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
Thermal

156 GW
- 100 GW - 37 GW - 15 GW

Hydro
Renewable

Per Capita Consumption RE Share in Generation Energy Served Population Peak Deficit Energy Deficit AT&C Losses

730 units 4% 60% 12% 11% 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 NAPCC Purchase Obligations Preferential Tariffs/ GBI/ RE Certificate Guaranteed off-take, Must-Run status

Enabling Legislations

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
Wind Small Hydro Cogeneration Biomass Solar Total Potential (in GW) 48 15 5 17 Unlimited Harnessed (in GW) 11 2.6 1.2 0.8 6

Note: Grid connected capacity as on 31-Oct-2009

Investments in Indian RE
Parameters Total Investments VC & PE Foreign Exchanges Domestic Bourses M&A Wind Solar SHP Bio-Fuel Asset Finance 2007 USD 3.3 Bln USD 133 Mln USD 756 Mln USD 646 Mln USD 585 Mln USD 2.2 Bln USD 18 Mln USD 135 Mln USD 251 Mln USD 2.5 Bln SECTOR-WISE USD 2.6 Bln USD 347 Mln USD 543 Mln USD 49 Mln USD 3.2 Bln 17% 1800% 300% (80%) 25% 2008 USD 3.7 Bln USD 493 Mln -USD 74 Mln USD 585 Mln % Change 12% 280% -(85%) --

SOURCE-WISE

2012 RE Targets & Investments

Sector Wind Solar** Small Hydro Biomass Capacity* (MW) 6250 1000 860 1380 USD Mln per MW 1.1 3 1.4 1.00 Investments USD Bln 7 3 1.2 1.3

TOTAL
By 2012

9500
25000

12.5

(*) After deducting for the commissioned capacity as on 31 Oct09 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

INDIA: Ideal Destination

Business India USA US$ 35 Billion FDI in UK 2008-09 China ICT India USA China UK Financial USA China UK India Electronics China India USA UK Motor China USA India Poland Pharma USA China India UK

Source: IBM-PLI Global Investment Locations Database, GILD

FDI in Indian Power Sector

Power Sector RE Sector (US $ Mln) (US $ Mln) 985 85

Year 2008-09

2007-08 2006-07

968 158

43 2

ABOUT IREDA

Agenda II

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

Evolution
INCEPTION
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 Areas
Sectors 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 Offerings
Schemes 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 Total Loan Sanctions Loan Disbursements Sanctioned Power Capacity Commissioned Capacity Conventional Fuel Replacement

:1892 :Rs.10,356 Cr :Rs. 5,754 Cr :3616 MW :1902 MW :13L MTCR/Yr

As on 31/03/2009

India RE Portfolio IREDA Share

Sector Bio-Power Wind SHP Co-Gen W2E Solar TOTAL Total MW 703.0 10242.0 2428.8 1049.0 59.0 2.9 14484.7 IREDA MW 224.8 907.9 300.0 494.6 24.7 NIL 1951.9 % Share 32.0% 8.9% 12.4% 47.1% 41.8% NIL 13.5%

As on 31/03/2009

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 Partnerships
Lines of Credit Availed Govt of Netherlands, 1991 World Bank (1st LoC), 1993 DANIDA, 1993 Asian Development Bank, 1997 KfW, Germany (1st LoC), 1999 World Bank (2nd LoC), 2001 KfW, Germany(2nd LoC), 2008 KfW, Germany (3rd LoC) Lines of Credit in Pipeline AFD (France) JICA (Japan) :18 Million Dutch Guilders :$ 145 Million :$ 15 Million :$ 100 Million : 61 Million :$ 110 Million : 50 Million : 19.9 Million : 70 Million :$ 100 Million

Lenders Perceptions

ADB -

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

World Bank KFW -

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