“financing for renewable energy” A Presentation by: Debjani Bhatia Asst. General Manager Indian Renewable Energy Development Agency Limited New Delhi (India) TLA International Energy Conference , 15 th April , 2016
Present Power Scenario of India Installed RE Capacity as on 14 Jan 2016 (MW) 127 50000 39171 4550 4177 40000 5129 25188 30000 20000 10000 0 Wind Solar Small Hydro Biomass Waste to Total Energy Nuclear Diesel RE Gas Overview Hydro 2.07% 0.36% [PERCENTAGE 8.36% • India’s installed capacity is 284 15.04% ] GW (As on December 2015). • India’s RE capacity has exceeded Wind 39 GW (as on Jan 2016) which 8.98% accounts for 13.95% of the installed power capacity SHP • Current share of renewable 1.48% energy (in energy produced ) is Biomass Coal Waste to energy ~ 7% 1.59% 60.23% 0.05% • Wind contributes to 64.5% of the Solar 1.84% installed Renewable Capacity Current Status, Outlook & Investment Opportunities in RE Sector • MNRE February 2016 3 *Source: MNRE, GoI ; CEA Statistics
RE in India: Status and Revised targets 39171 MW 45000 Source wise renewable capacity ( FY 07-16) 40000 WtE 35000 30000 MW Solar Power 25000 20000 15000 Biomass power 10000 9389MW 5000 Co Gen 164.1 0 bagasse 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Small Hydro (Till Jan) Wind Power Capacities in MW Source Installed capacity Current installed Target as per 12th Revised Targets by end of 11 th Plan Capacity Plan till 2022 (March 2012) (Jan 2016) (March 2017) Solar Power 941 5130 10,941 1,00,000 Wind power 17,352 25188 32,352 60,000 Biomass Power 3,225 4550 6,125 10,000 Small Hydro 3,395 4177 5,495 5,000 Current Status, Outlook & Investment Opportunities in RE Sector • MNRE February 2016 TOTAL 24,914 39171 54,914 1,75,000 4
Wind energy across states Wind Resource Wind 25,188 MW (Jan 2016) 3878 MW 3877 1200 MW MW 4638 MW 115 2887 5 MW MW 7515 35 MW MW India has potential of over 302 GW Current Status, Outlook & Investment Opportunities in RE Sector • MNRE February 2016 (at 100 meter above ground level)* 9 *Source: NIWE
Solar Energy across states Solar Resource Solar: 5,130 MW (January 2016) 12 200 MW MW 0.3 13 MW MW 140 1264 10 MW MW MW 16 1024 679 12 5 MW MW MW 73 MW MW MW 67 379 MW MW 342 MW 357 104 MW MW 12 419 MW MW India has potential for 748 GW Current Status, Outlook & Investment Opportunities in RE Sector • MNRE February 2016 (considering deployment on 3% of wastelands) 10
Fis iscal al a and d Fin inan ancia ial l Incentiv ives fo for RE P Proje jects i in I Indi dia a.State level renewable and solar policies State RE policies b.Significant capacities under state policies a. Expected to increase in coming 2-3 years due to lack of present Demand & Supply gap investments in power sector a. 100% exemption in Excise Duty for many RE project components. Exemptions and other b. Concessional Customs Duty of 5% for selected RE project components incentives c. 10 year tax holiday a. RPOs are mandated by the Electricity Act 2003 and NTP RPOs & RECs b. RPOs adopted by 26 SERCs c. REC mechanism launched to fulfil the RPO obligations Accelerated Depreciation a. Key instrument for success of wind in India (AD) and Generation based incentive a. Preferred by developers because it enhances project bankability. Feed in Tariffs/ Preferential b. Introduced by almost all states for RE technologies Tariffs
Fi Fina nanc ncin ing g Req equi uire reme ment nts 175 GW RE plan entails investment of Approx. $ 130 billion (Rs. 8,50,000 Crore) • Multilateral and Debt (70%) Equity (30%) Bilateral • NBFCs $ 39 Billion (Rs. 2,50,000 • Commercial $ 92 Billion (Rs. 6,00,000 Crore) Crore) banks Annual investment in RE (Rs. Crore) 120000 128000 136000 143000 149000 160000 SHP and 140000 Biomass 120000 Investment 102000 Rs. Crore (Rs. Crore) 100000 Wind 80000 Investment 58000 (Rs. Crore) 60000 40000 Solar 18000 20000 Investment (Rs. Crore) 0 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 Renewable Energy Scale up pl an • MNRE 19 (p) (p) (p) (p) (p) (p) (p)
Renewable Investment globally vis-à-vis India Investment in Europe decline and stay constant in US, Asia & South America witness highest growth Clean energy investment globally ($ Billion) 400 318 318 295 273 268 300 206 205 175 200 128 88 60 100 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 India 5 th largest by RE investment in 2015 ($ Billion) 150 110.5 100 56 43.6 23.4 50 10.9 10.6 7.5 4.5 0 February 2016
