 5

 National Institute
PDF Compressor of Solar Energy, Gurugram provide services for
Free Version
assessing susceptibility of Potential Induced Degradation (PID) of PV
modules
The PV Module Test Lab, NISE is a NABL (National accreditation board for testing & calibration laboratories)
accredited laboratory in accordance with the standard IS/IEC 17025: 2005 for qualification testing of PV module as
per IEC 61215:2005/ IS 14286:2010. Testing of PV modules for susceptibility to PID is now important for any
large-scale PV project.
IEC 62804: Photovoltaic (PV) modules – Test methods for the detection of potential-induced degradation –
The IEC 62804 standard prescribes very specific test procedures for conducting the test, including:
a) Module temperature: 60 °C ± 2 °C.
b) Chamber relative humidity: 85 % ± 3 % RH.
c) Dwell: 96 h at the above stated temperature and relative humidity (not including stabilization).
d) Voltage: Module rated system voltage and polarities applied for the above given dwell duration and
during ramp down of temperature to ambient conditions.
MNRE Specification for the detection of potential-induced degradation:
The IEC 62804 standard have been modified by keeping in mind the harsh environmental conditions of
India. In India PV module failure rate is very high due to the hot and humid conditions, in order to simulate
the Indian operating conditions; NISE has initiated PID TEST as per the following MNRE specification.

Pre Stess Test PID Volatge stress Post PID stress

test test

•Precondition •Temperature: 85 °C ± •Visual Inspection

•Visual Inspection
•Maximum power
determination at STC
•Performance at Low
irradiance
•Wet leakage test
•Electroluminescence
•Ground continuty Test
2 °C. •Maximum power
•Humidity: 85 % ± 3 % determination at STC
relative humidity. •Performance at Low
•Dwell: 96 h irradiance
•cycle - 3 •wet leakage test
•Voltage: Module •Electroluminescence
rated system voltage

Pass Criteria after completion of the test, shall be meet as per MNRE specification
a) Power degradation at STC shall be ≤ 5%.
b) No dark area in the cell should be detected during EL Measurement
c) PV module shall meet the pass criteria of Visual Inspection and Wet leakage current test as per IEC
61215.
For More Information Please Contact

Deputy Director General (SPV)

National Institute of Solar Energy,
Gwalpahari, Gurgaon-Faridabad Road, Gurgaon – 122003 (Haryana)
Phone: 0124-2579084
Email: pvtf.nise@gmail.Com , csc.nise@gmail.com, Web: www.Nise.Res.In

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Push to clean power continues
I
ndia and China have surpassed
the United States to become the
two most attractive countries
for RE investment, a report by
UK accountancy firm Ernst & Young
(EY) said in an annual ranking of
the top 40 renewable energy markets
worldwide. India has moved up to
the second position from third in
this year’s ‘Renewable energy country
attractiveness index’ released by EY.
The credit for this has been awarded to
the combination of strong government
support and increasingly attractive
economics.
As such, generating finance for a wind
or solar project is no more a challenge as
banks and foreign institutional investors
(FIIs) not only understand this sector
better, they are willing to take exposure
at attractive terms. They kind of
commitment shown by the government
through policy initiatives are only
boosting their confidence.
The solar tariffs have come down to as
low as Rs 2.44 per unit at the auction of
500 megawatt of capacity at the Bhadla
solar park in Rajasthan, mainly due to
lower equipment and borrowing costs.
The industry has also comfortably
been able to raise funds in international
market in rupee as well as dollar that
FROM THE EDITOR
shows the confidence that investor have crores and the balance Rs. 2360 crores
shown in India and renewable energy would be raised in the year 2016-17.
sector. Various innovative renewable Such timely investments would not
energy instruments – masala bonds, only boost the sustainable infrastructure,
Green banks, securitization, partial risk but also facilitate achievement of the
and credit guarantee and asset backed ambitious energy-for-all mission. The
securities are being harnessed by the resources raised would be used for
developers. developing additional capacity in the
The Union Cabinet has given its sustainable energy sector that will result
approval to Raising of Bonds of Rs. 2360 in generation of additional employment
crores for Renewable Energy. The Bonds opportunities.
will be raised by the Ministry of New &
Renewable Energy (MNRE) through the
IREDA during the 2017-18. These funds
will be used by MNRE in the approved
programmes/schemes for solar park,
green energy corridor, generation-based
incentives for wind projects, viability
gap funding for solar projects, roof-
top solar, off-grid/grid-distributed and
decentralized renewable power, among
others. The Government had earlier
allocated Rs. 4000 crores to IREDA to
raise “GOI fully serviced taxable Bonds”
on behalf of the MNRE. Out of this
allocation, IREDA had raised Rs. 1640
KS Popli
Chairman & Managing Director, IREDA
June 2017 | Energy Next | 7
 LETTERS TO THE EDITOR

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Most informative magazine

Energy Next is one of the most informative
magazines in India that provides latest,
crisp and exclusive coverage of the energy Enabling Investment Environment
sector. Energy Next puts in great efforts to
present to its readers’ rich quality content Editor-in-Chief K S Popli
in an easy way to understand the latest on Publications Director Anupam Datuar
trends along with expert opinions from Associate Editor Fozia Yasin
Industry leaders. I wish Energy Next Associate Editor Anurima Mondal
magazine continued success and growth in Sr. Correspondent Sagarika Ranjan
the times to come. Design Flying Tusker Media
ll Rajesh Prothi, Managing Director, Marketing Manager Abhinav Dutta
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Complete Coverage his is truly a keeper’s issue. it provides on all renewable

ll Varun Kumar, Engineer,
For the latest Renewable Energy news.
energy verticals. Interviews log on to www.energynext.in
New Delhi of the stalwarts carreid in
the magazine is something I
Events Calendar really look forward to every Energy Next is printed by R Ramprasad and published
I would like to compliment month. I can look forward by R Ramprasad on behalf of

Your May issue on Rewa gave
a complete overview of the
project. While the landmark
project has been creating
ripples, one was keen to know
the details like the way bids
were conducted and how the
developers managed to clinch
team Energy Next especially for
their event’s page. he details
are very helpful and it helps
plan for these important events
in advance. Also the updates in
the news column and actually
the whole journal helps us
know about the developments
in the green energy sector, both
of India and abroad.
ll Vishal Sinha, Hyderabad
to a Rewa-like coverage on
Wind energy and electric
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ll Rakesh Singh, Noida
Future expectations
Your articles explore every
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8 | Energy Next | June 2017


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Piyush Goyal: GST regime will have
no impact on renewable power
T
he GST regime will have no impact
on renewable power rates as
these tarifs are already touching
new lows, there was no need
for lower taxes to encourage clean energy
in the country, Minister Piyush Goyal said.
“We don’t need support of lower taxes to
encourage renewable energy. By itself, it is
good for the nation. It reduces pollution. It
gives discoms 25-year-long afordable power
at prices which are even below grid (parity
price),” Goyal said.
he minister said, “Solar power prices have
gone below grid parity. Wind power prices
are also almost at grid parity despite only one
bid (auction for 1GW).” He added that the
situation today is very diferent from the past as
“we can stand on our feet”. Goyal said, “Twenty
ive years later, other forms of power would be
3-4 times higher. Solar, wind and hydro would
be afordable forms of power. I don’t think GST
rates will impact my sector’s tarif.”
Meanwhile, the GST regime got a mixed
GST
Piyush Goyal @PiyushGoyal . Apr 6
response from the industry.
According to consulting irm, Bridge to I congratulate the nation
India, the new rates would hit more than 10 on the historic passing of
GST. The unanimity across
gigawatt of ongoing utility scale solar power the political spectrum
projects and pose a threat to their viability. in national interest does
he irm, however, clariied that they India proud
believe long-term prospects of the industry
would not be impacted by GST move as an
increase in tax rates will be quickly ofset by Piyush Goyal @PiyushGoyal . Apr 6
falling costs. GST has become a reality
now where a few months
ago it was inconceivable
that all States & UTs would
become One Nation, One
Market
“A commercially viable, non-subsidy
dependent sector is naturally more
sustainable in the long run. However, we do
wonder why solar equipment is attracting
higher taxes than coal or other power
equipment,” it remarked.
 NATIONAL NEWS
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Paris or no Paris, India committed to preserve climate: PM
P rime Minister Narendra Modi and
France President Emmanuel Macron
will “continue working above and beyond”
the Paris Agreement on climate change
India’s renewables plan gets boost
A ter the Paris agreement, India is walking
on a strong renewable energy path. While
Chinese investments are gradually increasing in
solar energy, its investments in thermal power
plants is slowing down. As per a recently-
released report of the Global Environmental
ISA gets approval from ive African countries
I nternational Solar Alliance – the key
renewable energy initiative of India
got boost when Djibouti, Comoros, Cote
d’Ivoire, Somalia and Ghana signed
the ISA framework agreement on the
sidelines of African Development Bank
(AfDB) meeting in Gandhinagar.
The ISA Framework Agreement was
opened for signature during AfDB
10 | Energy Next | June 2017
despite America’s exit from the deal. Talking
about the climate change deal, Modi said that
protecting the environment is an article of faith
for India and a part of its tradition that respects
nature. “It is our duty to give a git to the next
generation,” he added. Modi arrived at the
presidential Elysee Palace and hugged Macron.
he pictures contrast with Macron’s white-
knuckle handshake with Trump in Brussels
last week. He further said that the French
centrist’s election had “encouraged the whole
world”. According to Modi, protecting “mother
Earth” was part of Indian culture. “For Indians,
environmental protection is a profession of faith
Institute (GEI), China’s overseas investment,
including in India, into 240 coal power plants
along the Belt and Road Initiative has slowed
down in 2016 ater the Paris Agreement on
Climate Change.
India was a top destination for fossil fuel
infrastructure investments but now there is a
noticeable spike in solar investment by Chinese
irms as per a inancial expert in India. Reports are
doing the rounds that China’s top solar module
manufacturer GLC-Poly energy is in talks with
India’s Essel group to set up a solar module
manufacturing facility in India this year.
meeting between May 22-26. Comoros
had also submitted its ratification
instrument. Finance Minister Arun
Jaitley graced the signing and
ratification ceremony that was organised
by the Ministry of External Affairs.
Launched at the UN Climate Change
Conference in Paris on 30 November
2015, the ISA initiative was the
brainchild of Prime Minister Narendra
Modi. It is conceived as a coalition
of solar resource rich countries to
address their special energy needs. The
foundation stone was laid by the Prime
Minister of India and the President of
France in National Institute of Solar
Energy, Haryana on January 25, 2016.
because we learn it in the Vedas. Paris or no
Paris, our commitment to preserving the
climate is for the sake of future generations,”
he said. “I said it then, I say it now. We
must leave for our future generations a
climate wherein they can breathe clean air
and have a healthy life.,” he asserted. And
emphasised that India had been working
to protect the environment even before
the Paris deal in 2015. Donald Trump has
pulled US out of Paris climate change deal
agreed by more than 190 nations. He said
it unfairly beneited countries such as India
and China.
India surpass U.S.
as most attractive
renewables market
A ccording to a recently published
report by Ernst & Young, India, along
with China, has surpassed the United States
to become the most attractive countries for
renewable energy investment.
In an annual ranking of the top 40
renewable energy markets worldwide
in terms of allure, China ranked first,
followed by India.
he United States, which ranked
the highest last year, slumped to third
place, due to a shit in U.S. energy
policy under President Donald Trump.
Among European countries,
Germany, France and Britain ranked
fourth, eighth and tenth. “he UK’s
reappearance in the top 10 is the
result of other countries falling away -
notably Brazil, which cancelled a wind
and solar auction in December - rather
than any particularly encouraging
resurgence,” said Ben Warren, EY’s
head of energy corporate inance.
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 NATIONAL NEWS

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Indian Railways to save Rs 41,000 crore in next 10 years

R ailway minister Suresh Prabhu has

announced that the railways will save
Rs 41,000 crore in the next 10 years on
India have already been electriied so far,
Prabhu aims to double it in next 15 years.
“We have the funding and have already
energy cost on account of its thrust on started awarding contracts to new agencies.
power generated from solar energy. It will reduce cost and increase eiciency,”
“In the next 10 years, the railways he said, adding that the railways is
will save Rs 41,000 crore in energy. By committed to reach the target of generating
electriication, we will reduce diesel 1,000 MW solar power across the country
consumption. Solar generation will help in the coming years.
the environment too,” Prabhu announced “Work is on to achieve the target. We
during an event. will also focus on having LED lamps in
While 42 per cent of railway tracks across railways,” he announced.

Solar power tarifs reach Rs 2.44 per unit MoAs signed for irst
announced power minister Piyush Goyal wind auction scheme
Through micro-blogging site.
Goyal tweeted that Solar Energy
Corporation of India (SECI) is
developing the 500 MW solar park
at Bhadla with Saurya Urja Co. of
Rajasthan Renewable Energy Corp. Ltd.
“The auctions began at 2 pm yesterday
(Thursday) and have been concluded at
10 am today. The tariffs for the first 200

S olar power tariffs in India have

dropped to a new record low of Rs
2.44 per unit as per the bidding that
has been recently concluded for Bhadla
Phase-III Solar Park in Rajasthan
“Latest solar power auction at
Bhadla Solar Park 3 sets new record
with electricity tariff of Rs 2.44/unit,”
Arun K Tripathi takes over as DG NISE
MW were at Rs 2.44 per unit while the
rest 300 MW were at Rs 2.45 per unit,”
added SECI Managing Director Ashivini
Kumar.
Apparently, renewable energy firm
ACME has bagged 200 MW and SBG
Cleantech has bagged the rest 300 MW
at Bhadla phase-III.
T he Memorandum of Agreements
for purchase of 1000 MW wind
power under were signed between
PTC India and Discoms of Uttar
Pradesh, Bihar, Jharkhand, Delhi,
Odisha and Assam.
As per MoAs, the Discoms of UP,
Bihar, Jharkhand, Delhi, Assam, and
Odisha will buy wind power of 449.9
MW, 200 MW, 200 MW, 100 MW, 50
MW and 50MW respectively.
he Letter of Award (LoA) has

A run K Tripathi takes over as Director General of

National Institute of Solar Energy (NISE). An
engineering graduate, he obtained M Tech from IIT
Kharagpur and PhD from IIT Delhi in the field of biomass
energy. He has also acquired MBA in Environmental
Management.Tripathi is an adviser in the Ministry of
New and Renewable Energy and has over three decades of
experience in planning, development, and implementation
of various renewable energy programmes particularly on
biogas development, biomass gasification, solar rooftops,
waste to energy, village energy security, solar cities, green buildings and information
and public awareness in the country.
been issued to the developers by Solar
Energy Corporation of India (SECI)
under the irst wind auction scheme
have been conducted by Solar Energy
Corporation of India (SECI) on April 5.
This was the first time such
auction process was done in the
country for wind power through
e-reverse auction and its success can
be seen from the fact that a record
low tariffs of Rs. 3.46 per kWh was
achieved.

12 | Energy Next | June 2017

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 STATE NEWS
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Hyderabad Airport Marching Towards 100% LED
G MR Hyderabad International Airport
Ltd. (GHIAL) which operates Rajiv
Gandhi International Airport (RGIA),
Hyderabad, has announced that it has
become South India’s first and India’s
Odisha villagers use solar lights to scare wild elephants
B aghuapat village is located on
the fringes of the Satkosia Gorge
Sanctuary in Odisha. As Baghuapat is
Andhra Pradesh tops in solar power
W hen it comes to solar capacity,
Andhra Pradesh has topped the
chart with accumulative generation
capacity of 1,867 MW. Rajasthan, Tamil
Nadu and Telangana are at second third
and fourth positions with 1,812 MW and
1,691MW respectively.
The Union Power Ministry has
estimated that the country has solar
power potential of 748 GW. Almost 5,000
MW of rooftop solar and 10,000 MW of
large-scale solar projects would be added
14 | Energy Next | June 2017
second airport to convert the entire
Taxiway Edge Lights from halogen lamps
to energy efficient LEDs (Light Emitting
Diodes). Complementing the recently
achieved recognition of being Carbon
yet to be electrified, the villagers and
the residents were struggling to deal
with wild elephants. However, now they
have started using solar-powered lights
as soon as the sun sets as the lights kept
them away.
“Encountering wild elephant is a
routine affair for us. It is difficult to
drive their herds away. The best option
was to stay away from the animals. The
lights have become our only defence
against the elephants,” said Tilottama, a
resident of Baghuapat village.
The village was introduced to solar
lights by the Foundation for Ecological
Society (FES), an Angul-based NGO,
and TERI, a non-profit research
organisation.
in the current financial year. Meanwhile,
the cost of solar panels have decreased in
past five years.
Neutral Airport (Level 3 + Neutrality),
GHIAL is on its green journey of
transforming RGIA into a 100% LED
airport, out which 75% of the work has
been already completed.
RGIA, which currently caters to more
than 15 million passengers per annum
(FY16-17) with close to 400 daily air traffic
movements, requires consistent supply of
electricity to operate round the clock. With
its mission to move from conventional
energy to renewable energy sources for
environmental sustenance, the airport had
recently commissioned a captive 5MW
solar power plant for its captive use.
Delhi to get power
from wind energy
D elhi is all set to get power
generated from wind as Reliance
Infrastructure owned-BSES Rajdhani
Power Limited (BRPL) has signed a
Memorandum of Agreement with PTC
India Ltd for procuring 100 MW wind
power. Starting from November 18,
2018, the power will be available for 25
years at a competitive tariff of Rs 3.46
per unit,
“In line with government’s push for
the renewals, BRPL has taken the lead
Delhi in championing the cause of
wind power. This agreement will help
BRPL fulfil its Renewable Purchase
Obligations (RPO),” said BRPL Chief
Executive Officer Amal Sinha.
The 1,000 MW wind power project
would be installed in Tamil Nadu and
Gujarat by four winners of bids. This
was the first time when competitive
bidding was conducted for wind power
in India. The bid was executed by SECI
(Solar Energy Corporation of India).
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 STATE NEWS

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Haryana govt exempts solar devices from VAT Andhra Pradesh

to loat tenders for
W ith an aim to promote solar and
encourage entrepreneurs to
set up manufacturing of these items,
battery-backed solar
Haryana government has exempted solar projects
devices, equipment or parts used in the
installation of solar power projects from
Value Added Tax. Devices include solar
lanterns, solar home systems, stand-
alone street lighting systems, solar water
heating systems, solar water pumping
systems, solar inverters, solar cooker
boxes and solar photovoltaic modules.
A notification was issued by Power
Secretary Ankur Gupta on May 8. The
with a limit of Rs 20,000 per KWP for
certain categories of the buildings for
A ndhra Pradesh is all set to float
tenders for two solar parks to be
taken up on a pilot basis. According
government is also giving subsidy at the setting up of grid-connected rooftop to power secretary Ajay Jain, two pilot
rate of 30 per cent of the benchmark cost solar power plant in Haryana. projects of 5 MW capacity of solar
along with storage systems would be
taken and the power generated would
Gujarat tops in discom rankings be used in irrigation.
The state might also operationalise

A s per the rankings released by Union

power ministry, four power distribution
companies of Gujarat have performed well
and topped the list for the ith year in a row.
Along with Gujarat, Himachal Pradesh was
amongst the best performers in cost coverage.
Other discoms, namely, Tamil Nadu
Generation and Distribution Corporation,
Kanpur Electricity Supply Company,
Madhyanchal Vidyut Vitaran Nigam and
Jodhpur Vidyut Vitaran Nigam have shown
more than 15 per cent improvement on this
parameter. “here has been an increase in
the number of utilities that have iled tarif
petitions for 2017-18 on time,” the report said.
While utilities that lagged behind had
faced high technical and commercial losses,
utilities that fared well had made noteworthy
improvements in curbing transmission
losses, tarif realisation and lowering the cost
of power supply.
he rating methodology assisted by
Central Electricity Authority, Central
Electricity Regulatory Commission, Power
Finance Corporation, Rural Electriication
Corporation, distribution utilities and credit
rating agencies CRISIL, Icra and CARE, was
developed by the power ministry in 2012.
local grids where the produced power
is locally consumed. The battery
storage technology is likely to get
more accessible and inexpensive with
its mass adoption in coming years.
The two pilot projects will
reportedly be taken up as a part of
the larger solar parks dedicated to
local requirements in the agriculture
sector. Andhra Pradesh is factoring
the huge impact the renewable energy
sector capacity would bring in the
system. The declining prices of power
from solar generation power plants
was seen at the Bhadla solar project
in Rajasthan where it attained the
tariff of Rs. 2.44 per unit.

