New & Renewable Energy

PRESENTATION By

Agenda – I

Energy Scenario Power Reforms RE Imperative RE Scenario RE Policy Enablers RE Targets RE Investments Attractiveness

Energy Scenario Power Capacity – 156 GW

Thermal - 100 GW Hydro - 37 GW Renewable - 15 GW

Per Capita Consumption – 730 units RE Share in Generation – 4% Energy Served Population – 60% Peak Deficit – 12% Energy Deficit – 11% AT&C Losses – 30%

Power Reforms Unbundling of utilities De-licensing in Generation & Transmission Mega schemes - UMPP & UMTP Creation of National Grid Franchisee in Distribution Promoting merchant Power Focused approach for Rural Areas Promotion of Renewable Energy

Fiscal & Financial Incentives RPO Targets National Solar Mission

RE Imperative Enormous RE potential Promotes Energy Security Promotes Sustainable Growth Bridges demand-supply gap Reduced Losses as Generation near

consumption Provides lifeline energy (Heat, Light &

Power) to rural masses

Issues with RE Projects Remote Locations Infirm Power, difficult to schedule Limited Generation period, requires storage High Generation Cost due to

High up-front cost Low Capacity Factor

Under-utilization of transmission facilities Associated with Reactive Power First Generation Entrepreneurs Limited Public Sector Participation Lack of Trained Work-force

RE Policy Enablers Dedicated Ministry – MNRE Dedicated Financial Institution - IREDA Comprehensive Resource Assessment

Wind Atlas Solar Radiation Mapping Identification of Hydro sites

Enabling Legislations NAPCC Purchase Obligations Preferential Tariffs/ GBI/ RE Certificate Guaranteed off-take, Must-Run status

Fiscal & Financial Incentives Excise duty exemptions Income Tax Holiday Accelerated Depreciation Electricity Duty exemption Preferential Tariffs/ GBI/ RE Certificate Interest & Capital subsidies 100% FDI permitted Energy buy-back through long-term PPA Captive, 3rd Party Sale & Trading

NAPCC Snapshot – 8 Missions

Indian RE Scenario

Sector

Total Potential (in

GW)Harnessed

(in GW)

Wind 48 11

Small Hydro 15 2.6

Cogeneration 5 1.2

Biomass 17 0.8

Solar Unlimited 6Note: Grid connected capacity as on 31-Oct-2009

Investments in Indian REParameters 2007 2008 % Change

Total Investments USD 3.3 Bln USD 3.7 Bln 12%

SOURCE-WISE

VC & PE USD 133 Mln USD 493 Mln 280%

Foreign Exchanges USD 756 Mln -- --

Domestic Bourses USD 646 Mln USD 74 Mln (85%)

M&A USD 585 Mln USD 585 Mln --

SECTOR-WISE

Wind USD 2.2 Bln USD 2.6 Bln 17%

Solar USD 18 Mln USD 347 Mln 1800%

SHP USD 135 Mln USD 543 Mln 300%

Bio-Fuel USD 251 Mln USD 49 Mln (80%)

Asset Finance USD 2.5 Bln USD 3.2 Bln 25%

2012 RE Targets & InvestmentsSector Capacity*

(MW)USD Mln per MW

Investments USD Bln

Wind 6250 1.1 7

Solar** 1000 3 3

Small Hydro 860 1.4 1.2

Biomass 1380 1.00 1.3

TOTAL 9500 12.5

By 2012 25000

(*) After deducting for the commissioned capacity as on 31 Oct’09 from MNRE-RFD for Wind, SHP & Biomass

(**) Solar – JNNSM (Th-600 MW + PV-400 MW)

(^) Cost projections – Inline with CERC guidelines

ATTRACTIVE INVESTMENT DESTINATION

Indian Economy Fastest growing free market

democracy 4th largest economy GDP growth @ 8% Infrastructure

2nd largest Rail network 334 airports 12 major ports & 87 minor ports 400 Million telephone connections 5th largest power market

