Berlin, February 26 2013
Sanjoy Sanyal, New Ventures India
POLICIES SUPPORTING MICROFINANCING OF DECENTRALIZED ENERGY SYSTEMS IN INDIA
THE SUMMARY UPFRONT
• In India, impact investors has been an important source of fund for companies supplying decentralized energy systems.
• Debt funding/end user consumer funding has been our weak area
• The key challenges we face are:
• How to scale end user funding /consumer debt funding?
• Leverage innovations like crowd funding?
NEW VENTURES INDIA
• Started in 2006
• Current Partner : Regain Paradise Research Consulting
• Facilitated USD 43 million in investments
PORTFOLIO FUNDING: SOURCES
31%
30%
24%
12%
Investment
VC/PECorporateImpact Investors Banks Donors Angels
35.77
7.4
Investments
Financial Investment
Non fin-ancial
USD 43.17 in 22 companies
PORTFOLIO FUNDING: EXAMPLES
Husk Power Systems biomass gasification based rural micro grid company (Acumen, LGT et al)
Greenlight Planet solar personal products company (Bamboo Finance)
Sustaintech : a commercial cookstove ompany (Rianta Capital)
Vayugrid: local biofuels company (Mahindra)
Mera Gaon Power : solar based rural micro grid company (Insitor )
CAPITAL SUBSIDY CUM REFINANCE SCHEME
• This is the key policy in place from November 2010
Administered by NABARD
Part of the JNNSM
• Routing of capital subsidy and interest subsidy to end customers
ROLE PLAYED BY GRAMEEN BANKS
• Regional Rural Banks have provided solar lending
• In partnership with companies such as SELCO, Tata BP Solar and Solid Solar
• Gurgaon Grameen Bank: 10 068 SHSs (by 2012)
• Prathama Bank : 41,058 SHSs
• Aryabhatta Grameen Bank (??)
• The UNEP solar programme helped finance 18,000 households from 2003 to 2007 in South India with partnerships with banks
THE NATURE OF INDIA’S CHALLENGE
• Only 7 of the 70 districts have rural un-electrification rates less than 50%
• 32 of the 70 districts have rural un-electrification rates greater than 80%
• 7 of the 70 districts have rural un-electrification rates greater than 90%
Source: NVI Analysis based on Census data
UTTAR PRADESH
THE NATURE OF INDIA’S CHALLENGE
• None of the 37 districts have rural un-electrification rates less than 50%
• 33 of the 37 districts have rural un-electrification rates greater than 80%
• 19 of the 37 districts have rural un-electrification rates greater than 90%
Source: NVI Analysis based on Census data
BIHAR
AND EVEN IN URBAN SETTINGS
Of the 15 commercial buildings that we surveyed in Chennai regional area only 6 had outage less than 2 hours a day
Of the 5 commercial buildings that we surveyed in Madurai only 1 had outage less than 2 hours a day
Source: NVI Survey in commercial buildings of South Indian cities
BANGLADESH IDCOL SHS PROGRAM
• IDCOL is a Non Banking Financial Institution in Bangladesh
• The SHS Program was started in 2003 with assistance of IDA, GEF under the Rural Electrification and Renewable Energy Development Project (REREDP) of The World Bank.
• Initial target:: 50,000 Solar Home Systems (SHSs) achieved in August 2005, 3 years ahead of schedule and US$ 2 million below the estimated cost.
• Next phase had support from IDA, GTZ, KfW, ADB and IDB.
• IDCOL’s current target is 2.5 million SHS by 2014.
• In April 2012 installation size was 1.4 million SHS
Source: IDCOL Website
KEY FEATURES OF THE IDCOL PROGRAM
• Implemented through Partner Organizations who:
• select areas and customers and install SHS
• extend micro-credit to customers
• provide after sales services
• Currently IDCOL has 46 partner organizations
Source: IDCOL Website
CROWD FUNDING?
Achieved so far•Won an (50%) ANDE grant to develop a crowd-funding platform for impact investments
Goal • Develop a product that can be deployed globally thru partners