Haryana to construct small hydro projects

H aryana Government is working on
small hydro projects along with major
projects such as Renuka and Lakhwar Dams.
either been completed or is near completion.
he minister has also inaugurated and laid
foundation stones of various projects related to
power and water supply.

Chief Minister Manohar Lal has conirmed

that around nine sites have been earmarked
in the Shivalik area for construction of small
dams. He also added that subsidies and other
incentives would be provided so that farmers
adopt drip and sprinkler irrigation techniques.
he state government has made about 3,600
announcements, of which work on 1,600 has

16 | Energy Next | June 2017

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 INTERNATIONAL NEWS
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Abu Dhabi closes $ 872 million inancing for
world’s largest solar plant
A bu Dhabi’s government-owned power
utility has closed a 3.2 billion dirham
($872 million) inancing package for the
world’s largest solar power plant. Director
General Saif Saleh al-Sayari conirmed that
Abu Dhabi Water & Electricity Authority
(ADWEA) raised $650 million in debt with
the remaining $222 million raised in equity
Japan’s Marubeni Corp and China’s
JinkoSolar Holding were selected to construct
and operate the 1,177 megawatt plant.
“he inancing which is completed is
a $650 million project inance from local
Solar power output hits record in Britain
S olar power output in Britain recently
hit a record as the country basked in a
heat-wave. A record high of 8.7 gigawatts
(GW) of electricity was produced by
solar panels at their peak on Friday,
contributing more than 24 percent of
Britain’s electricity supplies, said power
grid operator National Grid.
18 | Energy Next | June 2017
and international commercial banks,” said
Al-Sayari. He also added that the loan will
enable reinancing ater ive years.
Bank of Tokyo Mitsubishi, Sumitomo
Mitsui Banking Corporation, Mitsubishi
UFJ Trust and Norinchukin Bank were
the three leading arranger of the loan.
Apparently, French Banks - BNP Paribas
Credit Agricole, Natixis - and First Abu
Dhabi Bank were also part of the deal.
he equity portion will be contributed
by ADWEA and the project developers
Marubeni and JinkoSolar.
The previous record was 8.48 GW, set
on May 10. Britain’s Met Office added
temperatures could reach up to 30 degrees
Celsius in some parts, with the country
poised to beat previous temperature
records for May. Solar power capacity has
increased from 2 GW to 12 GW in five
years.
Iowa senator
condemns energy chief
for undermining wind
energy
I owa’s Republican senator Chuck
Grassley says that U.S. Energy
Secretary Rick Perry has commissioned
a ‘hastily developed’ study of the of the
electric grid that seems to be ‘geared to
undermine’ the wind sector.
Grassley asked a series of questions
in a letter regarding the 60-day study he
commissioned. Grassley also said the
results were pre-determined and would
show that intermittent energy sources
like wind make the grid unstable.
“I’m concerned that a hastily
developed study, which appears to
pre-determine that variable, renewable
resources such as wind have undermined
grid reliability, will not be viewed as
credible, relevant or worthy of valuable
taxpayer resources,” wrote Grassley,
whose state is home to a booming wind
energy industry.
Last month, Perry ordered the
grid study and that incentives for the
deployment of renewable energy had
come at the expense of conventional
energy sources.
Grassley showed an example of his
state Iowa that gets 36 percent of its
electricity from wind. He further said
that its largest utility MidAmerican has
the ninth lowest electricity rates in the
country.

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ISA will help mobilise $1000
billion by 2030: Tripathy
he Common Risk Mitigation Mechanism works the best when there are more
economies and this is where the partnership of the ISA becomes important
From let -- Isabelle Kocher, Alexandre Ziegler and Upendra Tripathy share a light moment at the ISA-TWI Leader
Session, held at he Leela Palace in New Delhi
I
n last couple of years solar energy
has grown in leaps and bounds
across the world and countries
are deliberating around the world
on tapping this huge energy potential.
Recently, giving a boost to the renewable
sector, the USA agreed to formalize the
International Solar Alliance (ISA).
To deliberate on how the ISA is going
to play a role in the renewable sector,
experts, researchers, representatives from
the industry and the government came
together at the International Solar Alliance
-Terrawatt Initiative leader session on “De-
risking investment in renewable energy” was
organized by Terrawatt Initiative recently in
New Delhi.
Following the withdrawal of objections
by the US, several countries have
signed the ISA. The dignitaries who
graced the session included Alexander
Ziegler, Ambassador of France to India;
UpendraTripathy, Interim Director General
of ISA; Isabelle Kocher, Chairperson of
Terrawatt Initiative; Dr Arunabha Gosh,
CEO at Council of Energy, Environment
and Water; Akshay Jaitly, Partner with
Trilegal; Jean Pascal Pham-Ba, Secretary
General and Spokesperson of Terrawatt
Initiative besides others.
Speaking on the occasion, Dr Arunabha
Gosh, CEO at Council of Energy said, “he
idea is to develop a tool that is simple and
afordable for the participating countries.
he countries would pool the risks such as
currency, inconvertibility, political risks etc.
which would help reduce the cost that would
otherwise be borne by a particular country
or a particular project developer. “If we could
do this, we could signiicantly bring down
the cost of the tarif and help scale up the
renewables even further.”
he Common Risk Mitigation Mechanism
works the best when there are more economies
EVENT
and this is where the partnership and leadership
of the International Solar Alliance or ISA
becomes important, explained Gosh.
Talking about the legal practices, Akshay
Jaitly said, “he importance of the pricing risk
was particularly signiicant for the long-term
investors who have to live in the regulatory
environment of a country”.
Introducing a UNDP-based inancial
model, Jaitly said that the model, with its
20 diferent regulatory risks gives investors
a tool not only to build their tarifs on the
basis of traditional input costs but help them
compare their costs against that of the other
countries as well.
Jean Pascal Pham-Ba elaborated on the
operationalization of the operational part
of Common Risk Mitigation Mechanism
while Ziegler said that the ISA was one of
the most rising initiatives. Encouraging the
guests from the industry present at the event,
Ziegler explained how important was the
support from the private sector.
“India has made very impressive
achievements,” said Ziegler adding that “We get
better together.”
Speaking on ISA, Tripathy said that the
ISA believes everyone should have access
to energy. “India is trying to tell other
prospecting member countries that solar can
make fundamental diference in the lives of
those around.
ISA will help mobilize $1,000 billion by the
end of 2030, he said adding that ISA believes
that the wait for energy access to all will not
take a very long time and can be achieved in the
irst quarter of the present century.
All the panelists expressed great hopes for
the ISA. With the USA’s positive response, a
lot of prospective partner countries are now
actually partner countries thus paving way
for a brighter future for solar sector across
the globe.
June 2017 | Energy Next | 19
 COVER

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Innovative
solutions in
renewable
energy
inancing

Welcome to the changing dynamics in the solar energy jungle. Today, the
roar of the Indian lion is next only to Chinese dragon in the renewable energy
investments. India has overtaken the US to become the second-most attractive
country ater China for RE investment

I
n the last 3 years since the launch
of “Govt. of India’s Target 2022” of
“24X7,“Afordable power for All”, around
10 GW of solar capacity has already been
added to 2014 base of 2.6 GW.
As of March 31, 2017, renewable energy
sources aggregating to 12.6 GW accounted for
17.5 percent of all power generated in India.
Financing constitutes 70 to 80% of the
CAPEX and around 80% + of OPEX. hus
it remains the most critical success factor of
Renewable Energy projects. Indian corporates
are recently witnessing their leadership slip to
foreign Companies or those backed by global
long term Funds, due to the availability of
cheaper, long term adequate funds with these
global investors.
he inancing challenge is further increased
due to the constantly lowering of tarifs. his is
further highlighted in the backdrop of recent fall
in solar tarif to a jaw dropping level of 2.44 per
unit his is actually a V. steep drop of more than
40% in the tarifs from more than Rs.4.50 per
unit ; a year ago.
Traditional inancing fails at times like this
when the return on investment practically
becomes invisible. his is the time for exploring
Innovative Financing with a focus on all its three
elements viz :
• Adequacy,
• Cost Efectiveness &
• Timely Availability

20 | Energy Next | June 2017

 MARkING PROGRESS

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I clearly feel that innovative inancing shall
continuously play an important role in shaping $30bn
up the ever growing Renewable Energy space.
he two main functions which seems to
be impacting solar tarif is the “Technology &
its upgradation” coupled with the “Improved $20bn
Conidence” of global investors in to Indian solar
energy space.
2.7
his Improved Investors conidence is
travelling on the back of the following four $10bn
important pillars:
• Transparency (in the bidding process)
• Lowered Risk
• Credit Enhancement by the Otaker $0bn
• CECLP Phenomenon United France China Germany Nether- Sweden India Canada Norway Japan
States lands
While transparency has been achieved as a
national phenomenon; lowered risk & credit India currently ranks 7th for total labelled green bond issuance
enhancement by otaker are functions of better
Green Bonds of 2016: Indian labelled green bonds, Jan to Sept
structuring achieved with the support of global
DATE ISSUER AMOUNT COUPON CERTIFIED/REVIEWED THEME
experience including World Bank at times.
Feb 2016 Hero Future Energies INR 3bn 0 Climate Bonds Standards Renewable enegy
What is of critical relevance to this
May 2016 PNB Housing Finance INR 5bn n/a n/a Low carbon buildings
deliberation is the CECLP phenomenon which
June 2016 Axis Bank USD 500m 2.875 Climate Bonds Standards Renewable energy, low carbon
is the acronym for “Cost Efective Capital for buildings and transport
Larger Projects”. Single location large project Aug 2016 ReNew Power INR 5bn 10.4 Climate Bonds Standards Renewable energy
in fact ofer tremendous opportunity for larger Aug 2016 NTPC INR 20bn 7.375 Climate Bonds Standards Renewable energy
capital deployment & higher economies of scale Aug 2016 Greenko USD 500m 4.875 Sustainalytics Renewable energy
besides creating the possibility of structuring
Sep 2016 YES Bank INR 3.3bn n/a n/a Renewable energy
innovative inancing solutions for Renewable
energy. DEBT Financing not only plays a critical
role to the extent of 70% to 80% of CAPEX
but also igures as the most critical OPEX India Added 18.7 GW Renewable Energy Capacity In 4 Years
outlow towards its servicing. he increasing 4.0
3.8
pressure of international investors backed by
On-grid Renewable Energy Capacity (In GW)

sovereign national funds & global leaders of 3.2

institutionalized capital clearly proves the point 3.0
that the deeper pockets are deploying funds in
the Clean Energy operations of India, with a
2.3
20 to 25 years outlook on India’s growth story. 2.0
2.0
Recent bids exhibiting the presence of South 1.7
Africa’ Phelan, Sot Bank Cleantech, France’s
1.3
Solairedirect are clearly some cases in point. his 1.0 0.8
0.8 1.0 0.7
continuously increasing attraction shall continue
0.6 0.5
in times to come. Innovative inancing shall
0.0
continuously play an important role in shaping 2013-14 2014-15 2015-16 2016-2017
up the ever growing RE space.
Solar Wind Other
he four innovative inancial instruments are :
• Green Bonds NOTE:*Includes small hydro, biomass and waste to energy

• Credit Enhancement
• Masala Bond domestic & international investors. Typically the Recent issuances of EXIM Bank, YES Bank & by
• InvITs global climate change & climate control funds as Renew Power are all beads in the same golden
also CSR funds seeking Green (Clean) Energy as threads. he lowered cost of fund help achieved
ll Green BondS a mission destination & generating some returns lowered tarif & a resulting WIN-WIN for all the
he Green Bonds typically represents funds alongside are clearly allowing the interest tag on stakeholders.
raised by the Clean Energy companies from Green Bonds constantly become more favorable. Green bond issuance up 42% in irst quarter

June 2017 | Energy Next | 21

 COVER | MARkING PROGRESS
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of 2017.Globally, total green bonds issuance
stood at $21.76 billion during the irst quarter Masala Bonds: Recent Indian Issues
of 2017, up nearly 42 per cent from the issuance Size
Issuer Issue date Tenor Coupon Listing
during the same period last year – according to (Rs. in crores)
the Climate Bonds Initiative. NHAI 12/05/2017 3,000 5 yrs 7.30% LSE-AIM
LSE-AIM &
ll CredIT enhanCemenT
NTPC 25/04/2017 2,000 5 yrs 7.25%
SGX
Credit enhancement has remained as one of the Shriram
20/01/2017 475 3yrs 1 month 8.25% SGX
most unique inancial product for infrastructure Transport
projects seeking global money. he guarantee ECL
30/10/2016 502 3yrs 2 month 9.05% SGX & SEM
support of stronger national & international Finance
institution provided for a fee to any Clean Fullerton 18/10/2016 500 3yrs 1 month 8.125% SGX
Energy company (which could typically be rated
India Bulls 07/09/2016 1,300 3 yrs 8.57% SGX
say around BBB or A, A- ) would be able to get a
LSE-AIM &
rating of around AAA. his shall enable it to seek NTPC 10/08/2016 2,000 5 yrs 7.375%
SGX
global money from long term Pension, Sovereign
& Insurance Funds (which could otherwise not HDFC 21/07/2016 3,000 3 yrs 7.875% LSE-AIM
be able to invest in their lower rated bonds).
hus creating a market place enviable for Clean corporate players deploy the cost efective Six (6) InvITs have already been
Energy companies. funds in competition to the global companies conceptualized. Four (4) are in planning
in solar energy bids which continue to stage & two (2) in pipeline. Out of these
ll maSala BondS witness lowering solar tarif. four (4) , two (2) InvITs have already raised
Masal Bonds are rupee denominated bonds money aggregating to around Rs. 7,000 Cr.
with their coupon rates to be serviced in rupee ll InvIT (approx.) wherein Rs. 1700 Cr. scheduled to
as well & thereby bearing no liability in foreign InvIT is an acronym for Infrastructure be returned to the banks. he balance two (2)
currency. he currency rate is thus transferred to Investment Trust which represents a Trust InvITs are expected to raise another Rs. 4,000
investor rather than borrower. registered with SEBI formed with an objective Cr. with an aggregate returning of Debt being
Masala Bonds: Recent Indian Issues to invest in infrastructure projects directly around Rs. 2,000 Cr.
Masala Bonds are most innovative inancial or through their SPVs. It has the potential of Many more Innovative Financing
product bearing their origination to IFC’s emerging as one of the strongest innovative Instruments, Processes & Structures shall
irst Rupee Bond raised internationally in inancial products, allowing the unlocking of not be demanded & delivered in the coming
September 2015. hereater various Indian only Equity but also of Debt. months. Time shall also report our success
corporates & more like HDFC, NTPC & now InvIT have created deleveraging of the on each of the above.
NHAI recently have further raised around Rs. Balance Sheets of infrastructure companies. Let’s keep our ears on the ground & eyes
12,770 Cr. as path breakers in this direction. InvITs are also unlocking equity & a causing on the targets!.
I strongly urge Clean energy companies to a return of Debt funds borrowed from the Sanjeev Gupta is Financial Advisor & Head —
explore every possibility of using this rupee bankers. his has not only created healthy Banking and Finance, NSEFI, & MD NexGen
Financial Soultions Pvt. Ltd.
borrowing option from global investors for situation for bank but also capacity for
The views and opinions expressed in this article
bringing cost efective debt fund into Indian infrastructure companies to borrow a fresh are the author’s own and do not necessarily
represent the views of the magazine.
Solar play. his shall further help Indian for new projects.

Potential Refinancing by InvITs

(INR billion) Issue size Refinancing
50 46.5
40
30 25.0 26.5
18.0
20 12.5
8.0 8.5 7.2
10
0
IL&FS Transportation IRB InvIT Fund Reliance Infrastructure InvIT India Grid Trust
Investment Trust Fund
Source: Ind-Ra

22 | Energy Next | June 2017

 From Mega watts to Giga watts
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Envisioning a Greener Tomorrow with Renewable Energy

ENCOURAGING GREEN-POWER TODAY

ENERGISING INDIA’S TOMORROW

Energy for Ever

Loan Sancions (Rs. Crores) (2012 - 2017) Loan Sancions

12000
Gol’s target of 5x increase 4th largest wind 10,199
in renewable energy capacity installations in the 10000
to 175,000 MW by 2022 world
7,806
8000

6000
4,540
4000
3,747 3,818
CO2
2000

One of the largest All IREDA funded projects 0

2012-13 2013-14 2014-15 2015-16 2016-17
solar programs in the world are helping in avoiding
with planned capacity of CO2 emissions
100 GW by 2022 Funded more than 2,382 renewable energy projects

Indian Renewable Energy Development Agency Ltd.

