energy and resource efficiency improvements, …...august 17, 2019 project overview and energy...

August 17, 2019

Project Overview and

Energy Conservation Opportunities in MSMEs

Energy and Resource Efficiency Improvements,

Cleaner Production and Lean Manufacturing in

MSME Units Through ESCO Contract

(Bengaluru City)

Enfragy Solutions India Pvt. Ltd. (A Wholly Owned Subsidiary of Idam Infrastructure Advisory Pvt. Ltd.)

Contents

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• IFC-EU Partnership for Eco Cities in India

• Services Offered by Enfragy to MSME Units

• Overview of MSME Units in India

• Potential MSME Sectors in Bengaluru

• ESCO, Their Offerings and Operation Models

• Partial Risk Guarantee Fund for Energy Efficiency

• Activities to be undertaken by Enfragy

• Way Forward


IFC-EU Partnership for Eco Cities in India

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• IFC is implementing “IFC-EU Partnership for Eco Cities in India”.

• SME component is one of three pillars of the program with objective to

facilitate sustainable energy finance to develop cities into eco-cities.

• IFC has identified potential SME clusters in five cities i.e. Greater

Mumbai, Chennai, Bengaluru, Bhubaneshwar and Pune.

• IFC and BEE are supporting FIs in improving their understanding of EE

Financing and leveraging the risk-sharing facilities setup by the BEE.

• IFC and BEE have collaborated to increase the pipeline of EE loan

applications for FIs of PRGFEE by facilitating audits in MSME units.

• In this regard, IFC has appointed Enfragy Solutions India Pvt Ltd

(Enfragy) as a Technical Firm & ESCO to work with PRGFEE’s Partner

FIs in preparation of IGDPRs for MSME units in Bengaluru City.


Services Offered by Enfragy to MSME Units

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• Creating awareness of MSME units and Identification of interested MSMEs

• Undertaking “Walk through Audit” of the MSME unit

• Financial assessment of the MSME unit

• Identification of eligible MSMEs under the project (Eligibility criteria: Minimum

Project Investment of 25 Lakh and 250 tCO2 emission reduction)

• Monthly energy bill (i.e. electricity, coal, gas etc.) of 10 to 12 lakhs and above

• Turnover of more than 8 crores

• Obtaining sign-off from the “Viable MSME units” for Investment Grade Audits.

• Preparation of 50 IGDPRs for MSME units considering EE, RE, LM and CP

measures

• Identification of ESCO for project implementation in MSME units

• Facilitate submission of loan documents to FIs

• Projects shall be monitored and reported to WBG/BEE over 3 to 6 months time.

All the Services shall be free of cost including the Energy Audits, ESCO identification and loan application


Overview of MSME Segment in India

• There are around 633.88 Lakh estimated non-agriculture MSMEs exist in India.Classification of MSME unit is as follows:

• Around 31% MSMEs are engaged in Manufacturing activities, while 36% inTrade and 33% in Other Services.

• MSMEs contribute to 28% of India’s GDP and provide employment to 117million people.

• Various studies reveal that energy cost accounts for 25% of total production costof MSMEs.

• Strong influence of the MSME sector on economy and high share energy cost inproduction cost reflects high potential of MSME segment to contribute towardslow carbon and more climate resilient Indian economy

• Karnataka houses around 38.34 Lakhs MSME units, whereas Bengaluru housesaround 1 Lakhs number of units

Classification of MSME Annual Turnover

Micro <= 5 Crore

Small > 5 Crore - 75 Crore

Medium > 75 Crore - 250 Crore

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EE Potential and Investment Requirement in MSME Segment

• Total energy consumption of MSME sector is 35 MTOE during FY 2018-19, this

include 5.25 MTOE of electrical energy and 29.76 MTOE of thermal energy.

• Based on various studies energy saving potential and investment requirement in

potential measures in MSME segment is presented below

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Sr. No.

TechnologyEnergy

Consumption (MTOE)

Saving Potential

(%)

Savings (MTOE)

Investment Requiremen

t (Million INR)

Cost Saving

(Million INR)

Replicable Potential

1 Waste Heat Recovery 1.1615 26% 0.3020 21,676 8,122 30%

2 Optimization of boiler and steam system

0.3952 21% 0.0830 557 471 30%

3 Efficient rewinding of motors 0.0850 4% 0.0034 624 864 50%

4 Fuel switch 5.1333 30% 1.5400 24087 10863 30%

5 Energy Efficient Lighting 0.0920 50% 0.0460 6966 3288 50%

6 Efficient Pumping Systems 0.0750 24% 0.0180 874 1277 40%

7 Improvement in Insulation 1.1933 30% 0.3580 10517 13991 30%

8 Use of VFDs for motor control 0.4906 53% 0.2600 6584 18,484 40%

9 Efficient compressors 0.1100 30% 0.0330 5376 2367 30%

8.7360 2.6434 77261 59727


Potential MSME Sectors in Bengaluru

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Based on preliminary understanding of energy intensity of MSMEs in

Bengaluru, following sectors have been selected:

