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STRICTLY CONFIDENTIAL WELSPUN RENEWABLES ENERGY PVT. LTD. (WREPL) Welspun Renewables Energy Pvt. Ltd. Experience of Investing in and Operating PV Power Plants in India – Feb 2015

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Page 1: WELSPUN RENEWABLES ENERGY PVT. LTD. (WREPL) - The First Renewable ...2015.re-invest.in/presentations/02_Grid_Connected_Solar_Power/... · STRICTLY CONFIDENTIAL WELSPUN RENEWABLES

STRICTLY CONFIDENTIAL

WELSPUN RENEWABLES ENERGY PVT. LTD.

(WREPL)

Welspun Renewables Energy Pvt. Ltd.

Experience of Investing in and Operating PV Power Plants in India

– Feb 2015

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1

A

CONTENTS

STRICTLY CONFIDENTIAL PAGE 1

1

Experience of Investing in and Operating PV Power Plants in India

2 Select Issues & Recommendations

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STRICTLY CONFIDENTIAL PAGE 2

Experience of Investing in and Operating PV Power Plants in India

1

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PAGE 3STRICTLY CONFIDENTIAL

Welspun Renewables Energy Pvt. Ltd.

WELSPUN HAS AN EXCEPTIONAL HISTORICAL PERFORMANCE /

TRACK RECORD IN CLEAN ENERGY SPACE

WELSPUN RENEWABLES CURRENTLY HAS THE LARGEST OPERATIONAL SOLAR POWER

CAPACITY IN INDIA

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PAGE 4STRICTLY CONFIDENTIAL

Welspun Renewables Energy Pvt. Ltd.

OUR RENEWABLE PORTFOLIO HAS PAN-INDIA

SPREAD

PORTFOLIO SPREAD ACROSS MULTIPLE STATES : Diversified Risk

Source: Company

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PAGE 5STRICTLY CONFIDENTIAL

Welspun Renewables Energy Pvt. Ltd.

ALL OPERATIONAL PROJECTS PERFORMING BETTER

THAN PROJECTIONS

SUSTAINED OPERATIONAL EXCELLENCE – ACTUAL PLF (CUF) > DESIGN PLF (CUF)SUSTAINED OPERATIONAL EXCELLENCE – ACTUAL PLF (CUF) > DESIGN PLF (CUF)

Performance better than Projections (Projects with full year operations)

Source: Company

Source: Company

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Amongst the best performing projects in Gujarat*

WREPL Assets

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PAGE 6STRICTLY CONFIDENTIAL

Welspun Renewables Energy Pvt. Ltd.

WELL RECOGNIZED FOR INNOVATION, EXCELLENCE

AND LEADERSHIP

Solar Man of the Year

WREPL Vice Chairman Vineet Mittal has been conferred the 'Solar Man of The Year 2014' award.

Jury chairman: Deepak Gupta (Former Secretary, MNRE)

Golden Peacock for Innovative Service

Welspun was awarded Golden Peacock Award (innovative service) for Modified Module Mounting

Structure.

Outstanding Company in Power Generation (Renewable Energy)

Welspun was awarded ‘Outstanding Company in Power Generation (Renewable Energy)’ at 4th

EPC World Awards 2013. The award recognizes the company’s outstanding contribution towards

country’s energy security through its renewable projects across the country.

GLOBAL EXCELLENCE AWARD in RENEWABLE ENERGY 2013

The Energy and Environment Foundation, with the support of Ministry of New and Renewable

Energy (MNRE) and UNESCO awarded Mr. Mittal for his outstanding contribution and

demonstrating excellence in the Renewable Energy sector at the 4th World Renewable Energy

Technology Congress (WRETC)

July

2014

May

2014

Dec

2013

Oct

2013

Global Solar EPC Award

Welspun was awarded Global Solar EPC Award (innovative service) for excellence in solar project

development.

May

2014

IPPAI Power Award for Innovation

Welspun was given 2 awards for innovation by Independent Power Producer Association of India.

Innovative practices were improving output and operational efficiency.