IT & Engineering Superpower

FDI in India 100% FDI allowed in power

Generation, Transmission & Distribution

Government has set up Foreign Investment Implementation Authority

One-stop service to foreign investors Obtaining necessary approvals Sorting operational problems

www.investinginindia.in

Source: IBM-PLI – Global Investment Locations Database, GILD

INDIA: Ideal DestinationBusiness

IndiaUSAUK

China

FinancialUSA

ChinaUK

India

MotorChinaUSA

IndiaPoland

ICTIndiaUSA

ChinaUK

ElectronicsChinaIndiaUSAUK

PharmaUSA

ChinaIndia

UK

US$ 35 Billion FDI in

2008-09

FDI in Indian Power Sector

Year

Power Sector

(US $ Mln)

RE Sector(US $

Mln)

2008-09 985 85

2007-08 968 43

2006-07 158 2

ABOUT IREDA

Agenda – II Introduction Operational Areas Financing Schemes Resource Base Performance Highlights International Partnerships Recognition

EvolutionINCEPTION Incorporated under the Companies Act on 11th

March, 1987 to promote, develop and extend financial assistance for Renewable Energy and Energy Efficiency/ Conservation Projects.

OBJECTIVE Extend financial support to Renewable Energy,

Energy Efficiency & Conservation projects

MOTTO Energy For Ever

Operational AreasSectors being financed: Wind Small & Medium Hydro Biomass Power & Cogeneration Solar Waste to Energy EE & Conservation Bio Fuels/ Alternate Fuels

Other Activities Intermediary for providing financing

facilities for various MNRE Schemes Implementing Agency for GBI scheme

Financing OfferingsSchemes

Project Financing Equipment Financing Financing Through Intermediaries

Terms Loan - 70% of Project Cost Interest -11.25% to 12.15%

(based on credit rating)

Repayment - Upto 13 Years New Initiatives

Securitization against future receivables Structured repayment Loan syndication under Consortium Non-recourse financing

Outreach

Registered & Head office – New Delhi Branch Offices – Chennai & Hyderabad Camp Offices – Kolkata & Ahmedabad Business Development Associates – 50 Nos MoU with PFC, PTC, IIFCL for joint financing Conducts Business Meets, Seminars,

workshops Publishes IREDA News & Bulletin on EE

Cumulative Performance No of Projects Sanctioned :1892 Total Loan Sanctions :Rs.10,356 Cr Loan Disbursements :Rs. 5,754 Cr Sanctioned Power Capacity :3616 MW Commissioned Capacity :1902 MW Conventional Fuel Replacement :13L MTCR/Yr

As on 31/03/2009

India’ RE PortfolioIREDA’ Share

As on 31/03/2009

SectorTotalMW

IREDAMW % Share

Bio-Power 703.0 224.8 32.0%

Wind 10242.0 907.9 8.9%

SHP 2428.8 300.0 12.4%

Co-Gen 1049.0 494.6 47.1%

W2E 59.0 24.7 41.8%

Solar 2.9 NIL NIL

TOTAL 14484.7 1951.9 13.5%

Highlights Unique FI Dedicated for RE Financing Specialized knowledge of RE & EE High Brand Equity Catalyzed market development

leading to commercialization of RE Assisting in policy formulation Profit earning & dividend paying ISO 9001:2000 Certified Company Highest share in RE Financing - 13.5%

International PartnershipsLines of Credit Availed Govt of Netherlands, 1991 :18 Million Dutch

Guilders World Bank (1st LoC), 1993 :$ 145 Million DANIDA, 1993 :$ 15 Million Asian Development Bank, 1997 :$ 100 Million KfW, Germany (1st LoC), 1999 :€ 61 Million World Bank (2nd LoC), 2001 :$ 110 Million KfW, Germany(2nd LoC), 2008 :€ 50 Million KfW, Germany (3rd LoC) :€ 19.9 Million

Lines of Credit in Pipeline AFD (France) :€ 70 Million JICA (Japan) :$ 100 Million

Lender’s Perceptions

ADB - IREDA has satisfactorily performed the operational and institutional responsibilities in accordance with the diverse objectives for which it was created.

World Bank - IREDA is well motivated, active and has strong interest in incorporating environmental costs and benefits into economic analysis.

KFW - despite its fairly young age, IREDA is an able and competent financial institution and has retained its financial strength through years of very rapid growth and in sectors with considerable technological and financial risks.

Recognition Second Prize in Water

Globe Award Category of the Energy Award 2002 presented at Linz, Austria.

World Climate Technology Award for the year 1999 by Climate Technology Initiative (CTI), France.

THANK YOU