Contents

NAPCC & NMEEE

Energy Efficiency Market in India

Objectives of PRGFEE

Institutional Structure & Features of the Guarantee

Sectors in the Mandate of PRGFEE

Eligibility of a Project

PRGFEE application process and document of OM

Benefits to ESCO & PFI

Important contacts
2
National Action Plan on Climate Change
National
Mission for
Strategic
Knowledge
on Climate
National Mission National
Change
for Sustainable Solar
Habitat Mission

National

NAPCC
National
Mission for
Mission for
Enhanced
Sustainable
Energy
Agriculture
Efficiency

National
National
Mission for
Water
a Green National Mission
India Mission for
Sustaining the
Himalayan
Eco system

3
National Mission for Enhanced Energy Efficiency
The National Mission on Enhanced Energy Efficiency (NMEEE) is a key component of the NAPCC. Its key initiatives
include:

 Perform, Achieve and Trade (PAT): A market based mechanism to enhance cost effectiveness of improvements in
energy efficiency in energy intensive large industries through certification of energy saving that could be traded.

 Market Transformation for Energy Efficiency (MTEE): Innovative measures to accelerate the shift to energy
efficient appliances in designated sectors and make the products more affordable.

 Energy Efficiency Financing Platform (EEFP): A mechanism to finance DSM programmes in all sectors by capturing
future energy saving.

 Framework for Energy Efficiency Economic Development (FEEED): Fiscal instruments, such as the Partial Risk
Guarantee Fund for Energy Efficiency (PRGFEE), to promote energy efficiency.
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Energy Efficiency Market in India
 Estimated to be over 22.81 billion $ (Source : EESL’s Business Plan 2016-2021)

 Policy interventions and Support by Multilateral/Bilateral organizations resulted

emergence of domestic and international ESCOs

 Major constraints of ESCO

• Limited Access to Finance
• Limited Capacity in Public Sector
• Government Procurement Regulations
• Perceived Technology Bias
• Lack of Simplified M&V Protocols
• Payment Security Mechanism

Need of a Financial Instrument •

• Undertake Risk
Demonstrate Energy Efficiency ESCO models
Objectives of Partial Risk Guarantee Fund For Energy Efficiency (PRGFEE)

 The Partial Risk Guarantee Fund for Energy Efficiency (PRGFEE) is a risk sharing mechanism to provide
Participating Financial Institutions(PFIs) with a partial coverage of risk involved in extending loans for energy
efficiency projects and directly support financing of Energy Efficiency(EE) projects by:

 Addressing the credit risks and barriers to structuring the transactions

 Engaging FIs and building their capacity to finance EE projects on a commercially sustainable basis.

 PRGFEE to provide risk cover upto 50% of debt in an energy efficiency project.

 PRGFEE will act as a first-loss and subordinated recovery guarantee, to be placed in a guarantee reserve account
and paid out to empanelled participating Financial Institutions (“PFIs”) in the event of loss or default in energy
efficiency projects.

 PFI shall take guarantee from the PRGFEE before disbursement of loan to the borrower.

 The Govt. of India has approved around INR 312 crores for PRGFEE.

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Institutional Structure

Govt of Fund
OTHERS PRGFEE India BEE has appointed
Creation the
Consortium of
RECPDCL-REC-EESL
as the
Supervisory Bureau of Energy Efficiency (BEE) Fund Implementing
Committee Nodal Agency Management Agency for PRGFEE

Implementing
Agency
Lender Appointed By BEE
Projects
Verifer Borrower
Financial Appraisal &
M&V Agency Energy Service
Guarantee
Instituion(FIs) During Claims Empanelled Company(ESCO)
Empanelled by by BEE Empanelled by
BEE BEE

Loan Sanction & Disbursal

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Features of the Guarantee
 Guarantee Duration period : Maximum of 5 years per project.
 Maximum Guarantee coverage : Upto 50% of the sanctioned loan amount to a maximum of Rs.10 Crore per project, whichever is
less.
 In case of default, fund will:
 Cover the first loss subject to maximum of 10% of the guaranteed amount
 Cover the remaining default (outstanding principal) amount on pari-passu basis up to the maximum guaranteed amount.
 Financial Institutions to be empaneled with BEE to participate in PRGFEE .
 Projects implemented by BEE empaneled Energy Service Companies(ESCO's) or a JV of ESCOs
 Guarantee coverage to be provided before disbursement of loan by PFI to ESCO.
 Non-refundable Application fees to be borne by PFI : .1% of maximum guaranteed amount applied for plus GST if applicable at the
time of application
 One-time Guarantee Fee: 1% of the amount guaranteed for each project +applicable GST (In case the borrower is a female
entrepreneur, the Guarantee fee would be 0.50% plus applicable GST) payable after approval and before signing of Guarantee
Agreement. The guarantee fee is refundable without any interest implication only after successful completion of the guaranteed
project without any guarantee claim made by PFI