(A Govt. of India Enterprise)
A Mini Ratna PSU under Ministry of New and Renewable Energy
www.ireda.in
Corporate Office: 3rd Floor, August Kranti Bhawan, Bhikaiji Cama Place, New Delhi 110 066, Tel: +91 11 26717400 - 26717412
Registered Office: India Habitat Centre, East Court, Core-4A, 1st Floor, Lodhi Road, New Delhi 110003, Tel: +91 11 24682206 - 24682219
 COVER

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Innovation
partner to India’s
re mission

India needs $100 billion of investments for 100 GW of solar energy capacity
by 2022, a part of the 175 GW target. To raise this inancing, the World Bank
is supporting India through a portfolio of renewable energy engagements
amounting to $1 billion, says Surbhi Goyal, Energy Specialist at the World Bank

One of the most important pillars in achieving
these targets is the Government of India’s goal to
install 175 gigawatts (GW) of renewable energy
capacity by 2022. Of this, 100 GW is to come
from solar energy. his translates into about
US$100 billion of investments in the solar energy
sector itself. To raise this inancing, the World
Bank is supporting India through a portfolio
of renewable energy engagements amounting
to US$1 billion. About20 percent of the World
Bank’sportfoliois being supported through
concessional funding from Clean Technology
US$100 million in inancing under the ‘Shared
Infrastructure for Solar Parks Project’. he
project, being implemented under theMinistry
of New and Renewable Energy’s Solar Park
Scheme, is currently helping establish the Rewa
Ultra Mega Solar Park and the Mandsaur Solar
Park, which will have a cumulative capacity
of 1,000 MW. Funds will be invested in the
parks’ common (or shared) facilities such as
the transmission evacuation system, etc. Other
potential solar parks are to follow.
he World Bank Group has also deepened

I
ndia has embarked on an aspiring journey
to attain its Nationally Determined
Contributions (NDC) targets by 2022.
he most important of these targets is to
reduce the emissions intensity of the country’s
gross domestic product by 33-35 percent from
2005 levels, as well as to increase theinstalled
capacity of non-fossil fuel electric generation to
40 percent by 2030.
Funds, under which funds are available for 40
years at a marginal interest rate.
In 2015, the Government of India ramped
up itstarget for solar energy ive-fold - from
20 GW to 100 GW. Of this, 40 GW is to be
added under the solar park scheme. To help
India establish large scale solar parks, the
World Bank is providingIndian Renewable
Energy Development Agency (IREDA) with
its engagement in the Rewa Ultra Mega Solar
Park through the role played by the International
Finance Corporation (IFC) asthe park’s
transaction advisor. he IFC has helped the solar
park developer (Rewa Solar Ultra Mega Limited
(RUMSL) todevelop an innovative business
model that ofers a “plug-and play” facility to
investors. his hasinstilled conidence in private
developers and helpedreducecosts, which was

24 | Energy Next | June 2017


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relected in the landmark low tarifs that were
bid for the facility. RUMSL is a joint venture
between Solar Energy Corporation of India
Limited (SECI) and Madhya Pradesh Urja Vikas
Nigam Limited (MPUVNL), the state nodal
agency of Madhya Pradesh.
Since the availability of clear land is one of
the major factors in attracting international
players to a country and a project, the World
Bank is also helping make such investments
more robust. In the Rewa solar park, for
instance, the World Bank’s presence during the
planning phaseenabled RUMSLin adhering to
environmental and social norms at international
standards.Since the due diligence on the
safeguards was very deep, developers were able
to mitigate the risks around land and attract
international investors, bringing down tarifs.
Considering the enormous need for
manpower that will emanate from the Rewa
Solar Project, the World Bank has, at the request
of the Madhya Pradesh government, undertaken
a capacity assessment of educational institutions
in and around Rewa district to identify where
relevant technical training courses can be
introduced. Given the Government of India’s
scaled up targets for solar energy and its thrust
on the Skill Development Mission,the Madhya
Pradesh pilot can be scaled up at the national
level, creating a sustainable ecosystem around
solar parks which can meet the industry’s need
for trained workers as well as directly beneit
the people by providing them with employment
opportunities. In the longer run, this is also
expected to ensure the sustainability of such
investments. For these activities, which go
beyond usual inancing, the World Bank has
dipped into multiple sources of grant funds,
such as the Korean Green Growth Trust Fund,
the Asia Sustainable and Alternative Energy
Program, and Austria’s South Asia Clean Energy
Trust Fund.
Given the weak distribution sector,
the Government of India has recognized
the importance of the introducing credit
enhancement mechanisms. he latest in
this is the inclusion of SECI in the tripartite
agreement with the Reserve Bank of India
and state distribution companies. To further
the Government’s agenda, the World Bank
is exploring the possibilities of setting up a
payment security mechanism to mitigate the of-
taker risk for renewable energy tenders planned
inselect states. he objective is to attract new
sources of international debt and institutional
equity investment into the sector while reducing
price disparity between competitively bid tarif
auctions held by central sector utilities and state
utilities.
In the solar rootop segment, where also
India has set a target to establish 40 GW of
installed capacity by 2022, the uptake has been
modest - a little more than 1,000 MW has been
installed so far. As the major bottleneck in this
segment is limited capacity, the World Bank has
come forward with a US$625 million facility
with the State Bank of India to improve the
‘ease of doing rootop business’ and to build
the capacity of various stakeholders, be they
inancial institutions, developers, regulators or
state agencies. he program aims to improve
the investment climate for solar photovoltaic
segment and galvanize the Indian market by
supporting developers, aggregators and end-
users wishing to setup solar PV projects on
commercial, industrial and institutional rootops.
In spite of India’s recent progress in installing
solar capacity, the scale required to reach 100
GW solar by 2022, with a requirement to add
18 GW of solar capacity per annum for next
ive years, is still enormous. It will therefore
be important toleverage limited resources in
the best possible manner. In a country like
India, where large tracts of land are diicult
to identify, it will be important to venture
into new technologies such as combining
solar installations with wind energy solutions.
Such hybrid plants, which may or may not be
combined with energy storage solutions, will
ensure eicient use of common facilities such
as evacuation system and land, amongst others.
It will also help in containing the variability
of generation from such sources if done in
standalone manner. As such, the World Bank
INNOVATIVE FINANCING
is promoting investments in nascent renewable
energy technologies which have not yet been
demonstrated in the country.
Energy storage solutions are picking up pace
in the rest of the world and are proving to be the
bridge for economies to transition to a low carbon
path with minimal impact to the existing power
infrastructure. To maximize the use of existing
power facilities, another innovative solution
is installing loating solar plants, say on the
reservoirs of dams. Accordingly, the World Bank
is partnering with SECI to bring such technologies
to the forefront while absorbing the irst-mover
risks in terms of technology and sustainability.
he objective is to set up demonstration projects
while setting up the ecosystem in terms of the
regulatory and policy framework,thereby opening
upthe market for future investments. he World
Bank is also exploring ways to undertake takeout
inancing with central sector utilities to help the
Government of India in meeting its renewable
energy targets.
Overall, to support India’s eforts to transition
to a low carbon path, the World Bank is helping
the country bring renewable energy into the
mainstream by working in areas where the
public sector has a comparative advantage. he
aim is to attract more private sector investments
in the sector to help achieve the country’s
aspirational targets in renewable energy.
Adhering to its twin goal of reducing
poverty and boosting shared prosperity, the
World Bank is extending its wings by not
only combining its funding with concessional
inancing from other sources, especially the
CTF, but also by investing in the promotion
of innovativetechnologieswhich are new but
proven.
The views and opinions expressed in this article
are the author’s own and do not necessarily
represent the views of the magazine.
June 2017 | Energy Next | 25
 SOLAR | GAUGING GROWTh
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‘Need for overhauling of
financial, regulatory architecture’
Facilitative changes have occurred in policies and many more have to come.
Innovation, and its speed, will be critical. A small advisory group could be formed so
that we move forward both robustly as well as systematically, says Deepak Gupta,
Ex-Secretary, MNRE & Director-General, National Solar Energy Federation of India
T
he solar energy sector is on the
threshold of a revolution which will
culminate into a paradigm shit in
the power structure of the country.
his change requires a complete overhaul in
the inancial and regulatory architecture of
this sector and it is time to start building that,
said Deepak Gupta, National Solar Energy
Federation of India (NSEFI), speaking at a
recent event in Delhi – Renewable Energy:
Innovative Financing ‘Strategic Discussions.
Terming the issue as a critical one today
and as we go forward, Gupta said that people
associated with this sector are asking three
questions – how will all the money for 100
-200 GW come; how will the cost of funds be
reduced and how does the current low tarif
become sustainable – and these questions need
to be both asked and satisfactorily answered.
Explaining the developments in the sector,
Gupta also elucidated on perhaps the most
important factor for further development
– increasing inancial low to the industry.
Given the cumulative exposure of Indian
banking system to the power sector being
Single location large projects ofer
great opportunities for large capital
deployment
26 | Energy Next | June 2017
already very high, it is critical to develop
domestic banking and capital markets in
India and increase both international debt
and equity lows while mitigating currency
risks. Fortunately, new inancial instruments
are being developed and maturing.
“here are four types of innovative inancing
tools - Green Bonds, Credit Enhancement,
Masala Bonds and Invits. Exim Bank and Yes
Bank have lowered cost of funds through green
bonds. Guarantee support of strong national
or international institutions allows global
money from long-term pensions, sovereign and
insurance funds,” he said, pointing to growing
interest of such funds in the Indian solar sector.
Detailing on these instruments,
Gupta explained Masala bonds are rupee
denominated bonds where currency risk is
transferred to investors. Ater IFC, various
irms like HDFC, NTPC and NHAI have
raised huge funds in this way. Invits are
infrastructure investment trusts which invest
in infrastructure bonds. Six such Invits have
been conceptualised and two have already
raised money of around 7000 crores.
In the regulatory and policy area, it is critical
to eliminate risk. For this the PPAs require to
be standardised, and enforced, not postponed,
amended or cancelled. heir bankability
must improve through provision of deemed
generation, termination compensation, security
mechanisms, assignment in favour of lenders,
etc. And if required, the central government
must come out with support mechanism
for state discoms. his is the agenda which
Federation will take forward with the Centre
and the States, informed Gupta.
Single location large projects ofer great
opportunities for large capital deployment.
Economies of scale, besides creating
possibilities of innovative inancing, are
important said Gupta adding, “As I see the last
tenders, the size has not mattered whether it
is 50 MW or 300 MW, the policy people have
to consider this matter very seriously.’ Lower
size projects will allow more companies to
bag projects and diversify sources of funding.
We must also not forget the desirability of
having 1-2 MW size at the tail end distribution
centres. Somehow this component of the
National Solar Mission is not discussed at all.
Sharing some advice based on his
experiences, Gupta said, “Let us, however, not
forget that the solar rootop sector is equally
important where 40 per cent is the target. Solar
rootops have both similar as well as diferent
inancial and regulatory issues. Many facilitative
changes have occurred in policies but many
more have to come. Innovation, and its speed,
will be critical. A small advisory group could be
formed so that we move forward both robustly
as well as systematically.” We simply must
ind ways to incentivise discoms to allow the
industrial and commercial sectors to go in a big
way for solar roof tops. Operational procedures
for net metering must be standardised across
the board. Generation at consumption point
and avoidance of transmission problems is very
important. We also have to develop inancial
instruments speciically for this area. It is also
time to reconsider the need for subsidy and
certainly diferentiated subsidy for diferent
states. he market is now mature enough to
proceed on its own.
The views and opinions expressed in this article
are the author’s own and do not necessarily
represent the views of the magazine.

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India set to be a great destination
for investment
Talking of the sector’s pace – developers are acquiring land, doing the inancial
closure, constructing evacuation lines, and also commissioning projects within
12 to 13 months. Deinitely, risks are involved but developers are ready to take
the risk, probably because today, we have a suiciently developed ecosystem, says
Ashvini Kumar, Managing Director, SECI
T
he National Solar Mission was
launched on the January 11, 2010
by the Hon’ble Prime Minister. It
was the ministry which brought
out the irst grid-connected demonstration
project. During those times, inancing was a
great challenge. Timeline of the projects were
very stringent, i.e. 12 months, 13 months,
14 months. here were provisions of delays,
penalty, liquidity damages. he ministry took
a very proactive role at that time by talking to
bankers and organising training programmes
for them. World bank and other inancial
institutions also pitched in by getting experts
and conducting workshops. At that time, we
never thought that solar photovoltaics could be
a source of megawatts or gigawatt generation.
Today, the world has changed and it is a happy
situation.
ll BankS are lendInG money
aT eaSIer raTeS:
In my opinion, subsidy constrains the market.
As an implementer, I have seen that if I have
the VGF, I need to have so many compliances.
It is better if subsidy goes of. hankfully, that
has happened in ground mounted project and
nobody is asking for VGF now.
Nowadays, as the solar tarifs are falling with
every bid, banks are lending money at easier
rates. Being on the other side of the table, SECI
is trying to create the market and the policy
framework. he banks have comfort that funds
are available for lending to projects. he issue
of inancing is being addressed through masala
bonds, green bonds and other features.
ll rISkS Involved In
InveSTInG In renewaBleS
In my opinion, the problem of inancing is
the of-taker risk. I have personally witnessed
National Solar Mission facing this issue since
Day 1. By designating NTPC Vidyut Vyapar
Nigam as scheme implementer for Phase I
tenders and by creating SECI, this risk has been
mitigated to a large extent.
Adani solar park, which was set up at
Kamuthi Tamil Nadu last year is currently
the world’s largest solar park of 648 MW. he
total time in construction was also a record
(Adani solar park was built up in just eight
months). his is the kind of speed in which
India is moving. Developers are acquiring
land, doing the inancial closing, constructing
the evacuation lines, and also commissioning
projects within 12-13 months. Deinitely, risks
COVER
are involved but developers are ready to take
the risk, probably because today, we have a
suiciently developed ecosystem.
ll FlexIBle rePaymenT
oPTIon Should Be
InTroduCed
Bidders from more than 10 countries have
participated in the latest tenders; this is a clear
relection that other countries are looking
towards India as a great destination for
investment.
RE sector has come a long way. Besides solar,
we have done bidding for wind power and
achieved lower tarifs. I would say that RE sector
is evolving and getting more mature. I think the
repayment tenure should be increased.
Hydro produces more revenue in rainy
season. Similarly, wind power gives more
revenue in monsoon. Hence, lexible repayment
option should be introduced.
As a part of all SECI bids, government gives
you some fund from the consolidated funds of
India to create payment security mechanism.
We are also working with the World Bank for
unfunded payment security mechanism.
Excerpts from Mr Ashvini Kumar’s speech at the
Innovative Financing Strategic Discussion event at
India Habitat Centre
June 2017 | Energy Next | 27
 COLUMN
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Bhadla Phase-IV and
innovative inancing
A bankable project should be one that a bank is
willing to inance
H
istory was created with the
record low tarifs achieved in
the auction for Bhadla Phase-IV
Solar Park, Rajasthan on May
9 with tarif of Rs. 2.44 per unit. his tarif
is ixed for 25 years with no escalation and
the bidders have sought no VGF from the
Government. he winners are M/s ACME
Solar Holdings Pvt. Ltd. (200 MW) at a tarif of
Rs. 2.44 per unit and M/s SBG Cleantech One
Ltd. (300 MW), quoting a tarif of Rs. 2.45 per
unit. he developers will be paying solar park
charges of Rs. 45.2 lakh per megawatt towards
land, connectivity (from pooling substation
to state network) and other infrastructural
facilities. he projects are likely to be
completed in about 12-13 months.
Almost all, working in the Solar domain,
feels how it is possible.
his fall in solar tarifs is understood
to be the result of combination of various
factors, most important being the decision
of the Government of India to cover solar
power by SECI under the ambit of Tripartite
Agreement for payment security against
defaults by State distribution companies.
Other factors contributing are about 7-8%
higher yield in Rajasthan due to better solar
radiation conditions, drop in module prices
in International market, and strengthening of
Indian rupee against US dollar. Shri Piyush
Goyal, Minister for Power, Coal, Mines and
New & Renewable Energy speaking at the
launch of “Scaling Solar MiniGrids” by France
and India on the sidelines of 52nd Annual
Meeting of the African Development Bank
(AfDB) in Ahmedabad mentioned that Indian
renewable energy sector ofers lessons such as
lower and innovative inancing models, risk
reduction, setting up large scale solar projects
through energy parks.
28 | Energy Next | June 2017
he question is – Is the Bhadla Phase-IV
Solar Park, low tarif of Rs. 2.44 per unit is
aresult of innovative inancing?
Traditionally, project inancing is based
on the prediction of future cash lows. In the
power/ RE sector, cash lows are determined by
the amount of energy an independent power
producer (IPP) generates and then sells to a
state-owned utility or third party. To project
the cash lows, developers and deal sponsors
create a power purchase agreement (PPA)
to facilitate the sale of the energy into grid
or another power source. hese agreements
outline the terms and conditions of the
sale of energy, including the price, capacity,
performance, and contingencies for losses,
damages, and emergencies. Project inance is
structured to include early-stage equity from
a developer backed by a private equity irm or
corporate investor, that is then supplemented
by mid-term debt and long-term debt
provided by commercial banks.
Each investor, bank, government, or
developer has a diferent idea of what a
project’s risk/return proile should be. A
bankable project should be one that a bank
is willing to inance. But bank inancing is
only one component of the capital investment
structure, and most private investors seek
much higher returns on their investment. what
looks like a strong project, with stable revenue,
a suite of credit guarantees, and political risk
insurance, may still only generate single-digit
or mid-teen returns. Most of the investors
normally look for at least 25 percent internal
rate of return (IRR) if the investment is part of
their private equity allocation. Unfortunately,
on average, energy infrastructure projects have
yielded 16 percent to 18 percent IRR, based on
20-year cash low projections.
To bridge the funding gap and to appeal to a
wider variety of investors, it is agreed that new
solutions must: (a) address credit/sovereign
risk (b) improve deal implementation and time
to completion and (c) mitigate inancial risk
through increased variety of product oferings.
Financing energy infrastructure is not a one-
size-its-all exercise; what works for one project
may not work for another. Consequently, it
is imperative to develop a diverse menu of
options to access capital. With new investment,
infrastructure can be leveraged to spur new
economic and social development well
into the future. Innovative inancing refers
to a range of non-traditional mechanisms
to raise additional funds for development
aid through “innovative” projects such as
micro-contributions, taxes, public-private
partnerships and market-based inancial
transactions. Innovative inancing instruments
do not replace, but rather complement,
traditional resource lows such as aid, foreign
direct investment and remittances. Innovative
inancing is unique because it can attract
private companies that want to expand into
new markets; investors and fund managers
who want to create both inancial and social
returns; and governments that want to achieve
more and better development impact in a
resource-constrained environment.
Most of these mechanisms combine public
and private sector resources and expertise;
successful innovative inancing creates
incen¬tives for private companies to invest in
projects that beneit people at the base of the
pyramid or support the environment. Bhadla
Phase-IV is not a one day story. It is built step
by step, with learnings of past and showing a
way forward.
The views and opinions expressed in this article
are the author’s own and do not necessarily
represent the views of the magazine.