Aug

2014

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PAGE 7STRICTLY CONFIDENTIAL

Welspun Renewables Energy Pvt. Ltd.EXCELLENT CREDIT RATING

‘A’ CATEGORY CREDIT RATING AS PER CARE RATINGS

Source: Company; CARE Ratings; * SO rating

First company in the clean energy space in India to be ISO 9001:2008

certified

ISO 9001:2008

CertificateSTABLE CREDIT HEALTH OF COMPANIES/ PROJECTS

Company/SPV/Project Latest Credit Rating

Welspun Energy Private Ltd. A+

Welspun Renewables Energy Private Ltd.* A+

Welspun Solar AP (Rajasthan 55 MW)* A+

NorthWest Energy (Rajasthan 5 MW) A-

Unity Power (Gujarat 5 MW) A-

Welspun Urja Gujarat (Gujarat 15 MW) A-

Indicates financial and operational health as well as reduced payment risk

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PAGE 8STRICTLY CONFIDENTIAL

Welspun Renewables Energy Pvt. Ltd.

� Central bank of india

� Union Bank Of India

� IIFCL

� Vijaya Bank

� L&T Infrastructure Finance Limited

� IDFC Limited

� EXIM Bank

� IndusInd Bank

� Yes Bank Limited

� State Bank of Bikaner and Jaipur

� State Bank of Patiala

� India Overseas Bank

� State Bank of Hyderabad

� Allahabad Bank

EXISTING RELATIONSHIP WITH LEADING BANKS AND

FINANCIAL INSTITUTIONS

ALSO…REPUTED INVESTORS HAVE

REPOSED FAITH

Raghuveer Kurada

(Business leader for India and South East Asia at GE Energy

Financial Services)

WREPL’s history of developing benchmark projects ahead of schedule and with high generation power output

helps us expand globally across the energy spectrum and meet the world's

energy needs

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PAGE 9STRICTLY CONFIDENTIAL

Welspun Renewables Energy Pvt. Ltd.

� Focus on value creation and corporate citizenship has helped the company build an

enviable corporate reputation founded on ethical and transparent approaches� Fairness to shareholders, customers, employees, fund providers, suppliers, regulators and the society as

a whole

� Business strategy developed using a ‘triple bottom-line’ approach

� Sustain “Profits- Planet – People” nexus and bring about low carbon transition in the energy sector

� Significant investments in CSR initiatives around Education, Empowerment and Health

STRONG CORPORATE GOVERNANCE

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PAGE 10STRICTLY CONFIDENTIAL

Welspun Renewables Energy Pvt. Ltd.ROBUST MANAGEMENT MODEL

Strong process and metrics based management based on EFQM (European Foundation for Quality management) framework help us to deliver predictable performance and mitigate risk

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Welspun Renewables Energy Pvt. Ltd.

Commissioning schedules of recent projects

Source: Company

STRONG PROJECT MANAGEMENT CAPABILITIES

Company has executed all projects with in the estimated costs - A few select cases

WREPL has never faced any

time/cost over run for any project

till date

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PAGE 12STRICTLY CONFIDENTIAL

Welspun Renewables Energy Pvt. Ltd.

Welspun commissioned the largest solar project in Asia

Source: Company

EXECUTED ONE OF THE LARGEST SOLAR PROJECT

IN THE WORLD

� Utility-scale151 MW (DC) solar project at Neemuch in Madhya Pradesh spread across 800 acres of barren terrain

� Project awarded by Madhya Pradesh Power Management Company (MPPMC), the highest capacity to be awarded to any Indian entity in solar space

� Financial closure of the project was one of the largest single deal in energy and infrastructure space

� Project Commissioned approximately 8 months ahead of schedule

� Currently feeding enough green energy into the state grid to power 624,000 households and mitigate 216,372 tonnes of carbon emissions annually

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PAGE 13STRICTLY CONFIDENTIAL

Welspun Renewables Energy Pvt. Ltd.

EPC is strategically done by Sponsor on arms length basis

EPC – CREATING VALUE ACROSS THE VALUE CHAIN

Engineering

Procurement

Construction

� Engineering Centre of Excellence - develops and focuses on value based engineering solutions

� Frugal engineering – re-engineering of complex processes in the most economical manner� Resulting in capital cost savings of upto USD 0.125 Mn per MW� Resulting in increase in output and reduction in losses

� Equipment from Europe, US, Japan, China� Strong partnerships with leading manufacturers� ICB (International Competitive Bids) to discover best price available� Group’s strong brand equity and global presence� Economies of scale

� Construction : WREPL has showcased its construction competence with installing 5 MW in 56 days

� In the land banks secured for projects in the pipeline – Welpun has completed laying foundations/boundary wall to reduce project turnaround time

� Standardised best in class processes and robust project management framework leads to predictable time, quality and cost control

Team with total experience of 1300 years

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PAGE 14STRICTLY CONFIDENTIAL

Welspun Renewables Energy Pvt. Ltd.