❑ Commercial Building

❑ Machine Tools

❑ Auto Component

❑ Chemical Sector

❑ Injection Moulding

❑ Forging, Foundry & Casting

❑ Garment & Hosiery

❑ Drugs & Pharmaceuticals

❑ Corrugated box/Sheet


Potential EE and RE Measures

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Sr. No. EE & RE Measure

1 Installation of damper control mechanism in boiler

2 Fuel Switching of boiler and furnace

3 Replacement of Steam Distribution System

4 Replacement of existing non-IBR boiler with IBR boiler of larger capacity

5 Replacement of Refractory Material of Preheating Furnace in Rolling Mill

6 Replacement of the existing compressed air circuit with new circuit

7 Installation of energy efficient HVAC system

8 Installation of energy monitoring system for Load Management

9 Installation of energy efficient lighting system

10 Replacement of old compressors with new EE compressor

11 Installation of EE Transformer, Harmonics Filter and AVR

12 Installation of Energy Efficient Motors and Pumps

13 Installation of Automatic Power Factor Control System and Demand Controller

14 Installation of Computer Numerical Control Machines

15 Installation of Solar PV and Water Heating System at roof of building


ESCOs, Offerings and Operating Models (1/3)

Organisations that offer both technical

and financial services to implement

energy efficiency projects and guarantee

that the energy savings associated with

the project will be enough to cover the

costs of the project over a certain period

of time.

• Identification, development and

design of energy-efficiency projects;

• Financing, or acquiring the financing,

of the energy-efficiency project;

• Installation of energy-efficiency

technology/equipment; and

• Measurement, monitoring and

verification of energy savings.

What are ESCOs? What do they offer?

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Customer shares energy savings

(utility bill)

Agency Energy and O&M Bills

Cost Savings

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1. SHARING SAVINGS MODEL 2. GUARANTEED SAVINGS MODEL


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Partial Risk Guarantee Fund for Energy Efficiency

➢ Risk sharing mechanism to provide Participating Financial Institutions (PFIs)

with a partial coverage of risks involved in extending loans for 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 provides risk cover upto 50% of debt in an EE project.

➢ PRGFEE will act as a first-loss and subordinated recovery guarantee, to be placed in a

guarantee reserve account and paid out to empaneled participating Financial

Institutions (“PFIs”) in the event of loss or default in energy efficiency projects.

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

➢ PFI to obtain guarantee from PRGFEE before disbursement of loan to borrower

➢ 5 PFIs have been empanelled with BEE: Andhra Bank, IDFC Bank, IndusInd Bank,

Tata Cleantech Capital and Yes Bank

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PRGFEE: Institutional Structure

Fund Creation

PRGFEEGovt of India

OTHERS

Bureau of Energy Efficiency (BEE)Nodal Agency

Supervisory Committee

Fund Management

Implementing AgencyAppointed By BEE

Lender Financial

Instituion(FIs)Empanelledby

BEE

Verifer M&VAgency

Empanelled byBEE

Borrower Energy Service

Company(ESCO) Empanelled by BEE

Loan Sanction & Disbursal

Projects Appraisal& Guarantee

During Claims

Implementing

Agency Appointed

by BEE

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Loan Disbursement and Share of EE andRE Project Under PRGFEE

• Projects implemented by BEE empanelled ESCOs or a JV of ESCOs with

at least 50% share capital of BEE empanelled ESCO, only

• Deemed ESCO is also eligible for loan application under PRGFEE

• Loan amount of minimum INR 5 Lakh can be considered for guarantee

under PRGFEE.

• 70% of the eligible loan amount should be towards implementation of EE

project

• Project can be a joint project of RE and EE with 50% investments

required for EE Project

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Activities to Be Undertaken by Enfragy

Obtain willingness form

from MSME

Conduct walk through EA

Identify EE opportunity and submit MoU to viable MSMEs

Obtain MoU from Management of

MSME

Carry out IGEAPrepare IGDPR

Assistance on signing of ESP contract with

ESCO

Preparation of Loan Application to FIs on behalf of

ESCO

MSME Issues Implementation

Contract to ESCO

Loan Disbursement by

FIs

Implementing EE, LM and CP

Project by ESCO

Realization of Savings

To be done by ESCO and MSME

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Way Forward

• Interested and eligible MSME units are requested to register their

interest in the program by contacting with any one of the following:

• Enfragy Team would conduct walk through energy audit and detail

energy audit at MSME units and identify potential EE and RE measures.

Name Contact Details

Gagan Shrivastav(Idam Infra)

+919004532525/9136920640 [email protected]

Sonia Shukla(Idam Infra)

[email protected]

Antony Gerald(Enspar Energy)

[email protected]

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mailto:[email protected]






Thank You

Mumbai Delhi Kolkata Hyderabad

801, Crystal Plaza,158, CST Road,Kalina, Santacruz (E),Mumbai — 400 098Phone: +91 22 4057 0200

A-31, Second Floor,Lajpat Nagar II, Near Lajpat Metro Station,New Delhi — 110 024Phone: +91 11 4943 4000

Globsyn Crystal, XI – 11 & 12,1st Floor, Block – EP, Sector V, Salt Lake Electronics Complex, Kolkata — 700 091Phone: +91 33 4604 8993

House No. 3-51, Flat No. 201,Abhishek Towers,Balanagar,Hyderabad — 500 042Phone: +91 91369 20664

Contact:

Balawant Joshi (Managing Director) +91 98214 21630

Ajit Pandit (Director) +91 98211 08222

Email: [email protected]

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