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Time right to raise aggressive
innovation in financing
A positive development we see today is that corporate is looking at renewables as
a promising segment that may be instrumental in expanding their businesses
R
enewables, world over, is making
news and with the drastic decline
in the solar tarif, solar has
taken the center stage. Eminent
industry players came together at the
‘Renewable Energy Innovative Financing –
Strategic Discussions’ – a seminar organized
by the National Solar Energy Federation of
India (NSEFI), recently at the India Habitat
Centre in New Delhi. The seminar offered
a platform for the developers to share
the issues they face while financing of
their projects. Banking institutions like
Yes Bank, Exim, Tata Capital and IREDA
talked about their loan schemes and
other financial instruments available with
them. Industry players like Adani and
Amplus shared their success stories and
experiences, making the event a solution
for all in the sector.
Welcoming all at the event, NexGen
Financial Solutions Managing Director
Sanjeev Gupta said that the seminar is an
opportunity to raise aggressive financing
and that too innovative financing.
The tariff of 2.44 today is a 40 per cent
downscaling of the tariff in just one year.
Earlier, industry people were worried
about the grid parity but today that is no
more a problem. “I think that solar energy
has clearly reversed its role today, having
the tariff of 2.44 specifically and clearly
proving a point that it is almost more than
20 per cent lower than the average rate of
power generation for the coal fuel plants of
NTPC which still exists at 3.20,” he said.
Gupta, while introducing the agenda of
the seminar said that the most important
part of financing remains debt. He said,
“The most important aspect of financing
remains (in my opinion) the debt which
is not only 70 to 80 per cent of the total
financing element but more than 80 per
cent of the opex also.”
COVER | EvENT
The discussions revolved mostly
around the key elements of debt – cost
effectiveness; acoustics and timely
arability. In the initial discussions, the
speakers shared their achievements on
how the companies built themselves and
raised innovative financing.
ll SuCCeSS manTra
The solar sector is a 12,288 MW industry
today which actually is almost double
of the size and is expected to cross 20
GW in the coming year. This success is
a combined effort of all players of the
industry and even future developments
depend on the team work.
Speaking on these lines, NSEFI Chairman
Pranav Mehta said, “We started with the
motto ‘making solar energy afordable’. I am
happy that we are already standing at Rs.
2.44. I was the irst one to congratulate the
minister, secretary on the WhatsApp.”
June 2017 | Energy Next | 29
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Mehta said that along with Government,
even the industry deserves a kudos because this
is the PPP mode. “Industry has contributed
tremendously by taking risk and playing the
game to lower this tarif. In nuclear sector,
government is spending money here, the private
players are spending money. Solar private sector
has played an important role, not only in the
growth but also lowering the cost,” he added.
Technology is the same i.e. 18-20 per cent
cell eiciency but it is the inancial increment
which has contributed signiicantly in
lowering the cost, he said.
Another key industry igure, Adani Chief
Executive Oicer (Renewable Energy) Jayant
Parimal shared his achievements at the solar
plant in Kamuthi, Tamil Nadu.
he solar plant in Kamuthi, Tamil Nadu
which apparently is the world’s largest solar park
of 648 MW capacity– was completed in less than
twelve months’ time. Right from acquiring the
land for the project from the private parties to
setting up and connecting it. As per its current
portfolio, 898 MW are operational and 1322
MW are under implementation, said Parimal,
adding that present in all states, Adani is actively
participating with the government.
“Our success is driven by four key strengths
- rapid execution and cost efective O&M,
inancing for large scale infrastructure projects,
scale led procurement and power evacuation
capabilities,” he added.
Hailing the achievements of the sector as a
whole, Gupta said that the industry expects a
paradigm shit of the power structure in the
country. For this he suggested that there is a
need for complete overhaul of the inancial and
regulatory architecture in this sector.
“Single location, large projects ofer great
opportunities for large capital deployment.
Economies of scale, besides creating possibilities
of innovative inancing, is again very critical.
As I see the last tenders, the size has not
mattered. Whether it is 50 MW or 300 MW, the
policy people have to consider this sector very
seriously,” said Gupta.
Expressing confidence in the potential
of the sector’s growth, Parimal said, “We
have a portfolio of around 2 GW, and
therefore assuming that India will reach
20 GW in this year, we are contributing
approximately 10 per cent.”
A positive development that we see today is
that the corporates are looking at renewables as
30 | Energy Next | June 2017
a promising segment that may be instrumental
in expansion of their own businesses. “We have
more than 60 customers like Walmart, Metro,
Dominos, Intel, Honda, ABB, Fortis, Dominos
and others. hey want to adopt renewable energy
and buy it for long term. his gives us more
conidence that this is a growing sector and we
must leave no stone unturned to promote it,” said
Sanjeev Aggarwal, Founder, Amplus.
ll FInanCInG The Green
All the players in the sector have
unanimously attributed the new levels of
achievement in the sector to the inlux of
inancing, especially from the private players.
The lenders and the investors present
at the seminar discussed the financial
aspects and shared their success solutions.
They opined that a lot of innovation is
going on in the financial segment.
Giving a brief explanation to the four
innovative financing instruments – Green
Bonds, Credit Enhancements, Masala
Bonds and Invits, Gupta said, “Given the
cumulative exposure of Indian banking
system to the power sector is already very
high. It is critical to develop domestic
banking and capital markets in India and
increase both international debt and equity
flows while mitigating currency risks.”
Elucidating on the recent issuance of
green bonds of Exim Bank and Yes Bank,
which have lowered cost of funds, he said
that guarantee support of lower national
or international institutions allows
global money from long-term pensions,
sovereign and insurance funds.
Similarly, in the case of masala bonds
where currency risk is transferred to
investors, after IFC, various firms like
HDFC, NTPC and NHAI have raised huge
funds in this way, he added.
Mehta talked about a recent step by
the government has further boosted the
investors’ as well as all potential investors.
He said, “The government is coming up
with the quality order. The government has
circulated the draft and we at NSEFI have
given our suggestions. The government
or any purchaser has the right to demand
quality. No legal course of action should
be taken, we would persuade them to take
legal action only in some exceptional case
like Tamil Nadu backing down, PPA not
honored, that too when negotiations fail
otherwise we always believe in talking over
a matter. We have brought credibility by
bringing international recognition.”
Speaking at the event K S Popli, CMD
IREDA said, “Till 2012, bankers were not
very confident of the technology as solar
was a new field and projects were very
small. However, in 2014, new government
came to power and enhanced the target
and financing came to fore-front. There is a
difference between large infrastructure and
solar projects, because they get completed
in one year and revenue starts flowing in.”
Explaining that in solar the fuel is assured,
only the money part is let which makes the
things viable, he added that it is much easier
to take risks on solar projects. Funding cost
was 6 to 8 crore earlier, has come down
to 3-4 crore. Solar parks are a great help.
Development of green bond market markets
has taken in a big way. Lot of companies are

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switching to the bond market for getting
the funds. he solar tarif which is already
standing at 2.44 is expected to be lower in the
coming years.
Given to the falling solar tarifs with every
bid, banks are lending money at easier rates,
said Ashvini Kumar, Managing Director,
SECI. Sharing the role of SECI, he said,
“Being on the other side of table, SECI is
trying to create the market and the policy
framework. he banks have the comfort that
the funds are available and they will lend it at
the terms they want to have for the project.
he issue of inancing is being addressed
through masala bonds, green bonds and
other features.”
In 2015, Exim Bank had launched Reg S
green bond of $500 million; this transaction
marks the irst USD-denominated green
bond ofering out of India as well as the irst
benchmark-sized green bond out of Asia in
2015-2016 and the third ever green bond
issuance out of Asia. It was successful and
attracted subscription of around 3.2 times the
issue size led by demand across 140 accounts,
informed Manish Joshi, Deputy General
Manager, Exim Bank.
He added that Exim has used the net
proceeds from the sale of the notes to
fund eligible green projects in countries
including India, Bangladesh and Sri Lanka.
Apart from solar, it was also used for
environmentally sustainable projects such
as waste management, land use, forestry,
bio-diversity conservation and clean
transportation, said Joshi.
Yes Bank was the irst bank to launch
India’s irst green infrastructure bond for
inancing 5000 MW of RE projects. It is
committed to mobilize USD 5 billion for
climate action on the side-lines of COP 21 at
Paris. It raised INR 2135 crores through long
term infrastructure bonds and is a knowledge
partner to International Solar Alliance
launched jointly by India and France during
COP 21 engagements.
While all were explaining how inancing is
becoming easier, Emandi Sankara Rao, Chief
General Manager, IIFCL explained what are
the important requisites for being able to get
the inancial support approved.
Talking on this, he explained, “Long
terms funds are not always available with
commercial banks, hence, you require
diferent inancing and funding solutions. It
is very well possible to approach domestic
as well as international banks and FI’s
for investment but your project should
be attractive enough with proper project
appraisal. Whether you are a developer,
banker, or equity player, the cost of the
inance is critical in this competitive market
EVENT
and will go hay-way if it is not properly
structured.”
Calling the journey remarkable, Director
(Corporate Finance and Infrastructure
Banking) Vikas Bansal said that credit
guarantee schemes, green bonds, equity
participation, Yield Cos, NTPC SECI of-take
arrangement, REWA 750 MW solar power
tender are some of key drivers of renewable
energy in India.
Senior Energy Specialist and World
Bank’s Task TeamSurbhiGoyal, Head-Credit-
Cleantech of Tata Capital Ashwini Kumar,
Deputy General manager of Exim Bank
Manish Joshi also share their presentations
and talked about new methods of inancing.
While banks and financial institutions
like Yes Bank, Exim, Tata Capital and
IREDA talked about the loan schemes
and instruments available with them,
renowned organizations such as Adani
and Amplus shared their success stories
and experiences. The panelists talked
about the need to create awareness among
the developers on how to have a strategic
approach for financing related issues.
They spoke on the availability of funds
from national and international banks
or financial institutions. The seminar
concluded with a questionnaire session and
thanking note by the presenters.
June 2017 | Energy Next | 31
 PDF Compressor Free Version

EXHIBITION
20-22
2017

September
Renewable Energy India
India Expo Centre
Greater Noida New Delhi
Booth No. 5.107

/RaysPowerinfraPLtd /Rayspowerinfra www.rayspowerinfra.com

 PDF Compressor Free Version

“ Innovative Business models

with attractive returns
on your Investment ”
 EVENT

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(L to r) Jayant Parimal, Pranav Mehta, Ashvini Kumar, Deepak Gupta, KS Popli & Sanjeev Aggarwal

Sanjeev Gupta, Financial Advisor & Head - Banking and Finance, NSEFI and MD, Nexgen; Jayant Parimal, CEO
(Renewable Energy), Adani Enterprises; Pranav Mehta, Chairman, NSEFI; Ashvini Kumar, Managing Director, SECI;
Deepak Gupta, Director General, NSEFI; KS Popli, Chairman, IREDA Energy law expert Raj Singh Niranjan with Ashvani Kumar

Jayant Parimal, CEO Renewable Energy, Adani Enterprises

Ltd, and Deepak Gupta, Director General, NSEFI Ashvini Kumar, Managing Director, SECI

IREDA Chairman KS Popli

Manish Joshi, Deputy General Manager, EXIM Ashvini Kumar and Deepak Gupta Sanjeev Aggarwal, Founder & CEO, Amplus Solar

34 | Energy Next | June 2017

 PhOTOGRAPhS

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Pranav Mehta, Chairman, NSEFI addresses guests at the conference

Surbhi Goyal, Senior Energy Specialist & Anupam

Daftuar, Director, Energy Next Surbhi Goyal, Senior Energy Specialist, World Bank sitting amongst the guests

Speakers and distinguished guests pose for photograph at ‘’Innovative Financing – Strategic discussions seminar
held at India Habitat Centre. Guests engaged in a coversation during the tea break

Ashwini Kumar, Head (Credit), Tata Cleantech Capital

Jayant Parimal, CEO (Renewable Energy), Adani

Enterprises Limited Crowd dispersing ater the event

June 2017 | Energy Next | 35

 COVER
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re innovative financing
instruments at a glance
With a green bank format, clean technology can raise low cost deposits, overseas
pension funds, co-inancing from wealth funds & capital markets, reports EN
R
enewable power is set to play a
critical role in country’s energy
security as the world’s largest
renewable capacity expansion
programme is being taken up by India. Also,
government’s target of reducing India’s carbon
footprint has prompted a policy and regulatory
support for green energy projects.
he government has raised the solar power
generation capacity addition target by ive times
to 1,00,000 MW by 2022, which will entail an
investment of around Rs 6 lakh crore.
he government is playing an active role
in promoting the adoption of renewable
energy resources by ofering various
incentives. hese included generation-
based incentives (GBIs), capital and
interest subsidies, viability gap funding,
concessional inance, iscal incentives etc.
he National Solar Mission (NSM) aims
to promote the development and use of solar
energy for power generation and other uses,
36 | Energy Next | June 2017
with the ultimate objective of making solar
energy compete with fossil-based energy
options.
In order to achieve the renewable energy
target of 175 GW by the year 2022, various
policy measures have been initiated and special
steps taken in addition to providing inancial
support to various schemes being implemented
by the Ministry of New and Renewable Energy
(MNRE).
hese include, inter alia, suitable
amendments to the Electricity Act and Tarif
Policy for strong enforcement of Renewable
Purchase Obligation (RPO) and for providing
Renewable Generation Obligation (RGO) and
setting up of exclusive solar parks, development
of power transmission network through Green
Energy Corridor project, identiication of large
government complexes/ buildings for rootop
projects.
Raising tax-free solar bonds, providing
long-term loans, making rootop solar as a part
of housing loan by banks/NHB, incorporating
measures in Integrated Power Development
Scheme (IPDS) for encouraging distribution
companies and making Net-metering
compulsory and raising funds from bilateral
and international donors as also the Green
Climate Fund to achieve the target are some
other steps taken by the government.
According to Manish Aggarwal, Partner
and Head, Energy & Natural Resources,
KPMG in India, “Over the last two years India
has demonstrated a signiicant increase in its
renewable capacity addition backed by strong
policy push and government’s commitment
to provide sustainable, clean and afordable
power to consumers. Auctions have led to
very competitive tarifs which necessitates an
innovative inancing and structures that can
support such tarifs.”
“his is still evolving. As the risk framework
becomes more balanced like REWA bids, utility
risk comes down we will see more innovative

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inancing coming to the market. We are already
seeing emergence of green bonds, masala
bonds, and soon we will have InvITs for this
asset class as well,” he added.
Kameswara Rao, Leader (Energy Utilities
& Mining) PwC India said, “Clean technology
is capital hungry, more so with wide range
of deployment in India, from renewables to
lighting. With a green bank format it can raise
low cost deposits, overseas pension funds,
co-inancing from wealth funds and capital
markets.”
ll InnovaTIve FInanCInG
meChanISmS
Tarun Kapoor the former Joint Secretary with
MNRE is of view that the cost of inancing is
very important for renewable energy sector.
“Renewable Energy projects are capital
intensive. If we bring down the cost of inancing
the tarif drops drastically. It is important that
the project cost is brought down which can be
done by either raising money internationally
or nationally through instruments like Masala
Bonds or long-term loans,” he said.
Internationally, he explained, the money is
available with 40-year tenure and because of
which the burden in the initial year reduces.
In India too now funds are available with
20-years tenure therefore companies must
borrow long term.
According to International Solar Alliance
(ISA) interim Director General Upendra
Tripathy innovative inancing is a new area
in the renewable energy because renewable
energy requires a lot of investment and a lot of
risk is also involved which depends on country
to country. “Now to minimize these risks you
need some sort of new mechanisms. It can be
credit enhancement mechanism. For example
you are going to the market for a bond. If I say
look your loan is secured by 25 per cent from
me for a premium your bond coupon rate will
be less. Your interest rate will come down,”
Tripathy said.
“hese are the facilitation mechanisms and
ISA have tied in a small way with IREDA earlier
and idea of 30 billion dollar of assurances
every month and put in insurance in place is
a big idea and is possible because when the
World Bank recently came to India he himself
proposed this and now France is taking active
steps in this,” he said.
Tripathy said that ISA is trying at global
level other level is domestic level. India can
do a lot on its own SBI can do it. Punjab
National Bank can do it. Similarly in other
countries their banks can bring in a number of
instruments so.
“One thing is that ISA is trying at global level
and other thing than can activate is domestic
level. For example in India during REINVEST
2015 we got 77,000 million dollars commitment
from domestic banks. Not from multilateral
banks,” Tripathy said.
One thing is inancial instruments, second
thing is equity and the third thing is loan, he
said adding that there is a need to look at the
inancial market as a whole.
“here are three components loans, equity
and insurance,” Tripathy added.
Somesh Kumar, Partner and Leader, Power
& Utilities, Ernest and Young, India, said, “To
keep pace with the changing scenarios, various
new and innovative inancing mechanisms are
being proposed. Some of these instruments
are Loans4SMEs, P50 Risk solutions, rootop
solar private sector inancing facility, integrated
hedging, equity and debt fund, green banking,
partial credit guarantee and partial risk
guarantee.”
ll InSTrumenTS For
InnovaTIve FInanCInG
• Loans4SMEs: Renewable energy SMEs
oten fail to meet banks’ lending requirements
(collateral requirements and three years
proitability) thereby resulting in a shortage of
capital for these groups.
“Peer to peer lending provides a solution
in this case. Loans4SME will provide a
INNOVATIVE FINANCING
marketplace that will connect business owners
with debt providers (high net individuals,
family investment oices and corporate
treasuries) through peer to peer lending,”
Kumar said.
he instrument will be supported by a robust
credit risk assessment model, which will be
in conjunction with the project’s cash low
projections. It would be the irst peer to peer
lending facility in India, Kumar added.
• P50 Risk solutions :An insurance product
to reduce the inancial risk associated with
weather variability in wind projects. his risk
limits the availability and the cost of capital
for projects. he product would increase the
amount and reduce the cost of long-term
debt to the wind energy sector by ofering a
minimum revenue guarantee to wind farms
and may be useful in attracting new sources of
capital.
ll The rooFToP Solar
PrIvaTe SeCTor FInanCInG
FaCIlITy
An aggregator model bundles a large number
of small projects together into one structured
investment. his makes the aggregated deal
size large enough and of suicient credit
rating to attract more attention from investors,
particularly institutional investors. Institutional
investors can provide capital at lower cost
by combining commercial and concessional
capital to further reduce the cost of power from
rootop solar. he instrument will provide long-
term (12-14 years compared to maximum nine
years of currently available loans) debt capital to
developers that aren’t able to access debt capital
June 2017 | Energy Next | 37
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due to various constraints.
ll InTeGraTed hedGInG,
equITy and deBT Fund
A fund to facilitate large-scale international
institutional investments in renewable energy
projects by managing currency risk and
aligning the cost of capital with risk proile
during and post construction.
Green BankInG
Green Banks are publicly-funded institutions
that partner with private investors. hey take
on diferent roles based on context and the
speciic inancial gaps that need to be illed.
A Green Bank in India would be able to ofer
low-rate, long-term inancing that is suitable for
clean energy project by directly investing or co-
investing in projects. hey could also incubate
smaller projects such as rootop solar and sell at
scale to make them more attractive to investors.
Indian Renewable Energy Development
Agency (IREDA)
IREDA will raise around USD 150 million in
the current iscal through green rupee Masala
Bonds for giving loans to the renewable energy
projects, including solar.
38 | Energy Next | June 2017
According to Chairman IREDA Mr K S
Popli, “Banks have reduced the lending rates
for projects, which we need to match. Today,
we can raise Green Masala Bonds at lower
costs compared to domestic borrowings.
herefore, it is advantageous to tap
international market and also this will help
up in raising money in future.”
He further said that today to tie up
the inance for wind and solar projects
is no more a challenge as banks and
foreign institutional investors (FIIs) now
understands this sector better and are
willing to take exposure in renewable energy
sector at attractive terms. Companies have
also been able to raise funds in international
market in rupee as well as dollar that shows
the conidence that investor have shown in
India and renewable energy sector. “Indian
companies are also able to source equity
from ofshore investors at attractive terms,”
Popli explained.
State-run power giant National hermal
Power Corporation (NTPC) recently listed
its Masala Bonds at London Stock Exchange
(LSE). Under the USD 4 billion medium term
note (MTN) programme, NTPC had raised
Rs 2,000 crore earlier this month and Rs
2,000 crore in August, 2016. he LSE listing
will provide global investors access to Indian
companies while providing liquidity to them, a
power ministry oicial said.
he ISM is a new Multilateral Trading
Facility (MTF) aimed at qualiied investors for
a whole host of debt capital markets products
issued by International issuers.
ll ParTIal CredIT GuaranTee
Partial credit guarantees reduce the cost of debt
by enhancing the credit rating of a project. he
guarantor agency (usually a multilateral agency
or a private inancial institution) leverages its
higher credit rating to reduce the risk associated
with the project by guaranteeing a speciic
proportion of the borrowing.
ll ParTIal rISk GuaranTee
Partial risk guarantees attract foreign funds
by mitigating political risks such as breach
of contract by the state, expropriation and
currency inconvertibility, thereby reducing
the cost of inancing. A partial risk guarantee
typically covers the entire debt amount as
well as interest payments
ll mezzanIne CaPITal
Mezzanine inance is a hybrid instrument that
bridges the gap between debt and equity. It
provides capital in the form of subordinated
debt or preferred equity, thereby making
more inances available where debt markets
are thin or unable to meet industry needs.
Indian renewable energy irms such as
Mytrah Energy and Azure Power have raised
inancing through mezzanine capital from
domestic and international investors. R.
Somasundaram, Head - Strategic Initiatives,
Mytrah Energy said that “company has used
innovative inancing instruments like bank
loans, Mezzanine Capital to raise money for
its projects.”
ll aSSeT BaCked SeCurITIeS
Renewable energy projects have a life of 20-25
years. Hence, the tenor of funds raised on back
of these assets should be longer. Asset-backed
securities are long-term bonds backed by the
cash lows associated with project assets. hese
instruments have been successful in economies
with large, liquid corporate bond markets which
can attract large number of investors.