High quality Management

teamSustainability

orientation

Governance & People focus –Process driven

Cost competitiveness

Strong Project Management

In-house O&M

Project Execution track

record

On-time payments

Strong financial backing

Wide exposure

Ready Land Bank

Access to strong Technical

expertise/ R&D through EPC

arm

KEY FACTORS THAT HELPS US SUCCEED

WREPL

Stakeholder coordination

— Strong and sustained relationship with all the

stakeholders including Government agencies , suppliers, contractors , local villagers contributes to

the success of project

Standardization

— Based on our project experience in other locations,

the critical and long lead items had been standardized which results in parallel designing of

other components

Project management

— Resource planning and deployment along with the

productivity were analyzed on a daily basis. With the right supervision and incentive structure, higher

productivity is achieved

Integrated working

— Faster decision making is one of the key enablers of

efficiency and productivity. Two levels of decision making and engagement is created. Daily reviews

are conducted at site and corporate level. Sufficient authority is delegated at site level for faster decision

making

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PAGE 15STRICTLY CONFIDENTIAL

Welspun Renewables Energy Pvt. Ltd.

Environment & Sustainability Plan

� Reducing Facility

Environmental Impact

� Plantation & Water harvesting

� Energy conservation

and other awareness Initiatives

Healthcare

� Assistance to

Community Health Centres

� Medicals camps (Asthma, Polio,

family planning etc.)

� Free Check-up and medicine

� Health & Hygiene awareness

Campaign

� Operation winter

� Formation &

Strengthening of Village Health &

Sanitation Committee

Education

� Train the trainer/

experiential learning programs

� Need based financial assistance; school

meal schemes

� Infrastructure support for schools

� Job fairs/ career counselling

� Computer

Awareness Programs

� Vocational Training programs

� Adult Education

initiatives

Women Empowerment

� Formation of Self-

Help Groups

� Technical Training

for SHGs

� Marketing Plans

� Welspun India

appointed trained women as contract

labour – basic stitching

� Orders from

Welspun India –stitching and

handwork

Model Villages

� Formation of village

development committee & SHGs

� Infrastructure support (building

toilets, water taps)

� Literacy and healthcare initiatives

HOW WE GIVE BACK TO THE LOCAL COMMUNITY

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PAGE 16STRICTLY CONFIDENTIAL

Welspun Renewables Energy Pvt. Ltd.

WELSPUN IS WELL POSITIONED TO CAPTURE THE ~160 GW RENEWABLE PROJECTS

TARGETED BY GOVT. OF INDIA

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STRICTLY CONFIDENTIAL PAGE 17

Select Issues & Recommendations

2

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PAGE 18STRICTLY CONFIDENTIAL

Welspun Renewables Energy Pvt. Ltd.

Issue Recommendation

Cross-subsidy issue for Rooftop

Grid connected utility feed to metro areas and distributed/ rooftop solar for tier-2/tier-3 towns and rural areas

Payment security Given the financial health of the DISCOMs, default in payment to developers is seen as a critical risk by financial institutions. It is necessary to take constructive steps for allaying the fears of the bankers and ensure investments in the sector, through payment security mechanisms – for example in partnership with organizations such as Multilateral Investment Guarantee Agency (MIGA).

Clearances The clearance process for solar and wind power projects should be made much more simplified - mainly for the reason that these projects are sustainable and do not emit any pollutants - under the State Pollution Control Board, Consent to Establish (CTE)/ Consent to Operate (CTO) should be done away.

Land availability & right of way

Post assessing the solar potential of each state, government land banks should be created and allocated to the projects which are coming up in the state. Additionally, as solar and wind are non polluting industries akin to farms - hence these projects should receive Non – Agricultural Land Conversion exemption. This will avoid security perfection issue at Banks

Grid connectivity The typical project development cycle of solar & wind is six to eight months. However while the projects are ready to be commissioned, the corresponding power evacuation architecture lags behind exposing the project developers and banks to high financial risk. Developers in most states are facing this issue wherein they lose revenues because the evacuation infrastructure has not been timely developed. Therefore based on the solar potential in the state the respective state government should develop evacuation architecture. For developing the Green Corridor, a priority lending status should be given. This will ensure that as soon as the green energy projects are commissioned the evacuation infrastructure is already in place and they are able to transmit the energy generated to the state grid in a timely manner

BOS deficit BOS procurement is increasingly becoming a challenge. Focus on manufacturing and vendordevelopment for BOS rather than focusing on module manufacturing alone is essential to meet renewable targets

SELECT ISSUES & RECOMMENDATIONS

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STRICTLY CONFIDENTIAL PAGE 19

THANK YOU