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Sectors in the Mandate of PRGFEE:

Private buildings having commercial

or multi-storied residential
Government accommodations
buildings

Small & Medium Enterprises

Municipalities

Industry
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Eligibility of a Project

 Seek to achieve demonstrable energy savings and mitigation in emissions of greenhouse gases;
 Propose a viable method to monitor and verify energy and greenhouse gas emission savings;
 Be a new project, not refinancing existing projects or any outstanding obligations of the Eligible
Borrower.
 Use viable technology and be developed with competent energy audit/feasibility studies;
 Project must be implemented by Bureau empanelled ESCO on performance contracting mode.
 Minimum 70% of the eligible loan amount should be towards the cost of the investments
required for implementation of the EE project
 Loan amount below Rs. 5 Lakh will not be considered under PRGFEE.
Implementation Rollout Strategy

Awareness & Implementing

Empanelment projects
• ESCOs • Existing EE projects
• FIs with ESCOs
• Buzz about fund • Facilitating
• Facility Owners • New EE projects collaboration
• Empanelment with
implementing agencies between
stakeholders
• Funding via loans
Stakeholder Identifying
mapping projects
Roles of ESCOs and PFIs
ESCO
 Develop detailed project report for EE projects
 Sign an agreement with client for implementation of the EE project
 Apply for loan to financial institution

PFI
 Technical and Financial evaluation of DPR
 Due diligence and Risk assessment of ESCO
 Apply for guarantee (prior to disbursement of payment)

PRGFEE
 Review of application
 Technical and financial evaluation of DPR
 Approval of Supervisory Committee
 Signing of agreement
PRGFEE Application Process
Step 2: Submits PRGFEE
Step 1: Submits loan application along with
application Application Fee to IA
BEE Empanelled Participating
IMPLEMENTING
ESCO Financial
AGENCY
Institution
Step 4: Loan Step 3: IA execute Guarantee
disbursement by PFI Agreement duly supported
to ESCO by Bank Guarantee issued by
Designee Bank

Designee Bank
engaged by IA
Highlights of Guarantee Sanction process:
 In-principle approval of EE Project by PFI before applying for PRGFEE.
 Signing of Guarantee Agreement within 10 working days of receiving of proposal complete in all respect.
 The Guarantee Agreement will be signed only after PFI signs the Loan agreement with ESCO.
PRGFEE Application Process

After submission of
Guarantee Fee, PFI and IA ESCO Signs with PFI for
Submission of Loan
execute Guarantee establishment of
Application by ESCO to PFI
Agreement duly TRA/ESCROW
supported by BG **

Communication to PFI for

approval/ rejection of
Scrutiny, analysis and PRGFEE Guarantee Submission of quarterly
viability of project by PFI MIS report by PFI to IA
(Within 10-20 working
days)

Submission of Application Monitoring of

Approval of Loan Proposal
form for PRGFEE along TRA/ESCROW for every EE
by PFI
with application fee to IA Loan account by PFI
Empanelment Process of PFIs

Financial Institution (Banks/NBFCs) submits application to BEE for empanelment

(With application form and fee)

BEE will forward the application to IA

(Within 5 working days)

IA will scrutinize the application and recommend to BEE for empanelment

(within 10 working days from receipt of application from BEE)

BEE will take necessary approval and sign MoU with the Bank/NBFC

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Documents of PRGFEE operational Manual

Economic
Annual
Application Technical & Evaluation & Monitoring & Energy Saving Guarantee
Evaluation Bank Performance
form for Financial Sensitivity Evaluation Performance Agreement Other
Methodology Guarantee – Report by
PRGFEE – Model – Analysis Plan – Contract – (IA & PFIs) – Documents
- Appendix 3 Appendix 7 (i) PFIs –
Appendix 1 Appendix 2 Model – Appendix 5 Appendix 6 Appendix 7
Appendix 8
Appendix 4
Sample Documents

Appendix -1 Appendix -2
Sample Documents

Appendix -3 Appendix -4
Sample Documents

Appendix -5 Appendix -6
Sample Documents

Appendix -7 Appendix -8
Benefits to ESCOs
 Ease of financing for implementation of EE projects.

 Opportunity to take up a bigger size EE Projects.

 A common platform to approach PFIs for EE projects financing.

 Combined effort can sensitize utility owners on EE implementation, thus generating more business.
Benefits for PFIs

 Partial risk coverage for EE Loans.

 Only empaneled ESCOs, reassures competence of ESCO.

 Projects appraised by experts from energy efficiency, legal, risk advisory and financial field.

 Standardized evaluation process and structured transaction.

 Coverage of complete first loss subject to maximum of 10% guaranteed amount.

 Build confidence in tapping a huge potential in EE sector.

 Contributing towards climate change mitigation.