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‘Integrated energy vision must
for companies to be successful’
Energy market is going through a complete transition and its imperative
for all the players to igure out how this market is going to develop,
Sanjeev Aggarwal, founder and CEO, Amplus Solar explains
q
Please tell us a bit about
your company, amplus
Amplus Solar is India’s leading
distributed energy company that ofers low
cost solar energy by installing solar panels
for its customers on a opex basis. We work
with leading corporates across the country
and have more than 115 MW of operational
and under construction plants spread across
200 locations.
what challenges did you face as a
solar rooftop provider?
I think that the developers and investors
focus more on the utility space than rootop
solar. In countries like US, Germany, and
China, you will ind that most of the solar
energy is in distributed form and is coming
from the solar rootop which is not the case
in India. he government’s focus is still
more on large scale plants though there are
intentions to push the rootop sector as well.
why do you think rooftop solar
makes more sense than the
utility scale projects for a
country like India?
I have worked for 20 years in power sector
and having developed large scale fossil fuel
plants. I think land acquisition is the biggest
issue faced by us as a country. With ever
increasing population, we may ind it more
and more challenging to block vast tracts of
land with solar panels.
he second challenge is transmission line
that can evacuate intermittent power from
renewable sources on a real time basis. And
the third challenge is the credit worthiness
of certain state utilities, which is a topic that
is being discussed for several decades now.
Distributed solar probably makes more
sense as we are able to generate power without
using any additional land and additional
transmission. he generated power reaches the
customer directly.
Please share your experiences
while interacting with financing
companies for your projects
Ater facing rejections from various banks
and inancial institutions considering the
early stages of rootop sector and limited
understanding in the banking sector, Amplus
was able to get project inancing from
Reliance Capital. We were able to implement
our irst 1 MW of rootop and developed
further pipeline.
Next challenge was continued supply of
equity. We discussed with many investors and
inally decided to work along with I squared
capital which is now our main investor and
have committed investment of $150 million for
Amplus’s growth.
Tell us about your customer base.
We have more than 60 customers like
Walmart, Metro, Dominos, Intel, Honda,
ABB, Fortis, Dominos, etc. he beneit or
the comfort we get is today that corporate
sector is looking at this segment as a need for
furthering their own businesses.
hey want to adopt renewable energy
and buy it for long term. his gives us more
COVER | FINANCING
conidence that this is a growing sector and we
must leave no stone unturned to promote it.
hen, comes the responsibility of the
government and I must congratulate SECI
which is doing a lot of work for streamlining
the process. We also work with MNRE and
SECI and put in our part by participating in
various government tenders.
what changes would you like
the government to make in the
policies?
he market is changing extremely fast and it is
important for SECI and MNRE to expedite the
process at various levels.
One of challenges we face is the net
metering. Apart from the procedural delays,
I fail to understand why there is an artiicial
cap of 1 MW on net metering in most of the
states. However, there is no such capping in
Uttar Pradesh and we have been able to set
up a 4MW plant at Yamaha rootop, which is
net-metered.
We operate in 20 states but unfortunately
could not install any plant in Gujarat for
a private party. Although, Gujarat is very
developed and advanced state in terms
of policy norms, there is no net-metering
allowed for third party PPAs in Gujarat
which is very unfortunate.
Can you shed some light on
the current scenario of Indian
renewable energy market?
Energy market is going through a complete
transition and its imperative for all the
players to igure out how this market is going
to develop. here is a clear integration which
is happening on the renewable, storage, and
electric vehicles. People have to look at all
these things in entirety and not in isolation.
Only the companies with an integrated
energy vision will be successful in future.
June 2017 | Energy Next | 39
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Larger projects would enable

developers to bargain better
he role of intermediary is all the more important because renewable
companies are interested to see that there is a reliable body that can do risk
mitigation on their behalf, says Rajiv Mishra, Director, Marketing & Project
Development, Power Trading Corporation India Ltd.
about the initiative?
PTC India Limited, the leading provider of
power trading solutions in India has executed
Memorandum of Agreements (MoAs) with
seven state utilities for sale of wind energy for
a total quantum of 1049.9 MW. Agreements
were exchanged between PTC and discoms in
the presence of Minister of State (IC) for Power,
Coal, New & Renewable Energy and Mines
at Conference of Power, New & Renewable
Energy & Mines Ministers of States & UTs.
Distribution Utilities of Uttar Pradesh, Bihar,
Jharkhand, Assam, Odisha, Delhi and Noida
power to non-windy states and UTs. PTC is
the trading partner responsible for purchase
and sale of wind power under the scheme. he
government successfully completed the irst
ever auction of wind power and associated
infrastructure for 1,000 MW in last week of
February with a provision to increase it upto
1050 MW. Bidders were selected and Letter of
Awards were given to successful bidders. PTC
India Ltd successfully tied up entire power
with discoms.
Tell us more about the scheme

q
PTC India has announced
execution of agreements
with seven state utilities
for sale of wind energy for a
total 1049.9mw. Please highlight
these state utilities and who is
the largest beneficiary of the
scheme? Please tell us more
have signed MoA with PTC. Uttar Pradesh is
the largest beneiciary of the scheme and has
signed MoA for 440 MW.
Ministry of New and Renewable Energy
(MNRE) had formulated the scheme for
setting up of 1000 MW ISTS connected wind
power in India. In the scheme wind projects
are to be set up in windy states for supply of
and the investments made in this
industry. how do you plan to make
it beneficial for customers?
he Government of India has set a target
of achieving 175 GW power capacity from
renewable energy resources by 2022 and out of
this 60 GW to come from wind power. We are
proud to be associated as a trading partner for

40 | Energy Next | June 2017


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renewable resources based power generation,
which is the energy for the future. he scheme
is very beneicial for power industry as a whole
and wind industry in particular. It will attract
more investments in the industry and lower
tarif through competitive bidding will beneit
the consumers at the end. his model will be
very helpful for scaling up the wind generation
in the overall renewable energy basket in the
future. he scheme is for better utilization of
wind resources available abundantly in windy
states and supply green power to non-windy
states hence helping both kind of states and the
nation as a whole in achieving the target.
Can you shed some light on
various innovative financing
options available in renewable
energy sector in India? what
financing options are most
popular with developers?
As the scale of wind projects have gone up
in the recent inter-state competitive bidding,
the project developers would like to do re-
engineering and better project management,
better negotiations with OEMs. he larger
project size would also enable the developers
to bargain for better cost of capital, both
from domestic as well as from international
lenders. Interestingly, the developers are mix
of international as well as domestic players.
Although it was not expected that all the
selected bidders would quote the lowest
bid but say incidentally all the ive bidders
have quoted the same tarif of Rs 3.46/- per
kWh. his is the irst such bid and we expect
that there will be more activities and more
innovative inancing to come.
mnre had sanctioned a scheme
to set up 1,000-mw inter-state
transmission system connected
wind power project, how you
see this changing the energy
landscape of the country.
he Government of India has set a target
of achieving 175 GW power capacity from
renewable energy resources by 2022 and out
of this 60 GW to come from wind power.
Although the total potential of wind energy
is estimated to be over 302 GW, the country
is able to harness only a part of it. Most of
this potential exists in 8 windy States namely
Andhra Pradesh, Gujarat, Karnataka, Madhya
Pradesh, Maharashtra, Rajasthan, Tamil Nadu
and Telangana. Hence, a need was felt to
formulate a scheme to harness the available
wind resource at these wind rich states to
supply wind power for larger beneit of the non-
windy states. 1000 MW ISTS connected Wind
Power Projects will be set up in windy states
and Power will be sold to non-windy states/UTs
for fulillment of their RPO requirements.
So as of now where wind power was
generated and consumed locally is being able to
transmit to other states where there is no wind
potential. his will give thrust for harnessing
the full potential of wind power where it is
available otherwise the wind sector was on the
verge of getting saturated in want of buyers
in the same state. his will act as a balance
INNOVATIVE FINANCING
between the two kind of states as far as wind
energy is concerned. States like U.P., Bihar,
Jharkhand etc. not able to generate wind power
but they have placed order for more than 800
MW wind power under this Scheme of MNRE.
also, how do you access the
growth of wind sector as a
prominent renewable vertical
after solar?
India has a cumulative renewable energy
installed capacity of more than 57,000 MW
as on 31st March, 2017. Out of the total
installed RE capacity, more than 32,000 MW
is contributed by wind energy that accounts
for more than 56% of total renewable energy
generation capacity. India, through the last two
decades, has witnessed substantial growth in
wind energy capacity addition.
he legal clarity and certainty of regulatory
principles with formulation and enunciation of
Electricity Act, 2003 together with conducive
policy framework ensured continued interests
by a number of players in wind sector; which
has ultimately resulted into signiicant growth
in harnessing wind energy across various States.
Although the total potential of wind energy is
much more, the country is able to harness only
a part of it.
he wind power potential in the country
is assessed by the National Institute of Wind
Energy (NIWE) at 100 meter above ground
level, which is estimated to be over 302 GW.
Most of this potential exists in 8 windy states
namely Andhra Pradesh, Gujarat, Karnataka,
Madhya Pradesh, Maharashtra, Rajasthan,
June 2017 | Energy Next | 41
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Tamil Nadu and Telangana.
he Government of India has set a target
of achieving 175 GW power capacity from
renewable energy resources by 2022 and out of
this 60 GW to come from wind power.
Please tell us the role that PTC,
as a leading provider of power
trading solutions in India, is set
to play in the country’s ambitious
renewable energy mission?
PTC has gained valuable experience by
providing support services to Solar Energy
Corporation of India (SECI) in managing the
operational and commercial aspects of trading
of 750 MW power from Solar Power projects.
SECI and PTC signed MoU for sale and
purchase of power from 3000 MW solar projects
for onward sale on long term basis (25 years
from COD of the Projects) to the State Utilities.
PTC is nodal trading partner for MNRE
wind scheme for setting up of 1000 MW
wind projects in India and having mandate
for purchase and sale of wind energy from
developers to discoms.
Also, PTC’s subsidiary PTC India Financial
Services Limited (PFS) has a signiicant presence
in Renewable Sector with 40% portfolio
consisting of renewable energy projects.
PTC’s subsidiary PTC Energy Ltd. (PEL)
is focused on developing and owning wind
and solar Projects.PEL has commissioned
wind power projects with combined
capacity of 288.8 MW.
We have done it for conventional and we are
sure we will do it for renewable as well with inter-
state sale of power and ater some point of time it
42 | Energy Next | June 2017
could be a product in the exchange for sale.
how has PTC been able to set an
example of a successful Public-
Private Partnership?
PTC India Ltd. (PTC), was established in
1999 by Govt. of India as a Public-Private
Initiativewith primary focus on
• promoting power trading to optimally utilize
existing resources
• attract investments in the power sector on the
strength of multi-buyer model
• creating a Power Market in India and
neighboring countries
Promoted by public sector majors in the
industry (NTPC, POWERGRID, PFC and
NHPC), PTCis an integrated energy player
in power trading, investments, Advisory
services and renewable energy.We have pan
India presence having relationship with all the
utilities in the country. We are the largest power
trading company in India with trading volume
of about 50 BU.
PTC is trading power not only in India
rather with neighbouring countries like Nepal,
Bhutan and Bangladesh also. PTC is uniquely
placed at the centre to contribute more to cross-
border power trade.
how does PTC aim to provide
the best value to both the buyers
and sellers and ensure optimum
utilization of resources at the
same time?
he biggest challenge in renewable are the
receivables. Once a power developer sells
it to the states, the state electricity boards
are not having suicient paying capacities
to pay all the renewable bills in time. States
are mostly defaulting in making payments
to renewable energy developers. One of the
western states was one of the best paymasters
but they also haven’t paid to the developer
for say more than ten months. he role
of intermediary is all the more important
because renewable companies are interested
to see that there is an intermediary who can
do risk mitigation on their behalf. Other
than that once the market is getting saturated
it is very important to ensure that the best
generator gets a priority to sell the power in
the market irst. And that can be done if there
is a renewable market. Rather than irst come
irst serve basis there should be competition
among renewable generators which can
happen if there are renewable traders in the
market who can prioritise the generators
who are more eicient who can bring more
economy. We have to make the market very
dynamic.
Take for instance Tamil Nadu where the state
is not willing to take any more renewable. But
if the state is allowed to sell renewable out of
the state then it is a win-win situation. Market
creation is that. You understand the need of
the market and come out with a product which
is required in this particular market. If any
state has more renewable sources then allow
them to sell it in the market and give them
the opportunity that whatever you sell will be
treated as renewable only. he state government
has to be proactive.
what are your expectations/
speculations regarding the
renewable energy future five
years from now?
We expect the share of renewables in overall
power generation to steadily rise in the coming
years as more and more solar and wind projects
start producing power. Ater price for solar
power went below 3 rupees a unit and the
price for wind power is also very competitively
placed, it will encourage consumers to switch to
cleaner sources of energy.
As per NREL, USA report 22% of total
energy would be from renewable by the year
2022. he total generation from renewable
energy would be 370 BUs which can be 54%
of the total energy need at any particular
time of the day.

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Credit rating of
renewable power
projects
Renewable power sector, particularly wind and solar, is witnessing a signiicant
growth supported by government policies and regulatory incentives
C
redit Rating is an opinion on the
creditworthiness or the relative
ability and willingness of the issuer
of a debt instrument to meet debt
servicing obligation as and when they arise.
Credit Rating plays a crucial role in providing
lenders with vital information that helps them
in determining whether issuer of debt will be
able to meet its obligations in a timely manner.
he analysis of the same is based on past trends
and future prospects. While renewable power
projects have a number of similar features as
any other power projects, there are certain
unique operational risks, which are considered
in credit risk assessment.
Renewable power sector, particularly
wind and solar, is witnessing a signiicant
growth supported by government policies and
regulatory incentives. Solar and wind power
projects tend to beneit from long-term power
purchase agreements, which substantially
mitigates price and volume revenue risk. hus,
solar and wind power projects primarily depend
upon availability of wind/solar resources for
power generation. hese projects beneit from
predictability of revenue; at the same time
they are exposed to climatic risks. Also, solar
technologies are evolving and have a limited
track record in India, which poses the risk of any
technological surprises. Further, a large number
RATINGS
of power otakers being state power distribution
utilities, renewable power producers get exposed
to the counterparty payment risks.
ll Framework For aSSeSSInG
renewaBle Power ProjeCTS
In order to diferentiate credit risk among the
projects in this sector, CARE mainly assesses
following rating factors:
ll ProjeCT ImPlemenTaTIon
Project implementation risks assume
signiicance in ‘yet to be operational’ projects.
While technical complexity in renewable
power projects is limited; land availability,
approvals and creation of power evacuation
infrastructure pose challenge. Availability of
funds, both debt and equity, is also crucial.
Also, experience, track record and contractual
arrangements with the EPC contractor are
June 2017 | Energy Next | 43
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critical factors. It is important to assess the
availability/creation of transmission lines,
which could pose a challenge for timely
completion. Timely progress on execution is
important not only for timely completion but
also to meet the timelines stipulated in the
agreement with the power otakers.
Post the completion of construction,
renewable power projects face the risk
of stabilization of power generation and
payment receipts from the otaker. On
account of these additional risks, compared
to the operational projects, under execution
projects tend to have a relatively lower rating.
ll ProjeCT oPeraTIonS
Power generation in renewable power projects
is dependent upon climatic conditions,
technology used, quality of equipments, plant
& grid availability and O&M activities. In the
conceptualization stage, resource assessment
studies are carried out, which provide
important benchmarks for expected generation
levels. Wind projects witness variation in wind
patterns and also seasonality factors. Solar
power plants witness degradation over the
period, thus an adequate annual degradation
is taken into account. For the under execution
projects, P-75 or more conservatively P-90 level
are considered. For the operational projects,
actual performance vis-à-vis projected levels
are analyised. Assessment of the quality and
experience of the resource consultant and
methodological approach is done. As the
concessions entered into are for long term, the
projects are required to sustain the operating
performance over a long period of time.
It is also important to evaluate the
technology used, reputation of equipment
supplier, warranties provided and inancial
proile of the equipment suppliers. Entities
sourcing equipment from reputed suppliers
with performance warranties backed by
adequate security mechanism considered
favourably. Further, availability of transmission
infrastructure for uninterrupted sale of power
is important. he experience and quality of the
O&M contractor and the strength of the O&M
agreement are other important factors to assess.
ll oFFTake & CounTerParTy
rISkS
Majority of the renewable power producers
enter into long-term otake arrangement with
44 | Energy Next | June 2017
the state utilities or central nodal agencies
in the form of PPAs which reduce demand
risks. Lack of such agreement can be a credit
concern for power otake. Per unit contracted
price of power is important factor which
impacts the proitability and cash lows of
the project. A lower power tarif can result in
inadequacy of cash lows at the same time a
very high tarif can result in reservation of the
otaker for purchase of contracted power.
he counter-party risk remains a key
factor as majority of the projects sell power
to a single otaker. Even if adequate power
is generated and supplied, delay in payments
by the otaker can impact the SPV’s cash
lows. Credit risk proile of the otaker and
payment track record are the important
factors to analyise. Further, strength of the
PPA in terms of penalty for delays, letter of
credit, termination payments are crucial. Also,
diversiication in terms of multiple otakers is
considered favorably in the credit assessment.
ll FInanCIal ProFIle
One of the key credit factors for rating of
renewable power projects is predictability of
the cash low stream supporting a project’s debt
servicing obligations. Apart from generation
level and time taken in payment receipts;
proitability levels, interest cost, determine
cash lows of the project. On the other hand,
interest rate, loan tenure and structuring would
impact the debt servicing obligations. he
analysis focuses on the adequacy and stability of
cash lows for debt servicing. CARE favorably
considers presence of DSRA, unutilized
working capital limits, sponsor’s ability and
willingness to support the project by timely
infusion of funds to enable the companies to
tide over temporary liquidity requirements.
ll manaGemenT qualITy and
exPerIenCe
CARE evaluates the management from
diferent perspectives like inancial
capabilities, experience in the industry,
track record in implementing and operating
renewable power projects and availability of
technical manpower.
CARE’s assessment considers the above
mentioned factors based on their materiality,
potential efect on performance and general
characteristics. Also, peer comparisons are
carried out as an integral part of analysis.
Mitigation of credit risk due to any credit
enhancement provided is carefully evaluated
before assigning inal rating.
CARE undertakes credit rating exercise
based upon information provided by the
company, in-house databases and data
from other sources that CARE considers
reliable. Rating determination is a matter of
experienced and holistic judgment, based
on relevant quantitative factors afecting the
credit quality of the issuer. Hence, CARE
immensely beneits out of subject matter
expertise developed from rating of a large
number of renewable power producers.
Moreover, regular interactions with issuers,
technical experts and lenders and investors
of renewable power projects help CARE
update the understanding on various risks
and risk mitigants.
The author Gautam Bafna is Senior Manager
Credit Analysis & Research Ltd (CARE Ratings)
The views and opinions expressed in this article
are the author’s own and do not necessarily
represent the views of the magazine.

