Indian Renewable Energy Development Agency Ltd. April 26, 2010 1MNRE’s Solar Off-Grid Scheme May 6, 2010 1

Solar Off-Grid Scheme

Scheme of MNRE for Promotion of Solar Off-Grid (Photovoltaic & Thermal)

& Decentralised Applications

Under JNNSM

Indian Renewable Energy Development Agency Ltd. April 26, 2010 2MNRE’s Solar Off-Grid Scheme May 6, 2010 2

Objectives• To promote off-grid applications of solar energy (both SPV and Solar

Thermal) for meeting Phase-I targets of the National Solar Mission.

• To create awareness and demonstrate effective and innovative use of Solar systems for individual/ community/ institutional applications.

• To encourage innovation in addressing market needs and promoting sustainable business models.

• To provide support in flexible demand driven mode to channel partners and potential beneficiaries, within the framework of boundary conditions.

• To create a paradigm shift needed for commoditization of off-grid solar applications.

• To support consultancy services, seminars, symposia, training, awareness campaigns, human resource development, etc.

Indian Renewable Energy Development Agency Ltd. April 26, 2010 3MNRE’s Solar Off-Grid Scheme May 6, 2010 3

Scope• Off-Grid Solar PV

– Up to 100KWp per site

• Off-Grid & Decentralised Solar Thermal– As specified by Government from time to time

• Mini-Grids for Rural Electrification– Up to 250 KW

• To promote technology upgradation in SME– Projects involving improvement in technology / expansion in

production facilities/working capital loans

Indian Renewable Energy Development Agency Ltd. April 26, 2010 4MNRE’s Solar Off-Grid Scheme May 6, 2010 4

Financing pattern

20%* Promoters’ Contribution

30%* Capital Subsidy

50%* Interest Subsidy

100%* TOTAL

* Percentage of Project Cost

Indian Renewable Energy Development Agency Ltd. April 26, 2010 5MNRE’s Solar Off-Grid Scheme May 6, 2010 5

Channel Partners• Renewable Energy Service Provider Companies

(RESCOs)

• Financial Institutions (acting as Aggregators)

• Financial Integrators

• System Integrators

• Programme Administrators

Indian Renewable Energy Development Agency Ltd. April 26, 2010 6MNRE’s Solar Off-Grid Scheme May 6, 2010 6

Accreditation of Channel Partners

Rating by a Rating Agency may be considered for Accreditation of Channel Partners

MNRE

Channel partner(other than Bank /

FI)

Accreditation methodology by MNRESeeking Accredition

Grant of Accredition

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Approval of Project

• Formulation of Project by Channel Partner, within Boundary Conditions specified by MNRE

• Project Approval Committee to be set up by MNRE for screening & approving projects

• Only PAC approved projects to be eligible for Subsidies under the Scheme

Indian Renewable Energy Development Agency Ltd. April 26, 2010 8MNRE’s Solar Off-Grid Scheme May 6, 2010 8

Project Approval

Seeking Project Approval

MNRE

PAC

Channel partner(other than Bank / FI)

Grant ofProject Approval

Formulation of Project

within Boundary Conditions specified by MNRE

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Interest Subsidy

• IREDA to be the Nodal Point for providing Interest Subsidy

• MNRE to place funds for Interest Subsidy with IREDA

• IREDA to provide funds to scheduled commercial banks & NBFCs by way of refinance @ 2% p.a.

• Scheduled commercial banks & NBFCs to lend to borrowers @ 5% p.a. for PAC approved projects

Indian Renewable Energy Development Agency Ltd. April 26, 2010 10MNRE’s Solar Off-Grid Scheme May 6, 2010 10

Process Flow

Indian Renewable Energy Development Agency Ltd. April 26, 2010 11MNRE’s Solar Off-Grid Scheme May 6, 2010 11

Interest Subsidy: Refinancing Partners

Indian Renewable Energy Development Agency Ltd. April 26, 2010 12MNRE’s Solar Off-Grid Scheme May 6, 2010 12

Interest Subsidy: Refinancing partners IREDA shall provide funds received from MNRE

to refinancing institutions for loans granted by them

NABARDRRBs

Regional Rural Banks

NHBHFCs

Housing Finance Companies

SIDBISFCs

State Financial Corporations

Indian Renewable Energy Development Agency Ltd. April 26, 2010 13MNRE’s Solar Off-Grid Scheme May 6, 2010 13

Interest Subsidy

Indian Renewable Energy Development Agency Ltd. April 26, 2010 14MNRE’s Solar Off-Grid Scheme May 6, 2010 14

Capital Subsidy: Credit Linked

• IREDA to make available, up front, the funds received from MNRE, to primary lending institutions

• PLI to credit borrower’s account with the capital subsidy amount after confirming successful implementation of project

• PLI to provide Utilisation Certificate to IREDA

Indian Renewable Energy Development Agency Ltd. April 26, 2010 15MNRE’s Solar Off-Grid Scheme May 6, 2010 15

Capital Subsidy

Indian Renewable Energy Development Agency Ltd. April 26, 2010 16MNRE’s Solar Off-Grid Scheme May 6, 2010 16

Capital Subsidy: Non-Credit Linked

• MNRE to make available Capital Subsidy for PAC approved projects through State Nodal Agencies

Indian Renewable Energy Development Agency Ltd. April 26, 2010 17MNRE’s Solar Off-Grid Scheme May 6, 2010 17

Refinance

• Refinance Agreement between IREDA and Primary Lending Institution

• Refinance from IREDA @ 2% p.a.

• Primary lending institution to provide the loan @ 5% p.a. incorporating Interest Subsidy

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Refinance Scheme Features• Scale of refinance: 100% of amount financed

• Term of refinance: 5 years

• Security: Charge over book debts + collateral / guarantees as may be stipulated by IREDA.

• Repayment: Quarterly

• Minimum amount per claim: Rs.50 lakhs

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