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