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Emergence of
new means in
RE inancial
space
We believe in Indian’s RE sector’s potential and have kept renewable energy
as one of our key knowledge and sunrise sectors, says Pawan Agrawal,
Senior President & Deputy Head (Corporate Finance), Yes Bank
q
what according to you
are the future drivers of
renewable energy in India?
Past couple of years have been unparalleled in
India’s renewable energy growth timeline. he
sector has witnessed considerable traction in
terms of both cohesive and collective eforts/
support from requisite government policy
interventions & relevant stakeholder’s interests.
his has lead to India cementing itself to 2nd
rank in the recently published Renewable
Energy Country Attractiveness Index. However,
having said that, the sector will continue to need
dedicated conidence building measures/eforts
to help the country in achieving its intended goal
of 40 percent of installed capacity from non-
fossil fuel based energy sources by 2030.
Ensuring that renewable energy’s
contractual & regulatory obligations are met
by state Discoms will be key to unlocking
sustainable capacity rampup in the sector.
GOI has duly taken note of this aspect while
designing/implementing UDAY scheme,
which provides for an efective approach to
improve the inancial health structure as well
as the operational eiciencies of state discoms
which shall be evaluated against results
achieved with its rightful implementation by
the States in the future.
Smart grids will hold the key to the future.
GOI has also undertaken measures to refurbish
interstate transmission network for transporting
renewable power from renewable rich states to
BANkS
high consumption centers. To this efect a Green
Energy Corridor (GEC) is being set up by Power
Grid Corporation of India Limited (PGCIL).
Although renewable inancing in India is
seeing evolution and sizeable scaling up of
innovative inancial measures/structures i.e.
Green Bonds, institutional guarantees, etc,
concept of “INVIT’s” is also being evaluated
by some, a lot more of such structures need
to be delved upon and brought to book i.e.
Warehousing facilities, Takeout and reinancing
schemes, yield co’setc to help developers unlock
their invested capital and investing in rampant
green-ield capacity buildup.
Can you shed some light on
various innovative financing
options available in renewable
energy sector in India?
Opportunities in India’s renewable energy build
up has resulted in mobilizing several strategic &
inancial investors towards the sector. Majority of
June 2017 | Energy Next | 45
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the players have created an impressive portfolio
by making use of conventional domestic
inancing and are now aggressively looking at
alternative means of inances for churning their
operating portfolio to ramp up new capacity/
ensuring sustainable yields etc.
While Indian Banking system continues to
spearhead renewable project’s underwriting/
inancing requirements, the sector’s inancial
space has witnessed emergence of new means
and structures thereby enhancing funds
availability in the past couple of years. Green
Bonds have become the most prevalent
instruments (labelled green bond issuances of
~INR 3.2 Bn as on 5th April, 2017) to mobilize
long tenured inancing from global & domestic
investors in the sector. So, much so that India
which had raised its irst ever green bond in Feb,
2015(YES Bank issuance of INR 10 Bn) has now
become 7th globally in the country wide list of
global green bonds issuances till date.
Structures such as Credit Enhancement/
Credit Guarantees have been also evolving
catapulting into ever rising lows of institutional
inance into the sector. Leading Indian IPP’s have
availed counter guarantee/ third party guarantee
products from unilateral/multilateral institutions
leading to upgrade in bond ratings, consequently
meeting the stringent investment criteria for
pension funds, insurance companies etc globally.
Project level participation structures
like equity inancing from contractors and
equipment suppliers have also been a rising
trend in the sector.
according to various studies, the
high cost of debt (high interest
rates) is the most pressing
problem currently facing the
financing of renewable energy.
how is innovative financing going
to improve this situation?
Continued availability of low cost, long term
capital for inancing renewable projects will
remains one of the key challenges. Domestic
debt interest rates are one of the issues but as we
have seen these rates are showing a declining
trend as the industry draws comfort with
maturing technology and renowned established
players in the industry.
One of the key issues that I would like to
highlight in particular is that while in other parts
of the world, longer term low cost inancing
options are available, we in India have not been
46 | Energy Next | June 2017
able to take much advantage of the same due
to high hedging costs. RE inancing due to its
annuity nature should naturally attract long
term foreign investors (viz. pension funds &
college endowments), the currency risk severely
limits their participation. he market for long
term USD/INR hedge is still very illiquid &
expensive. While for developed markets these
costs are in the range of 150 – 300 bps, USD/INR
hedge costs upwards of 650 bps and has limited
availability for tenors exceeding 5 years. An idea
in this regard has been for creation of a pooled
fund backed by the Government/Multilateral
Institutions for partially covering some of the
long term currency hedging costs. he fund
can provide partial downside protection based
on transparent auctions and while this may
seem counterintuitive, it will help build a deeper
market for such products.
what are the innovative financing
solutions provided by yes Bank to
developers?
YES Bank was also the irst Indian Bank in the
Indian solar sector to underwrite innovatively
structured bond issuance by Hindustan
power group, under IIFCL’s partial guarantee
schemes, counter guaranteed by ADB. Just
to outline some of the key takeaways for YES
Bank investment in these Bonds – Banks
investments in Bonds falls under its investment
book thereby excluding it from PSL obligation
resulting in lower costs. Further, since these
bonds are highly rated, AA+, due to IIFCL/
ADB credit enhancement structure, there
is much lower capital requirement thereby
increasing bank’s appetite to take such
exposures. Also, being listed instruments, these
bonds have potential to generate interest from
long term investors such as pension, insurance
and provident funds etc.
As it is well known, YES Bank was India’s
irst ever Green Bond issuer in February 2015,
when it raised INR 10 Bn in local currency
through green infrastructure bonds. Following
the success of its irst issue, the Bank has further
raised another INR 3.15 Bn in August 2015
with private placement to IFC Washington and
another INR 3.30 Bn in September 2016 placed
with FMO, Netherlands depicting international
investor’s strong conviction in the bank’s green
methodology.
We continue to leverage from our strong
and experienced corporate inance, sustainable
investment banking, debt capital market etc.
practices for proactively facilitating investment
and inancing solutions for our Renewable
Energy clientele and pride ourselves in
epitomizing inancial innovativeness/uniqueness
in India’s renewable energy growth story.
yes Bank is the first bank
to launch India’s first green
infrastructure bond. what has
been its journey so far?
At YES Bank, we strongly believe in Indian’s
renewable energy sector’s potential and have
kept renewable energy as one of our key
knowledge and sunrise sectors, in line with our
ethos of sustainable development. YES Bank
has been at the forefront of renewable energy
growth story in India by constantly engaging
with all the stakeholders, including the
government, regulators, developers, domestic
and global investors, multilaterals and think-
tanks etc for institutionalizing both innovative
policy-level as well as inancing mechanism.
We at YES Bank were one of the very irst
lenders to have advised and hand held renewable
developers, when the industry was in its nascent
stage ever. From the humble beginning of
renewable energy exposure in the inancial year
ending 2014, YBL today boasts of one of the
largest renewable energy exposure in the private
banking space.
YES Bank also pioneered India’s irst Green
Infrastructure Bond in early 2015 and has
till date completed a hat-trick of green bond
issuances totalling INR 16.45 Bn (~USD 250
MM), experimenting/optimizing every possible
option/route available including green-shoe,
masala, private placement etc.
YES Bank has also committed to mobilize
USD 5 Bn for climate action, a pledge we took
on the sidelines of COP21 deliberations in Paris
in addition to being the irst private sector bank
in India to give Green Energy Commitment
(GEC’s) to the tune of 5 GW during RE-INVEST
2015. Besides being partner to the Indian
Government on important initiatives like RE-
INVEST, and the International Solar Alliance
(ISA), we have been extensively engaging with
important stakeholders like RBI also in ensuring
policy and regulatory alignments with green
growth aspirations.
The views and opinions expressed in this article
are the author’s own and do not necessarily
represent the views of the magazine.

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RE sector has seen several
boom and bust cycles
Interest rates have fallen by about 20 per cent over the last two years, and are no
longer a problem faced by companies, feels Raj Prabhu, CEO and Co-founder,
Mercom Capital Group
increase in bond issues as a way of raising funds.
Renew Power issued non-convertible debentures;
NTPC has listed masala bonds on foreign
exchanges. With low bids and low margins,
borrowing in the current environment in India is
complicated. Other instruments include - buyer’s
credit from module manufacturers, line of credit,
debt funds, reinance with foreign lenders or
infrastructure funds.
according to various studies, the
high cost of debt (high interest
q
Can you shed some light rates) is the most pressing
on various innovative problem currently facing the
financing options financing of renewable energy.
available in renewable energy how is innovative financing going
sector in India? to improve this situation?
Other than various forms of project funding like High interest used to be a problem not so much
recourse and non-recourse, we are seeing an anymore. Interest rates have fallen by about 20
INNOVATIVE FINANCING
percent over the last two years. However, interest
rates when compared to other countries, is still
very high. Developers are getting cheap buyer’s
credit from manufacturers to fund the project
initially and a line of credit followed by domestic
borrowing, debt funds at low rates and ater the
projects are operational for a few years, reinance
with foreign lenders or infrastructure funds.
Can you talk a bit about the
financing options that are most
popular with developers?
Short-term and long-term loans from
development banks, Syndicated loans from
domestic lenders and inancing instruments.
reports suggest that ‘General
Indian financial market conditions
are the main cause of high interest
June 2017 | Energy Next | 47
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rates for renewable energy.’ what
are these conditions and how far
do you agree to this?
I am not sure about that. Interest rate in any
country relects the growth and inlation
and also the central bank’s monetary policy.
In a nut shell, if you can’t control inlation
in a fast growing economy, high interest
rates are the result. his applies to the
whole Indian economy and has nothing
to do with renewable energy. Of course, a
small developer will pay more interest rates
compared to Adani because of size balance
sheet etc. As I mentioned earlier interest rates
have dropped approximately 20 percent over
the last two years.
regulatory or policy lessons
that India has been using as
guidelines from the developed
economies do not, in many
cases, comply to the Indian
environment. So what could
be an alternate way to explore
potential policy solutions to bring
lower cost, long-term debt into
the Indian renewable energy
market?
Government can provide access to cheaper
loans but you would be essentially favouring
one sector over the other. he simplest
solution is to create a robust open market
that is attractive to foreign investors who
can deploy capital at lower costs. For this
to happen, bureaucracy needs to be at a
minimum, policies need to be stable and long-
term and there shouldn’t be any uncertainty
around policies. Even with all this, foreign
investors still need to make a return and with
the current auction and low tarif environment
that will be tough. Solar component prices
have fallen very quickly over the last one year
(about 30%) more than making up for higher
borrowing costs. Reducing regulatory burden,
cutting solar park fees will also help.
Innovative inancing solutions like solar lease
(zero upfront cost) can remove the hurdle
of higher initial costs. Long-term loans
(zero down) are another option for home
owners who want to own the solar system.
he challenge is many home owners may
not qualify for such inancing but it is a good
option for businesses initially.
what are your expectations/
speculations regarding the sector
5 years from now?
hings change quickly in this sector and we
have seen several boom and bust cycles over
the last 5 years. In next few years India will
need to address transmission bottleneck
challenges. he price of day time power prices
will fall signiicantly due to solar installations
and DISCOMs will lose revenues. Unless
power demand picks up signiicantly we may
have a situation where there is surplus power
and no takers. India’s economy needs to grow
at a robust rate and electricity consumption
along with it, if not, it will be challenging.
Taking a cue from global
financing trend in the sustainable
sector by leaders like China,
uS and Germany and uk, how,
according to you can similar
financing models be replicated in
India?
here is not a single good model. It all
depends individual countries and where
each economy is. he China’s interest rate is
around 4 percent, US, UK and Germany’s
rates are below 1percent. Also, interest rates
are not a big factor when they are low. hat
said if the country has a robust inancial
system innovation will happen as need arises.
For example, in the US, solar leases became
popular for a while using tax equity funds
because US incentivizes investments in solar
and wind through a 30 percent investment
tax credit (companies/banks who have
tax obligations can invest in this and get a
credit). As solar technology matured zero
down loans have become popular as banks
are comfortable lending as they look at solar
as another home appliance. We saw the rise
of Yieldcos (similar model as real estate
investment trusts) for a while as the cost of
capital was lower than tax equity funds. hen
came securitization (pooling hundreds of
solar assets into a portfolio and selling it to the
inancial markets) deals which gave access to
even cheaper loans. Some of these innovations
in inancial instruments are applicable to
individual markets based on need, interest
rates and policies.

one of the most discouraging

factors for people opting for
renewable energy is its very high
initial costs of the re systems.
what solutions does innovative
financing have for this?
Consumers directly interact with renewable
energy mostly through roof top solar.

48 | Energy Next | June 2017

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‘Innovative may supply ample electricity but you may have

blackouts which can impact cash lows. Earlier,
solar capacity of 5MW, 10 MW, 25 MW solar

financing was used which did not imbalance the grid.

However, today we have renewable of 250 MW,
500 MW, 1000 MW in the grid which can make

instruments need the diference. Storage is a big issue. Hydro and

thermal can take the load without storage but we
need to think about new methods of renewable

of the hour’ energy with the storage. hen, this grid will be
stable and we will not have blackouts.

why do we need financial

As banks are burdened with stressed loans and
overexposed to the infrastructure sector, foreign and
domestic institutional investors have the potential to
bridge this inancing gap, says ES Rao, Chief General
Manager, India Infrastructure Finance Company Ltd.
solar power, 60MW of wind, 10 GW of waste-
to-energy and 5GW of small hydropower.
how much investment do we
need for Indian renewable sector?
As of now, installed renewable capacity stands at
57.26 GW comprising wind, small hydro plants,
waste to energy and solar at 32.37 GW, 4.37 GW,
8.3 GW and 12.28 GW respectively. Additional
investment required is $189 billion including
$57 billion in equity and 132 billion in debt.
As banks are burdened with stressed loans and
overexposed to the infrastructure sector, foreign
and domestic institutional investors have the
potential to bridge this inancing gap.
institutions along with the banks?
also, tell us about the financial
instruments that are available
with these institutions.
Banks are giving the inance but that is
not suicient. You need to have diferent
instruments, that is exactly where inancial
institutions come into picture. Some of the
instrumentsprovided by theseinstitutions are:
• Credit enhancement
• Infrastructure debt fund
• Infrastructure investment trusts
• Securitization and asset backed securities
• Green bonds
Credit enhancement, infrastructure debt funds
and green bonds are already in operation.
However, one needs to look into infrastructure
investment trusts and securitization.
Please tell us about IIFC’s role in
financing?
We channelize insurance company’s funds,

q
when was IIFCl started?
what was its objective?
IIFCL is a wholly-owned Government
of India company set up in 2006 to provide long
term inance to viable infrastructure project.
We have one oice in Delhi and a subsidiary in
UK which takes care of forex. IIFCL MF (IDF)
takes care of innovative structured inance and
we have an advisory company which acts as an
advisory for the government and the corporates.
what do you think about the
progress of Indian renewable
sector?
Solar is going to be a boom. India has a total
installed power generation of 326848MW
comprising 57260 of renewable, which is almost
17 percent. India has ambitious renewable
energy targets of 175 GW 2022 with 100 MW
do you think approaching banks
for investment is an easy option
for renewable energy developers?
Long terms funds are not always available with
commercial banks, hence, you require diferent
solutions. It is very well possible to approach
domestic as well as international banks for
investment but your product should be
attractive enough. Whether you are a developer,
banker, or equity player, the cost of the inance
will go haywire if it is messed up.
what are the risks faced by the
developers and how should they
overcome them?
Technically, you have fossil fuel and solar energy
on the same grid. It is not easy to predict what
kind of grid stability will remain ater 2020. You
pension funds and commercial banks funds.
We take any project which is BBB in nature and
give the credit enhancement with the balance
sheet of IIFCL and increase it to AA and AA+
so that the bonds can be issued by the company.
We have done two projects, one is Hindustan
Power and Renew Power. We have got raised
bonds worth 600 crores. hese companies are
doing really well today.
what is the advantage of credit
enhancement?
he advantages of credit enhancement are:
• Better rating for infrastructure project (AA
or higher)
• Bridges gap between stand-alone rating and
min. investment rating for long term investors
like insurance and pension funds
• Efective in mobilization of long term debt

June 2017 | Energy Next | 49

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• Freeing up of bank’s capital as well as
exposure.
• Longer term funds for the project with cash
low suiting a project’s requirements.
• Development of bond markets
• Reduced rate of interest
also, tell us about IdFand
alternate Investment Fund.
We have $100 million IDF which is there for
every infra project including solar. his was
introduced just three years ago and is doing
really well today. It is an alternative medium to
long term investment instrument with options
of tenor ranging 5 to 20 years. Investors to IDF
includes FIIs, Pension funds, insurance cos,
sovereign wealth funds and other investors.
IDF (MF) can provide a ‘Structured Financial
Products’ for SPVs and infrastructure
companies. It has the potential to reduce cost
of inancing to the project and promoters based
on the rating and class of investment used. We
are also in the process of setting up Alternate
Investment Fund (AIF) for green initiatives
are Invits a good option for
people associated with renewable
energy?
Infrastructure investment trusts is good for
50 | Energy Next | June 2017
It is very well possible to approach
domestic as well as international banks
for investment but your product should
be attractive enough
developers. Recently, it was done for the road
sector where IRB was able to raise 5000 crores
successfully. If you have more solar assets, Invits
will be fruitful as you can channelize the funds
and can get a lot of money from the public as
well as institutions.
Invits are mutual fund like intermediaries
enabling investments into the infrastructure
sector by pooling diferent investors like HNI,
FTs FPTs and retail and channelize funds into
infrastructure projects. Mandatory listing of
invits ofers investment opportunity to a larger
pool of investors and inancial institutions.
hey are helpful in reducing exposure of Indian
banking system and free up the banks capital
Existing developers and banks will be able
to deleverage their debt from the completed
projects which will enable them to focus on
new projects in the sector and will improve the
investor sentiment.
what is the scope of
securitisation in renewable
sector?
Securitisation has not come in the
infrastructure sector but it can come in the near
future. Currently, it is available for credit card
and automobile sector. Instead of individual
loan, bonds, the pool will be there and
promissory notes or bonds will be issued so that
you get more money. Banks can be deleveraged.
One of the inancial institutions is trying to
introduce securitisation in infrastructure sector
but it will take some time.
Could you elaborate the
challenges and benefits of Green
Bonds?
Green bonds worth $82 billion are available
internationally. In India, banks like Yes Bank
and World Bank have launched green bonds.
Green Bonds is a debt instrument by an entity
raising funds ‘earmarked’ for use towards
inancing ‘green’ projects assets business
activities with environmental beneits. It
attracts new class investor base - insurance
funds, pension funds, sovereign wealth funds
apart from the traditional investors. It helps
in enhancing an issuer’s reputation illustrates
green credentials of the issuer and demonstrates
commitment towards the development and
sustainability of the environment.
he caution is that green bonds come with
currency risk. However, if you raise green
masala bonds, you will not have the risk
of forex. One should be very careful about
inancing instruments and mitigation of risks.
Could you shed some light
on innovative financing for
renewable? also, how can we
mitigate the risk?
RE is a growing infra sector in the country.
Innovative inancing instruments are need of
the hour for the viability and sustainability of
the RE sector. Care should be taken to ensure
the operational parameters risk mitigating with
special risk insurance instrument.
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‘We want to make investing in

solar as simple as investing in
mutual funds’