Proposed Dedicated Renewable Energy Fund For India Govt. of India (through IREDA) proposes to set up USD 1 to 1.5 bn fund for renewable energy Fund is to be setup in line with National Infrastructure Investment Fund (NIIF) structure Govt. owned entities such as PFC, REC, NTPC and IREDA have in principle agreed to invest USD 315 million into the fund as Anchor Investors Fund will be managed by a reputed international fund manager whose selection is being undertaken through an ICB process Received prima facie interest from various large fund managers to act as Investment Managers (GP) for proposed fund. Structure of the fund To be setup as a ‘Category I’ Alternative Investment Fund (AIF) under SEBI Independent trustee company will be (Alternative Investment Funds) trustee. Regulations, 2012. Anchor Investors and Other Investors LPAC would not be decision making body would be LPs in the fund and would and all investment decisions would be have role on Limited Partner Advisory made by Investment Manager. Committee (LPAC). February 2016 1
Tax Free Bonds for Renewable Energy Tax free bonds of INR 5,000 crores have been allocated to four institutions S. No. Name of the Institution Amount allocated (INR Crores) 1 IREDA 2000 2 NTPC 1000 3 REC 1000 4 PFC 1000 IREDA Tax Free Bonds: • IREDA’s Tax free Bond Public Issue of Rs.1716 Crore was oversubscribed by 3 times on the day of opening. • The average cost of Tax free Bond of Rs.2000 Crore is 7.50% . • IREDA’s Tax free Bonds were rated as AA+ by ICRA and India Rating Research Pvt Ltd. On stand alone basis. • Entire Tax free Bond proceeds will be utilized for on lending to RE & EEC Projects. February 2016
RE-INVEST 2015 and one year later • 462 investors submitted “Green Energy Commitment” to develop 287 GW • 39 Banks and Financial Institutions have given commitments to finance projects aggregating to 78 GW MNRE Target Commitments made during & after RE-Invest 175 GW 287 GW $140 Billion $ 57 billion to support approx. 78GW • New RE projects aggregating more than 3 GW commissioned & about 29 GW under various stages of implementation against GEC commitments made by developers. • Projects worth $ 8.28 Billion sanctioned and $ 2.82 Billion disbursed by banks / FIs who have made GEC commitments for financing. February 2016
Ren enew ewab able le Ene nerg rgy y Rev evol olut utio ion n in in Ind ndia ia & & Est stab abli lish shme ment nt of of IREDA To provide Renewable Energy Technologies beyond the stage of Research, Development & Demonstration to Commercialization. To optimize utilization of India’s vast potential for energy generation from Renewables To integrate renewable energy into the National Energy planning for a balanced energy mix To create exclusive institutional framework for financing RE projects To operate innovative financing schemes To alleviate the severe power crunch faced by the country. It was this effect, the Government set up Indian Renewable Energy Development Agency in 1987
Abou out t IREDA Dedicated FI for Renewable Financing Inception Incorporated under the Companies Act on 11th March, 1987 to promote, develop and extend financial assistance for Renewable Energy and Energy Efficiency/ Conservation Projects. Mission Be a pioneering, participant friendly and competitive institution for financing and promoting self-sustaining investment in energy generation from renewable sources, energy efficiency and environment technologies for sustainable development. MOTTO Energy For Ever
Abou out t IREDA Dedicated FI for RE Financing with over 28 years of experience. Track record of financing more than 2200 projects. Profit earning & dividend paying. Largest share in RE Project Financing in India Catalyzed Market Development
Op Oper erat atio iona nal l Are reas as Sectors financed Wind Energy Hydro Power Solar Energy Biomass including Bagasse & Industrial Cogeneration Biomass Power Generation Waste to Energy Energy Efficiency & Energy Conservation Bio-fuel / Alternate Fuel Hybrid Projects with RE Technologies New & Emerging Renewable Energy Technologies
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