Indo-German Financial Cooperation in Maharashtra in the Solar Sector

Workshop for Solar Energy & Smart Grid Development Jodhpur 13-15 September 2011

Agenda

Rationale for engagement in Maharashtra KfW International experience Projects in Maharashtra Lessons learnt

KfW Bankengruppe at a glance

Promotion of housing, environmental and climate protection, education, infrastructure, social issues

Promotion of SMEs, business founders, start-ups

International project and export finance

Promotion of developing and transition countries

Selected References - PV
51 MWp PV-Plant Strakirchen, Bavaria, Germany
The Challenge

EUR 115 million debt required financial close in a short period of time parallelism of debt structuring and share deal

The Solution
small banking club (IPEX-Bank and Commerzbank) involvement of attractive KfW supporting loans (Programme 086)

Source: Q-Cells International GmbH

51 MWp PV-Plant Strakirchen, Bavaria, Germany

Total investment volume: approx. EUR 150 million

Value added by KfW IPEX-Bank

Remarkable ticket size Experience with financing of PV-large scale projects IPEX roles: Lead Arranger, Facility Agent and Technical Bank

KfW Financing Photovoltaic Solar Projects 2010

Selected References - PV
53 MWp PV-Plant Turnow, Brandenburg, Germany

53 MWp: largest solar PV plant in Germany and third

largest in the world (as per February 2010)

Investment: approx. EUR 160 million almost 40,000 CO2 t savings p.a. KfW IPEX Bank in the roles of Lead Arranger, Facility
Source: Juwi Solar GmbH

Agent, Documentation Bank and Cash-Flow Modeling

Other MLAs: BremerLB, DZ Bank (Security Agent),

Helaba (Insurance Agent) and NordLB (Technical Agent)

EIB and KfW- EE Ergnzung 2009 refinancing Experienced partners / producers: Juwi, First Solar,

SMA, Schletter
comprehensive due diligence package
Source: Juwi Solar GmbH

comprehensive project warranty structure

KfW Financing Photovoltaic Solar Projects 2010

KfW brings in over 30 years of experience with Indian power sector

German Financial Cooperation has been Indias partner in the Energy Sector

for nearly 30 years: Supported energy sector with nearly EUR 1.3 billion budget funds and more than EUR 1 billion of KfWs own funds
Facilitated technology transfer in

key areas
Some of our cooperation partners (completed projects)
NTPCs Dadri, Farakka, Korba, Ramagundam, and Singrauli. MSEB Uran Gas Project; Koyana HE Project OHPC Hirakud HE Project IREDA-I Credit Line for RE Projects NLCs Neyveli Lignite Corporation (for Mine and Power Plant)

KfW Energy Sector Projects in India (Ongoing Projects) - I

No 1 2 3 4 Project Name Krishnapatnam Super-Critical Thermal Pl R&M Thermal Power Plants REC-I (HVDS Project) Distribution REC-II (HVDS Project) Distribution
Borrower

PEA APGenco Sub-Borrowers APSPDCL UHBVNL

Loan in Million
EURO

Grant 0.50 0.50 0.50

GOI GOI REC REC

281.06 90.00 70.00 70.00

KfW Energy Sector Projects in India (Ongoing Projects) - II

No 5 6 7 8 9 10 11 12 13 14 Project Name EE in Medium & Small Enterprises EE in Buildings PFC-II (Hydro) GEF Biomass IIFCL (Renewables) Pare Hydroelectric Project IREDA-II (Renewables) IREDA IV (Renewables) Anta Solar Field 125 MW Sakri Solar Power
Borrower

PEA Sub-Borrowers Sub-Borrowers UJVNL Sub-Borrowers Sub-Borrowers NEEPCO Sub-Borrowers Sub-Borrowers NTPC MAHAGENCO

Loan in Million
EURO

Grant 0.50 1.50 3.33 0.50 0.50 0.5 10 1.0

SIDBI NHB PFC IREDA IIFCL NEEPC O IREDA IREDA NTPC GoI

50.00 50.00 100.57 19.97 180.00 80.00 50.00 200.00 100.00 250

Total

1591.6

19.33

125 MW Solar PV Plant Sakri Shivajinagar/ Dhule District/Maharashtra

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Technology Capacity Commissioning

Crystalline & Thin Film 125 (+25) April 2012

Part of Maharashtra Solar Valley Clusters Initiative KfW Loan interest-subsidised loan 12 years/2 years grace/fixed interest rate TA Package on Grant basis

125 MW Solar PV Plant Mahagenco

Technology:

3 x 25 MW (Crystalline), 2 x 25 MW (Thin Film)

Total estimated project costs: 370 million EUR including 12.5 million EUR O&M costs Equity portion: Debt Portion: 120 million EUR (32.5%) 250 million EUR (67.5%)

Guaranteed feed-in tariff as per MERC guidelines/PPA with Mahadiscom: Rs 17.91/kWh for 25 years.
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125 MW Solar PV Plant Mahagenco Indicators

Indicator Electricity production CO2 Reduction

Target 185 GWh p.a. 159,100 tons p.a. (@ grid emission factor of 0.86 Kg of CO2 / KWh)

Replication of solar projects in 3 years after commissioning of Sakri Power the state of Maharashtra plant at least one more Solar PV and one more Solar Thermal power plant is under construction Fulfilment of its Renewable Purchase Obligation (RPO) as per Maharashtra Electricity Regulatory Commission (MERC) Guideline MahaDiscom is able to meet RPO of 0.5% of electricity purchase from solar from FY 201314 (minimum quantum sale in % from renewable energy sources (in terms of energy equivalent in kWh)

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Loan Structure

KfW (under mandate from German Ministry of Development Cooperation) GoI (MoF) Gov of Maharashtra Mahagenco EPC-Contractors
1 2 3 4 5

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Timelines

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DPR developed Q3/2010 Tender Q1/2011 KfW Pre-Appraisal Jan 2011 GovernmentAgreement April 2011 KfW Board Approval LoA EPC Contracts May 2011 German Government Authorisation for contract negotiations April 2011 Signing of Loan agreement Aug 2011 First disbursement Sept 2011 TA in place: Nov 2011 Commissioning April 2011

Prefeasibility Studies in the framework of Solar Valley Clusters Initiative - TOR

1. A plan for deployment of five large-scale solar plants up to

2020 in terms of appropriate technologies, capacities, and optimum developmental and environmental impact 2. Site specific recommendations for deployment of solar plants in terms of technology and systems 3. Solar Energies technologies development plan including research and development (R&D) measures, 4. Recommendations on initiatives for supporting increased manufacturing of the components of solar energies equipment, 5. Recommendations on institutional capacity development for Mahagenco, including planning, implementation and operation 14 and maintenance (O&M)

Prefeasibility Studies in the framework of Solar Valley Clusters Initiative Time Planning

RfP Publication on www.bfai.de Aug 15, 2011

LoA November 2011

Study completed Q1/2012

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Lessons learnt
Successful working relationship as starting point (Nashik project) Political Commitment Budgetary Commitment Shared Vision and common objectives Securing Tariff Fast-track mode for internal approval mechanisms Capacity to deliver in accordance with tight deadlines Permitting, tender, implementation
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The Vision

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Thank you for your attention!

Busso von Alvensleben Coordinator Indo-German Cooperation in the Energy Sector KfW Development Bank India Office New Delhi Busso.Alvensleben@kfw.de www.kfw.de

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