Aggregation platforms like Energy Sage, Power Scout and Abundance

Investment have been instrumental in making solar adoption and investment
accessible to masses in the USA and Europe, says Rajiv Dinesh co-founder and
CEO, Sunfund Renewable, an advisory platform for solar setups
consumers?
Sunfund helps customers to discover their
solar savings potential, understand long term
implications of diferent inancing models and
get ofers from India’s leading solar companies
for their solar requirement. In other words
Sunfund helps customers from every segment
- residential, institutional, industrial and
commercial - to ‘Go Solar With Conidence’.
Access to neutral and reliable advisory
has been a critical and growing gap in the
industry. Customers today don’t know
where to start their search for solar, where
customers and diidence in decision making.
Our goal is to present right information and
connections that make investing in solar as
simple as investing in mutual funds.
The company works closely with
the industry. Tell us about your
associated with the veterans in
the industry?
In fact I would call solar companies also as
customers of the platform. Solar companies
today are inundated with leads of variable
quality and end up spending a lot of precious

q
Sunfund works as an
advisory fulfilment
platform for solar
consumers. Tell us how does
it work for the benefit of
to get information whether solar is right for
their speciic needs, or to understand the
diferent modalities in going solar. With the
ever-growing number of manufacturers and
installers, there is confusion in the minds of
business development time, efort and money
to follow up on these.
We have optimized and technologically
enabled processes like site surveys, technical
analysis, O&M etc. to enable solar companies

June 2017 | Energy Next | 51

 START-UP INDIA
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to save time and cost on these activities by
utilizing our services in these domains.
We also help them save on business
development costs with access to highly
qualiied leads on our platform. his is
because our customers understand exactly
what they want out of solar, we give solar
companies access to decision makers, and
we match customer and companies that are
relevant for each other.
We have been working with veterans in
the solar industry ranging from the solar
arms of large conglomerates like Hero, Bosch
and Tata to specialist solar companies like
Cleanmax, Amplus, Sunsource, etc. What
has been amazing is the speed with which
the leaders in these companies understood
the beneits of our ofering and acted on it
by actively participating on the platform. I
would deinitely attest to the fact that the solar
industry is being led by highly ambitious,
tactically agile and strategically astute leaders.
his can only imply good things for India’s
solar future, as we combine our customer
focused platform with the delivery capability
of the solar developers and EPC companies.
Is there any criterion for a
company to be able to join your
platform?
One of the objectives of our platform is to
ensure that customers interact with a pre
screened set of quality installers who know
their job and who have the capacities to
service you today and tomorrow. We believe
52 | Energy Next | June 2017
The inlux of talent into the clean energy
ield has been remarkable. This of course
has to also do with the massive impetus
and priority given to the sector by the
government, personally led by PM Modi
that a big threat to the solar industry is loss
of conidence due to poor workmanship by
novice solar companies.
Solar companies can join the platform
by registering at https://www.sunfund.in/
installer/ and clicking on Join Sunfund. Solar
companies can create a web based Company
Proile, and Case Studies of their satisied
customers. hey can also upload documents,
images and videos of their work to have a
single window showcase of their company.
We have seen that making the efort to create
a good quality proile can have a very positive
efect on potential customers.
We are currently on-boarding solar
companies with the following minimum
qualiications:
• Should be a MNRE Channel Partner
• Should have at least 3 years of experience in
solar rootop installations
• Should have at least 20 running solar
installation
Project opportunities get further iltered
relevant to the geographies of operation, sizes
of projects previously installed and customer
mandate. his ensures that solar companies do
not end up wasting any time on irrelevant leads.
you are one of its kind platform
in the country. where did the
idea come in from?
Two years ago, I had my irst exposure to solar
when I joined my friend and now co-founder
Ankit Sheoran (a seasoned solar entrepreneur
with experience across the country) on a trip
for a rootop solar installation in a remote
village in Uttarakhand. From then, we would
continuously debate the challenges on the
road to comprehensive solar adoption in
India, now that the technology had become
inancially viable. At the same time, we
also noticed the way people’s patterns of
consuming information, online shopping,
comparison shopping, review based shopping
were evolving in the country. With my
technology and consulting background and
Ankit’s experience in solar, we felt that we
could deinitely be the agents of change for
jumpstarting solar adoption in India through
the unique platform that has come to be
known as Sunfund.
how are platforms like these
helping the cause elsewhere
internationally? how did you feel
the need for such a platform in
India?
Aggregation platforms like Energysage, Power
Scout and Abundance investment have been
instrumental in making solar adoption and
solar investment accessible to more and more
people in the USA and Europe.
he brilliant thing about such platforms
is that they can not only provide very neutral
information to customers but also gather neutral
market intelligence from a large number of
customers. Just over the last 10 months, we have
been closely involved in understanding the solar
requirement and uniltered opinions of over
a thousand customers. Starting from the last
quarter of this year, we will be publishing detailed
quarterly customer intelligence reports that can
act like a feedback loop for solar companies to

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better meet the needs of their clientele.
We felt that solar in India had crossed the
inlection point from being in the domain of
few environmentally-focused or government-
mandated organizations to being accessible
and inancially viable to almost every customer
segment in the country. However, our diligent
market research showed the gaps in trust and
conidence that was preventing the mainstream
from adopting solar more aggressively. Having
looked at our own capabilities, the track record
of international aggregation platforms and
the emergent scenario in India, we felt that
the Sunfund platform could be the answer for
accelerating solar adoption.
India has set an ambitious clean
energy target and with more and
more youth joining in, how far do
you think we have reached on
the goal?
Indeed, the inlux of talent into the clean
energy ield has been remarkable, especially
over the last ive years. his of course has
to also do with the massive impetus and
priority given to the sector by the government,
personally led by Prime Minister Modi. he
rate of solar adoption is staggering and an
example for the rest of the world.
While the country is making excellent
progress on the government driven solar farm
sector, rootop sector has also been doubling in
installed capacity over the last couple of years.
his however, still falls short of the targets
envisaged for the rootop sector. he main
things that need to be overcome to enable the
market to reach its potential are as follows:
We felt that solar in India had crossed
the inlection point from being in
the domain of few environmentally-
focused or government-mandated
organizations to being accessible
and inancially viable to almost every
customer segment in the country
• Awareness and access to information -
various programs of the government and the
Sunfund platform have already started making
an impact in this space. However the reach
will need to be broadened
• Access to inance - this is an area that still
needs a lot of work. While banks across
India have shown an increasing support for
this sector, inancing in this ield needs to
be productized to result in a convenient and
viable option for customers
• Greater participation of Discoms -
Discoms will also need to encourage people
through their rapid response to net metering
requests, implementation of solar related
regulations etc.
renewables shows tremendous
promise for jobs creation in lndia
and venture is a perfect case for
start-up and digital India. your
comments?
A positive and highly desirable fallout of the
ambitious target of the government in this sector
is the creation of jobs, not just for the current
exponential growth phase, but also for the longer
IDEAS
term operations, maintenance and new capacity
addition in the renewables sector. he emerging
areas of Start-up India, Digital India and Skill
India can work beautifully in parallel with
the growth of this industry to create a skilled,
entrepreneurial and tech-enabled workforce for
fulilling the needs of this sector.
Summarize three reasons why
renewables hold the promise for
modi skill India call?
• Growth of renewable entrepreneurs across
the country, and development of skilled
workforces within these companies, as
witnessed by the surge of MNRE channel
partners over the last year
• Massive requirement of skilled distributed
workforce for operations and maintenance of
multi-billion dollar built infrastructure which
will create jobs for the upcoming generation of
employable youths as well
• Growth of technology and knowledge-based
platforms and entrepreneurs (like Sunfund)
trying to optimize the emerging challenges
this very large ecosystem.
June 2017 | Energy Next | 53
 INTERVIEW
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To meet targets India needs to
bundle up against falling tarifs
In order to attract more investment in India, a government-level pricing
module and inancial support need to be looked at, says Glenn Ensor,
Managing Director at Penwell International
q
Pennwell has been
publishing print and
online magazines and
newsletters, conducting many
conferences and exhibitions
across six continents for years.
what has been the response so
far?
Since 1910 PennWell has been known
for providing comprehensive coverage
of global strategic markets. In 1988
PennWell launched its first event and now
internationally the POWER-GEN franchise
is the largest, covering six continents.
Obviously events in any market are the
parameters of the market in which they
serve. It has been very interesting, in my
18 years of the company, to see the ebb
and flow that reflect the markets as they
are. We have been in the Indian market
since 1996 and we reached an absolute high
point in the market in 2011-2012. Since
then with the rush in renewables, it has
been a struggle for the conventional power
market and we have seen that reflected in
POWER-GEN as well. We are committed to
India and we want to deliver the best events
in every market in which we operate.
Talking about the response and looking at
the power market around the world, Europe
54 | Energy Next | June 2017
is currently going through huge transition
which is creating diiculties for utility
players. Africa is a growing market and our
businesses in South East Asia is very strong.
With cheap access to gas, North America is
a very steady power market.
how is the Power-Gen
India & Central asia and
renewable energy world India
2017 different from previous
editions? and what is the
response from the audience?
We are in the process of re-strategizing the
event and will be announcing new event
information soon.
The event is still the largest gathering
of thermal power professionals in India
However, we are struggling with the
renewables market. We need to find a way
to get that market more energised.
We think that the thermal sector is going
to be steady and continue to provide a bit
of bedrock for the power generation sector.
We will be looking to cover the digitisation
of the power sector and explore the value
chain in terms of the supply of the power
and end-consumers. A new beginning for
POWER-GEN is coming.
what breakthrough solutions
do you have for the renewable
energy market?
It is not our job to provide solutions, our job
is to communicate them and relect where
they come from in the market. However,
if you are looking at the problems of the
renewable sector per se, in India for instance,
they now expect very low prices for KW/
hr for solar units. his I think is going to be
a break on investment. So, India needs to
deal with that question if the booms and the
targets for old installations are to be met.
Worldwide, not just India, if scalable
– utility scales or industrial scales storage
–that breakthrough is going to happen and
we are moving towards that very quickly.
his probably happened more quickly than
people think. he combination of wind and
certainly solar and storage will have massive
implications on the shape of the energy
provision sector going forward. hat moment
is coming and everybody ready for it.
As the very ability of renewables has been
its weakness and that is why must be backed
up by controllable power plants. One doesn’t
have to be genius to see what that means in
terms of India reaching its COP target.
what do you have to say about
uk/uSa Government’s policies,
subsidies and incentives for the
renewable industry?
It is interesting because when one thinks
of the US government under the image
projected by the current administration,
one thinks that they wish to head back into
fossil fuels. But that is not going to be the
case. The US industry has been dominated
by the access to cheap shale gas for a
long time and the gas market for power
generation is still very strong there because
of the economics.
However, the USA has been leading in
solar and wind energy while Texas and
California for many years have now been
leading wind supplies – a policy encouraged
by George W Bush-I, when he was the
Governor. We seek continuation of that.
We also see the way people in GE are
operating by offering digital solutions in
the sector and if you are looking at major
changes coming, that will be it. One can
only see the current US government’s
move to make coal more popular again,
somewhat aggressive and we would see

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how history judges that. Clean power will
continue to rise in the US and of course
with players like Tesla, they are also
leading the battle of storage. There is a lot
happening there.
The UK, and I speak as a British person
myself, haven’t really had a defined energy
policy. They have been driven largely by
climate commitments. So, the development
of off-shore wind, nuclear energy, the
low-carbon fuels is definitely what the
government is pushing for. Gas, we do use
and its price in Europe and the UK makes
it less attractive option than in the US. We
also question how sustainable the strike
price modules are for things like offshore
wind and nuclear which are very high and
are considered by some of the tax payers
and the bill payers to be unsustainable in
the long run. I will have to see how that
plays out and of course we have an election
coming. We will see.
what’s new in the kitty of
Pennwell?
As a company, we are turning ourselves into
a digital company. Our information ofering
before very long will be 100 per cent digital.
We will create fully immersive and digital
content and provide big data solutions.
This is the scenario in which we are
moving the company rapidly into and
already have been for many years. Our
CEO, even at the ripe age of over 60 years,
had said – ‘Digitize or die.’ Nobody argues
on that perspective any more.
Currently we are securing the markets that
we have. We will continue to maintain a huge
interest in energy. Our business also covers
in ire engineering, coal, advance technology,
lighting that sort of areas as well.
As far as our events are concerned, we
are going to digitise them as well. So, it’s
not just three days of communication, it
is conversational – an ongoing trend in
digital spheres, the social media and other
such platforms.
As I hinted earlier, regarding serving the
power market, we are going to broaden our
scope further down into the whole of what
we call the electricity value chain rather
than separating generation, transmission
and distribution – certainly in Europe and
led by Europe. This is also happening in
other markets as well and happening very
quickly. Those things are melding more
into business models and how people
operate on these models is something we
need to reflect on, we will be doing that.
Seeing the success of the
Power-Gen India & Central
asia 2017, what would be your
next move?
It has been surprisingly successful given
the state of the generation market in
conventional power. I was very happy to be
walking the floor to see it busy. However,
we plan to improve and modernize the
event concept and the delivery of it too.
EVENT
looking at the entire renewable
energy spectrum, what could
be the ways to attract more
investment here?
I think probably a government-level
pricing module and financial support
needs to be looked at. The record rate of
2.44 Kw/hr would be difficult to get returns
as far as the private sector investors in
solar are concerned. It is not a technical
issue, I think that here in India, it is
strategic policy issue. There will be a lot
to talk about it if the Modi government
wishes to achieve its over 100 GW target
of renewable power. The private players
are going to have a huge part to play and
it just has to have the right investment
conditions. It is a financial policy question.
what are the challenges which
you faced in organizing Power-
Gen India & Central asia 2017?
The challenges that we faced were not
logistics really, it was more about how
we communicate with the market and
the people within it. India is an advanced
country now, in many ways, with a
thriving business community that engages
with us. It is important for a thriving
and growing economy like India to keep
up with time and the renovation of the
Pragati Maidan stands testimony to the
ongoing modernization. I look forward to
serving people.
June 2017 | Energy Next | 55
 EVENT
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With stronger
rupee, India
set to attract
investment
According to experts, India is a bank-led market and therefore, interest rates
change frequently. his scares foreign investors. But if we run sensitivity tests
and then we see that luctuations are not much, Energy Next reports
T
he Ministry of New and Renewable
Energy organized one of its kind
event called the Renewable Energy
World India. Held in iconic Pragati
Maidan of capital Delhi, the symposiums,
plenaries and exhibitions brought together
stakeholders in RE sector including
government representatives, industry tycoons,
inancers and academics.
An important session was on inancing
options for RE – “How to Successfully
Finance Renewable Energy Projects – Real-
life Examples”. he session deliberated upon
connections between policies on renewable
energy and businesses which are involved
in it. It was pointed out that if a country like
India, which is among the highest populated
countries on the world, designs its policy in
favour of renewable energy then the business
across the globe beneits.
Indicating at the increasing demand of
renewable energy products, Devin Narang from
Sindicatum, Singapore, said that till six to seven
years ago, India was importing 6,000 LED bulbs
per year. Now, India is imports 6,000 bulbs a
56 | Energy Next | June 2017
day! Many multi-nationals have beneitted from
this demand, and look upto working in India.
High demand from a populous nation has
reduced cost of technology in expectation of
good returns from initial stages itself.
“If we scale up in India, cost of technology
can drop by upto 50%. We found this emotion
resonated in a meeting in Austria. Industry
people from Austria were telling us how
they have beneitted from higher demand in
India. he point is policies in India can create
opportunities for technology and Indian
entrepreneurs settled abroad or working
there,” said Narang.
He said that, however, the country has to
improve returns and the models of inancing
have to take this need into account. “India
is short of both equity and debt and there
are ways to improve the situation. Recently,
National hermal Power Corporation Limited
listed its bonds on London Stock Exchange.
his is a huge opportunity,” he said.
Narang was referring to NTPC, government
run power giant, listing itself on LSE during
visit of Power Minister Piyush Goyal to United
Kingdom. Goyal was visiting the UK for
business events like the India-UK Business
Roundtable on Energy and UK-India Conclave
2017. With this listing, foreign investors have
access to the Indian companies while providing
liquidity to them. his is one of the rare events
as listing a company for masala bonds – bonds
issues outside India but denominated in the
Indian rupees – has to have high turnover
and it is expected that it is ambitious for its
expansion. It also showed that the Indian
government is inclined to help business in
renewable energy.
“Rupee bond is a game changer. Rupee these
days is stronger than before and it is going to
help the business,” Narang added. He said that
Indian distribution companies (Discoms) delay
the work which decreases returns.
Taking on from Narang was DaanishVarma
from Yes bank. He brought in perspectives
from banking and informed the audience
about the expectations of banks. He agreed that
masala bonds are a good strategy. In 2015, Yes
bank had issued masala green bonds in the LSE.
Green bonds are issued to be used in private
 BETTER RETURNS

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sector investments that address climate change. “India with its renewable
He said that cost of borrowing is a concern
due to exchange rates between Indian Rupee programme, is short of equity
and US Dollar. However, he said things are
slowly changing positively for the Indian Rupee.
and debt because every bank
“In our understanding, international markets has limited exposure to power
are opening up to Indian Rupee. But as of now,
they are not taking risks beyond ive years. hey
sector and therefore there is a huge
are going for bonds for ive years maximum. opportunity for people to investing in
But renewable energy bonds need 10 years or
so. So, there is still a gap there,” Varma said. this market.”
Referring to equity and debt issue, he said Devin Narang, Managing Director, Sustainable Biomass,
that both have been available, but have been
Sindicatum Renewable Energy, Singapore
insuicient. “Equity is gravitating toward better
developers,” he said. here have been many
players in the market and all have claimed
money from the banks’ pool. But slowly the “Over the past three to four
companies that have delivered better results are years, we have seen global
garnering more funds.
He said that India’s bond markets are still in liquidity at all time high and
nascent stages and need time to settle. “India
is a bank-led market and therefore, interest
global interest rates at all time
rates change frequently. his scares foreign low. But the most important concern for
investors. But if we run sensitivity tests and
then we see that luctuations are not much,” he
a regulator in India has been the cost of
added. Such patterns can be used to convince inancing. And that has essentially to do
foreign investors.
Meanwhile, long-term projects are typically with dollar-rupee exchange rate and the
funded by the Indian banks. No foreign
bank has long-term balance sheet for Indian
foreign exchange rate.”
currency. He said that not even one solar Daanish Varma, Sustainable Investment Banking, Yes bank
project has been under default in their bank
and hence the future looks bright.
Rakesh Bohra, who works for Green “Two months back I was in
Initiatives at Infosys shared his experience.
“India is a good place for investments because Berlin for Energy Transition
geography is on her side. Radiation in India is Dialogue. There was a huge
among the highest in the world and this energy
should be tapped in,” said Bohra. attraction from global
It was pointed out in the session that
degradation of Photovoltaic (PV) Solar Panels
investors for coming to India and invest
has raised concerns in India. On an average, here. It was very clear that India was a
usually the degradation is 1.5%. However, a
recent study by Indian Institute of Technology
potential market to them.”
– Bombay found that in India this average Rakesh Bohra, Sr Assistant Manager, Green Initiatives, Infosys
is much higher. hey estimated that the
degradation rate is as much as 2.5-2.8% in then the eiciency drops by 50%, afecting out on India’s solar story. With so much of solar
the country. his is due to many reasons. For production of electricity to a great extent. energy in the country, every big player wants
example, pollution is a major reason for faster Hence, it was said that external factors also to harness it and make proits. his will keep
degradation. Dust impacts eiciency of the have to be looked into while creating goals for bringing costs down,” he added.
panels. In less polluted countries, panels are renewable energy in India. It is said that 600 USD of investment is
cleaned once in two to three months. But in Talking about business leaders in the ield, he expected in the next ive years in India. It is
India, they have to be cleaned every 15 days. said that world over there is interest in India’s aimed at meeting the target of 100 Giga Watt of
If a plant is let without cleaning for a month, growth in solar energy. “here is fear of missing renewable energy by 2022.