BEE empaneled PFIs :
 Tata Cleantech Capital

Mr. Neeraj Aggarwal, Email id: neeraj.agrawal@tatacapital.com , 8826544522

 Yes Bank

Mr.Himanshu Shekhar, Email id: himanshu.shekhar@yesbank.in, 8527336663

 IDFC

Mr. Palash Srivastava, Email id: palash.Srivastava@idfcbank.com, 99100 71778

 South Indian Bank

Mr. N Venkateswara Rao, Email id: ifd@andhrabank.co.in, 040-23233294/2325 2356

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Contact @ :
BEE
Ms. Vineeta Kanwal/Ms. Richa Mishra,
Email ID – vkanwal@beenet.in/richa.mish@beenet.in
RECPDCL
Mr. R P Vaishnaw/Mr. Rishiraj Mallik/ Mr. Mukund Kumar
Email ID –
rpvaishnaw@recpdcl.in/rishiraj.mallik@recpdcl.com/mukund.Kumar@recpdcl.com
EESL
Mr. Girja Shankar/ Mr. Ashish Jindal
Email ID – gshankar@eesl.co.in/ajindal@eesl.co.in
Proposed Plan for Demand Aggregation of PRGFEE Scheme
Workshops etc.
EESL Suppliers
Direct Communication (E-mail etc.)
Demand Aggregation and filtration of best
SPVs project for PRGFEE Scheme

Inventory & Demand Aggregation

ESCO

Loan to ESCO

BEE Procurement of ESCO Services

Empaneled Implementation of EE Measures
FIs
End Users
Repayment to ESCO in EMI Mode
National Motor Replacement Program
Pricing

S.No. Rating (kW)

Typical Market EESL Price CG
Price/ Motor (Rs) /Motor (Rs.)
1 1.1 7625
2 1.5 8388 ABB
3 2.2 11002
4 3.7 14051
5 5.5 19584 Siemens
6 7.5 23018
7 11 47045 35-40% lower
8 15 49223
9 22 64688 39859 BBL
Building Energy Efficiency Program (BEEP)
Impact in Electricity Bill in Few Buildings after Implementation

Saving

12 % - 75%
 Creation of Project Pipeline by ESCOs
• Identify a list of high potential sectors and equipment with following attributes (tentative):
• Minimum process intervention
Sector – equipment
• Modular installation (several independent equipment in a facility) assessment
• high frequency of installation (many clients going for it)
• high replication potential
• Example, Plastic injection molding machine, stitching machine, etc.

Enlist feasible equipment,

After identification, a pre-approved EE equipment list will be prepared wherein capacity denominations, and
energy saving potential of each equipment will be mentioned on a suppliers

conservative/deemed estimate.

Register for the process of PRGFEE Financing mechanism elements

 First Loss: Illustration-1
A. Loan Amount Rs. 100 Lakh
B. Actual Disbursed Loan Amount Rs. 80 Lakh
C. PRGFEE Guarantee Limit (in percentage) 40% of B

D. PRGFEE Guarantee Limit (amount) Rs. 32 Lakh

E. Outstanding Loan Amount at the time of declaration Rs. 3.2 Lakh
of NPA
F. Calculation of Claim Amount under PRGFEE 10% of D (First Loss)
Guarantee +
40% of NIL (Liability for the remaining outstanding amount
(i.e., E minus amount covered under First Loss above) to be
covered proportionately between PFI and PRGFEE. In this
case this amount will be NIL as no amount will be
outstanding after taking account First Loss above.)
= 3.2 + 0 Rs. 3.2 Lakh
 First Loss: Illustration-2
A. Loan Amount Rs. 100 Lakh
B. Actual Disbursed Loan Amount Rs. 80 Lakh
C. PRGFEE Guarantee Limit (in percentage) 30% of B
D. PRGFEE Guarantee Limit (amount) Rs. 24 Lakh
E. Outstanding Loan Amount at the time of Rs. 62 Lakh
declaration of NPA
F. Calculation of Claim Amount under PRGFEE 10% of D (First Loss)
Guarantee +
30% of 59.6 (Liability for the remaining outstanding amount
(i.e., E minus amount covered under First Loss above) to be
covered proportionately between PFI and PRGFEE. In this case
this amount will be NIL as no amount will be outstanding after
taking account First Loss above.)
= 2.4 + 17.88 = Rs. 20.28 Lakh
G. 75% of the Claim Amount to be settled within 60 75% of Rs. 20.28= Rs.15.21 Lakh (settled within 60 days of
days of receipt of the Guarantee Claim Form receipt of the Guarantee Claim Form)

H. 25% of the Claim Amount to be paid on 25% of Rs. 20.28= Rs.5.07 Lakh (paid on conclusion of
conclusion of recovery proceedings by the PFI recovery proceedings by the PFI and the same being credited
and the same being credited to PRGFEE on a to PRGFEE on a proportionate basis)
proportionate basis