June 2017 | Energy Next | 57

 EVENT

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SECI to launch ofshore arm to

boost demand in ISA member
ISA to launch an online platform, titled Infopedia that will provide an e-library
with videos and reading material on the best practices that can be shared across
member countries

T
he Solar Energy Corporation of
India Ltd (SECI) is planning to
launch its ofshore arm, SECI Videsh
to increase demand and expand the
solar market in the International Solar Alliance
(ISA) countries.
SECI, which has till now executed 20 GW
of solar through 34 solar projects across 21
states, now plans to expand its operations newer
geographies giving an opportunity to Indian
companies as well other investors to invest in
new markets.
Speaking at the recent “India and the ISA,
accelerating global solar deployment” conference
organized by CII and WWF in the capital, Mr
Sanjay Sharma GM (C&P), SECI said that SECI
plans to expand internationally by launching this
new company.
ISA was founded in 2015 at the sidelines
of UNFCCC CoP21 at Paris, when Prime
Minister Narendra Modi announced India’s
resolve to bring together countries between
the Tropic of Cancer and Capricorn to form
a solar alliance that would seek to deploy
afordable solar energy applications across 121
prospective solar-rich nations.
he growth of solar energy has gained
traction over the last few years across the world
and India has been no exception. Recent bids
for solar projects has fetched power at record
levels of Rs 2,44 a unit, even challenging coal-
based power projects.
In the deliberations on India’s role in scaling
up capacities of solar deployment, Mr Ratul Puri,
Chairman, Hindustan Power Projects Ltd said,
“here have been consistent eforts at de-risking
solar market by reducing costs and subsequently,
one is seeing that solar tarif is 25 per cent
cheaper than conventional energy.”
he role of ISA in expanding the solar story
assumes signiicance in this context as it seeks
to enable afordable power for large developing
countries in this geography.
Mr Upendra Tripathy, former secretary
- MNRE, interim Director General-ISA
said, “ISA will be soon launching an online
platform, titled Infopedia that will provide an
e-library with videos and reading material on
the best practices that can be shared across
member countries, furthering the platform for
the countries to engage and act as a medium
to facilitate replication”.
ISA will be an action-based organization,
focusing on implementation. IT is already
mobilising inance and facilitating transfer of
technology particularly by building networks
with networks of centres of excellence and
capacity building. Finance is a major area where
ISA can help in raising low cost and attractive
inance and de-risk it, Mr Tripathy said.
Highlighting some of the challenges in the
solar sector, Mr Shyam Saran, former foreign
secretary, Govt. of India and trustee, WWF-India
said that paucity of land, variability of power and
high cost storage are some of the issues that need
to be addressed to accelerate growth.
Solar plants normally requires large parcels
of land and that is a challenge for countries
like India or Bangladesh that are densely
populated. Variability of the intensity of the
radiation during the day as well as seasonal
also could pose a challenge warranting quicker
solutions in storage.
Ending energy poverty in developing nations
was the need of the hour even as pressures build
up to cut back emissions and use of fossil fuel.
he ISA could play a huge role in
addressing these challenges and help push for
innovative solutions like hybrid plants that can
address some issues.
Africa, a large part of the ISA geography,
ofers a developing solar market that stands
to beneit immensely through the growth of
technologies and knowledge sharing.
“African countries are emphasizing on
the need to enhance quality of products, as
substandard products may lood the market and
exploit the low disposable income of consumers
by ofering cheap products. We need consistent
eforts at strengthening the consumer trust in
solar technologies,” said Mr Philip Odhiambo,
Programme Coordinator, Energy & Climate
Change, WWF-Kenya.
He further added that solar technologies
need to be deployed for productive uses rather
than just lighting. his will help accelerate
deployment. Connecting energy poverty with
their livelihood will be a win-win situation.
Success of ISA will depend on how countries will
come together and create a demand for solar.”
Echoing a similar though Mr Sidharth Charkha
of Mahindra Susten said, “Solar is increasingly
being looked upon to meet the energy needs of
the people of Bangladesh and Indian industry
can support addressing this demand.”

58 | Energy Next | June 2017

 POWER TWEETS
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Piyush Goyal @PiyushGoyal . May 29
The world’s largest LED lighting
initiative, UJALA, is a glowing
rainbow that lights up India’s path
to development.
Piyush Goyal @PiyushGoyal . May 21
Central Govt. is set to light up the
lives of the people of Tamil Nadu by
distributing 3 cr LED bulbs, under
UJALA.
Piyush Goyal @PiyushGoyal . May 14
Assam welcomes UJALA & PAVAN:
CM @sarbanandsonwal to provide
low-cost LED bulbs, tubelights &
energy eicient fans.

Piyush Goyal @PiyushGoyal . May 23

International Solar Alliance
commissions study on Common
Risk Mitigation Mechanism to
reduce cost of solar projects.

Piyush Goyal @PiyushGoyal . May 12

Piyush Goyal @PiyushGoyal . May 17
India has zoomed past the US to
take the 2nd spot on a list of the
world’s most attractive renewable
energy markets.
Financing afordable Energy:
Launched NTPC’s Masala bonds
on the London Stock Exchange
& initiated the new International
Securities Market.

Piyush Goyal @PiyushGoyal . May 22

India Launches Massive Push for
Clean Power, Lighting, and Cars
http://on.natgeo.com/2q7Rtgi via
@NatGeo
 CORPORATE BUzz

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troduces Pharox
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Adani Green Energy to

raise $200 million
Adani Group’s
renewable energy
arm is seeking to raise
external equity capital
to build a pipeline of projects worth over 2 GW,
according to some oicials.
“They have been holding talks with various
investment banks over the last couple of months
for the same. So far, the group has self-funded
the renewable business and has invested
approximately Rs1,800-1,900 crore (close to
$300 million) into the business,” an oicial said.

60 | Energy Next | June

February
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June 2017 | Energy Next | 61

 MNRE NEWS
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Power Minister promotes indigenous
solar equipment manufacturing
W ith India betting big on
renewables, the government
focuses on promoting indigenous
Government launches Energy
Eicient Buildings Programme
G Government of India launches Energy
Eicient Buildings Programme
to invest Rs 1,000 crore by 2020 under
buildings programme. Power Minister
Piyush Goyal launched the Energy Eicient
Buildings programme in a function jointly
organized by FICCI and EESL in Mumbai in
the presence of Maharashtra PWD Minister
Shri Chandrakant Dada Patil.
he scheme will be implemented
62 | Energy Next | June 2017
manufacturing of high quality solar
equipment.
“Wind - we are manufacturing in India;
hydro equipment is largely indigenous,
and coal based thermal plans are mostly
indigenous. The missing link in the
entire valley chain is solar manufacturing
and the government is very seriously
looking at ways and means to promote
Indian manufacture of high quality solar
equipments,” power minister Piyush
Goyal said.
“So, effectively, we will already be 40
percent of our install capacity roughly by
2022, coming from its renewable sources.
This will significantly up the ante on
availability of low cost power for several
years to come,” he added.
by Energy Eiciency Services Limited
(EESL). An MoU was signed with PWD
Maharashtra to retroit 1500 buildings
under PWD in Maharashtra with energy
eicient appliances. Under the Energy
Eicient Building’s programme EESL
intends to bring investment to the tune of
Rs 1000 crore covering more than 10,000
large government/private buildings in next
2-3 years
ISA can help
achieve universal
energy access
target before 2030
P ower minister Piyush Goyal
talks about the possibilities of
International Solar Alliance as a
medium to promote energy security
which can help achieve universal
energy access target set up in SDGs
before 2030, at the launch of ‘Scaling
Solar Mini Grids’ by France and
India on the sidelines of 52nd Annual
Meeting of the African Development
Bank (AfDB) in Ahmedabad.
He added that Indian renewable
energy sector offers lessons such as
innovative financing models, risk
reduction and setting up large scale
solar projects through energy parks.
Goyal said that Scaling Solar
MiniGrids will work as per
ISA’s objectives and existing
two programmes, Scaling Solar
Applications for Agricultural Use and
Affordable Finance at Scale launched
on April 22, 2016.
Comoros Vice President Ahmed
Said Hassaini Djaffar welcomed the
ISA initiative in his address and added
that Africa is a solar resource rich
region and can achieve solar energy
targets.

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Power minister announces 1,000
MW wind energy auction scheme
P ower minister Piyush Goyal has
recently announced a scheme for
auction of wind power projects of 1,000
MW capacity that will start soon. “A
major decision we came up with is to
Wind power has seen steady growth
in India: Rajeev kapoor, Secy, MNRE
W ind energy has experienced a gradual
development in the last 7-8 years as
the government plans a major ‘green corridor’
project to transport excess renewable energy
to states that need it the most.
“In fact, wind has had a faster
development. One may call it steady
development over the last 7-8 years. Many
global leaders in the ield have set up base in
India,” New and Renewable Energy Secretary
Rajeev Kapoor told media.
“Of course, wind generation is concentrated
only in a few states like Rajasthan, Tamil Nadu,
Karnataka... and it is our aim to facilitate inter-
install another 1,000 MW wind bidding
by the end of the month,” he said.
The scheme is open for all obligated
entities purchasing wind power for
compliance of their non-solar Renewable
Purchase Obligation (RPO). Solar Energy
Corporation of India (SECI) will sign
Power Purchase Agreements with wind
developers and Power Sale Agreements
with buying utilities.
Another provision of 10 percent
additional capacity for Central Public
Sector Entities (CPSEs) has been kept
under the scheme without participation in
the bidding, however, they have to supply
wind power at lowest discovered tariff
through bidding process, the statement
noted.
state transfer of renewable energy to deicient
states,” he said, adding that his ministry had
held a successful tender for inter-state sale of 1
GW wind power.
“he next auction of 1 GW for inter-state
sale is going to take place very soon. One
massive green corridor project is being
planned to ensure that surplus renewable
energy is transported to deicient states. he
National Institute of Wind Energy (NIWE)
has worked with Tamil Nadu government to
develop a wind forecasting model to forecast
on a day-in-advance and intra-day basis,”
Kapoor conirmed.
MNRE NEWS
Piyush Goyal sets
Rs 3 per unit as
benchmark price
for power
T he government is looking at Rs 3
per unit as the benchmark price for
power from all both conventional and non-
conventional sources in the medium term,
conirms Piyush Goyal said at the annual
session of the Confederation of Indian
Industry (CII).
Goyal said that policy reforms and
resource mobilisation has revived 100GW
of stranded and stressed assets. Power
demand has increased by 6.5 percent last
iscal. he DDU Gram Jyoti Yojana has
reached 75 per cent target to generate
electricity 18452 villages.
Energy security
key to eliminate
poverty in Africa:
Piyush Goyal
P ower minister Piyush Goyal recently
launched the third ‘Scaling Up
Minigrids and Microgrids’ programme,
under International Solar Alliance (ISA)
at the ongoing annual meetings of African
Development Bank in Gandhinagar.
He encouraged African nations
to participate more actively in the
international solar alliance and gain
from the partnership of solar energy rich
countries as Africa is rich in solar energy.
Arun Jaitley-led inance ministry has
inalized extending a $10 billion line of
credit at the Indian African summit.
June 2017 | Energy Next | 63
 IREDA CORNER
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IREDA to issue green masala bond
I
REDA will soon be launching
its USD 300 mn green masala
offshore bonds issue under the
Euro Medium Term Notes (EMTN)
Director
(Finance)
attended
Vienna Energy
Forum
D irector (Finance) S K Bhargava,
visited Vienna as a part of FICCI
delegation led by Power Minister Piyush
Goyal to participate in the Vienna Energy
Forum during May 10-11, 2017. The
program aimed at providing a platform
for discussing and highlighting the
importance of the linkages between
climate and development as well as
synergies among the SDGs. The forum
tried to explore the role of innovation in
opening up new avenues for achieving
64 | Energy Next | June 2017
programme under which the Bonds
(which will be denominated in Indian
Rupees) will be listed/drawn down on
Singapore (SGX) and/or London (LSE).
SDG 7 ‘ensure access to affordable,
reliable, sustainable and modern energy
for all’ and related SDGs.
The minister also interacted during the
Investors’ Meet attracting investors from
Austria to set up manufacturing facility
The offering circular for the EMTN
Programme has been filed by on the
SGX-ST/LSE (International Securities
Market) in May, and the Issue is
expected to be successfully completed
by the end of June, depending upon the
market conditions. This will be the first
overseas bonds issue by IREDA.
IREDA currently holds international
credit rating from two international
credit rating agencies, viz., Moody’s
and Fitch Ratings which are ‘Baa3’
and ‘BBB’ respectively, and equivalent
to the sovereign rating of India. The
Bonds Issue have received the green
bonds certification from the London-
based Climate Bonds Initiative which
ensures that the use of proceeds
would be in accordance with IREDA’s
Green Bonds framework, and thereby,
further enhances the Issue’s credibility
in the eyes of the global investors’
community. The Issue is expected to
be over-subscribed given the high
degree of interest globally in the Indian
Renewable Energy Sector and IREDA’s
dominant position therein.
in India and use their innovation and
ideas in the platform set by Make-in-India
Program of the government to achieve
benefits of scale of operations. This
Investors’ meet was participated by several
representatives of various industries.
 IREDA CORNER

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Cabinet approves raising of bonds of Rs. 2360

crores for RE

T
he Union Cabinet chaired by the
Prime Minister Shri Narendra
Modi has given its approval to
Raising of Bonds of Rs. 2360 crores for
Renewable Energy.
The Bonds will be raised by the Ministry
of New & Renewable Energy (MNRE)
through the Indian Renewable Energy
Development Agency (IREDA) during
the 2017-18. These funds will be used
by MNRE in the approved programmes/
schemes for solar park, green energy
corridor, generation-based incentives for
wind projects, CPSU and defence solar
projects, viability gap funding for solar
projects, roof-top solar, off-grid/grid-
distributed and decentralized renewable
power, investment in corporations and would result in generation of additional to IREDA to raise “GOI fully serviced
autonomous bodies etc. Such timely employment. taxable Bonds” on behalf of the MNRE
investment would boost infrastructure in The Government had declared during the FY 2016-17. Out of this
renewable sector and facilitate achievement additional finance mobilization of Rs. allocation, IREDA had raised Rs. 1640
of ambitious targets for the renewable 31,300 crore bonds through NHAI, PFC, crores as per the requirement of MNRE.
energy sector. The resources raised REC, IREDA and IWAI in the budget The MNRE subsequently approached the
would be used for developing additional for FYT 2016-17. As a part of this, the Cabinet, to approve raising of the balance
capacity in renewable energy sector which Government had allocated Rs. 4000 crores Rs. 2360 crores in the year 2016-17.

IREDA showcases
achievements at
events

I
REDA had the opportunity to showcase its
achievements, activities and contribution
in the ield of renewable energy in four
exhibitions during in the month of May. Prime
Minister Narendra Modi, Chief Minister of
Gujarat Vijay Rupani and Recado Andrews,
Minister Counsellor (Economic), South Africa
visited the IREDA pavilion to be a part of
the event – ‘Opportunities and Technologies
for Collaboration’ exhibition held at Gandhi
Nagar Gujarat. he event was held from May
22 to 26, 2017. IREDA showcased its CSR activates in the ‘POWER-GEN INDIAN & CENTRAL ASIA
In addition to this IREDA also participated ‘CSR Fair 2017’. he event was held at Pragati 2017’ held on May 17 to 19, 2017 at Pragati
in ‘Bundelkhand Srajan 2017’ held on May 6 Maidan, New Delhi from May 4 to 6, 2017. Maidan, New Delhi.
and 7 at Tikamgarh, Madhya Pradesh. Chief Shri Anant Geete, Union Minister of Heavy A huge number of people who participated
Minister of Madhya Pradesh Shri Shivraj Industries & Public Enterprises inaugurated in these events visited the IREDA pavilion
Singh Chouhan inaugurated the exhibition. the CSR Fair. IREDA also participated in during these exhibitions.

June 2017 | Energy Next | 65

 EVENTS

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Jun Solar Power Texas
13-14
Texas is one of the hottest new
markets in solar, and Solar
Power Texas, is an opportunity
to get in at the ground level.
Sheraton Austin Hotel he event provides an intimate
at the Capitol, atmosphere to learn about the
Austin, TX biggest challenges impacting
Texas market and start making
powerful connections.
Jun National
17-19 Advanced Biofuels
Conference &
Expo
Produced by BBI
International, this national
Minneapolis, MN, event will feature the world
United States of advanced biofuels and bio-
based chemicals—technology
scale-up, project inance,
policy, national markets and
more—with a core focus on
the industrial, petroleum
and agribusiness alliances
deining the national
advanced biofuels industry.
Jun INDIA SOLAR
21-22 WEEk ANNUAL
EVENT
he conference program brings
together technology leaders,
project developers, industry
advisories, inancial experts,
Holiday Inn, government representatives,
Aerocity, New Delhi policy makers and
entrepreneurs to debate the key
challenges and opportunities
in construction, engineering,
technology and commercial
space.

www.sepapower.org advancedbiofuelsconference.com solarquarter.com

Oct Jun Jun

Jun
Solar PV
21 ModuleTech India
2017
This event will discuss
various market trends,
drivers, and challenges
with respect to the global
Holiday Inn New photovoltaics market and
Delhi International its impact on India. The
Airport event will also focus on
forecasts the market till
2020, based on components,
types, applications, and
geography.
NREC SUMMIT
23-25 2017
NREC Summit will see
participation of governments
oicials, national and
international organizations;
Bengaluru, India global RE consultants;
solution providers, research
scholars and subject matter
experts. he Summit will be
solutions oriented, address
concerns of the relevant
parties.
hydroVision
27-30 International
HydroVision International
highlights perspectives on
the role of hydropower,
explores issues afecting
Colorado hydro resources, and helps
Convention Centre, participants develop a vision to
Denver, Colorado meet challenges and ensure the
USA future sustainability of hydro.
Hundreds of professionals,
3000+ attendees, 320+
exhibiting companies will
participate from around the
world

solarquarter.com solarquarter.com www.hydroevent.com

Jul Jul
International Renewable International
11-13 Energy and Environment 17-20 Conference on Energy
Conference and Environment
he conference, organized by science
Research
JULY 2017

he event will focus on state-of-art

conferences international will cover
technologies pertaining to Energy and
areas like energy from biomass;
Hotel Royal, Kuala Environment Research and applications
green energy technology; economic
Lumpur, Malaysia Porto, Portugal of Energy and Environment Research
modelling of energy technologies; role,
to domains like astronomy, biology,
potential and impact of renewable
education, geosciences, security and
energy and eicient use of alternative
healthcare. It is a technical congregation
systems, integrated or hybrid cleaner
where the latest theoretical and
renewable energy systems besides
technological advances will be presented
many other related topics.
and discussed.

warponline.org iceer@sciei.org

66 | Energy Next | June 2017