Reaching new heights.

By doing what’s right.

Tata Capital
Green/Clean-Tech Finance

The Green Finance business has been specifically formed to

empower specialized needs of business with sustainable

products and services.

A team of in house experts, customized financial solutions

catering to entire value chain of varied sectors of renewable

energy, energy efficiency and water management

With the assurance to be reliable, consistent and

transparent, we offer a range of offerings that includes,

Project Finance, Equipment Finance, mezzanine debt,

bridge finance Working Capital, Bill Discounting/ Factoring,

Refinance, Top Up Loans and Loan Syndication.

Renewable Energy – Overview

 Renewable energy is sustainable - Obtained from sources that are

inexhaustible.
 Clean energy, non-polluting and is cost-effective and efficient
 It is a sustainable energy source which can be relied on for the long-term.
 Renewable energy sources include wind, solar, biomass, geothermal,
hydro, Hybrid systems, Green power, Fuel cells, Nuclear energy etc.
 Major benefits of the Renewable Energy
– Rising Prices of Oils & Gases
– Ecological Hazards
– Ample resources and sites available
– Abundant sunshine
– Government incentive
– Increased financing options
 INDIA - Current Scenario

Total installed Capacity - 159396 MW March 2010 India imports majorly oil and other energy fuel
Thermal Nuclear Hydro Renewables
– 159 million tons, amount to 31% of total imports.

10.00%

Planning commission projects that energy

imports could double to 53% in 2031-32.

23.00%

India is the fourth most attractive country for

3.00% Renewable Energy and second most attractive
64.00%
destination for Solar Power projects.

India is already a leader in wind power

Source- Ministry of New and Renewable Energy
generation
INDIA - An Upcoming Solar Energy Hub

 With about 300 clear, sunny days in a year, India's theoretical solar power reception, on only its land area, is
about 5 Petawatt-hours per year (PWh/yr) (i.e. 5000 trillion kwh/yr or about 600 TW).

 Rising Middle classes as proportion of nation’s population in India would add to steep rise in demand for energy
and electricity in particular.

 An average of 16 GW of power generation capacity installations required each year till 2020 to meet fast growing
demand for electricity power.

 India has an estimated solar potential of 600 TW, of which around 1.5 GW has been utilized till date and it is
further estimate to produce 20 GW by 2022.

 Looking forward to the scarcity of the natural fuel, solar is taken as the only source for energy .
A potential for up to 10 GW of Solar power installations in next 5 years and 5 GW Wind would require an

investment to the tune of US $ 35 billion.

 Solar Power Policy
A developer can set up a solar power project in India in one of the following ways:

National Solar mission State Policies

Solar Policy of the Govt aimed Individual states like Gujarat,

at setting up 20,000 MW of Solar Rajasthan, Karnataka and

Power Plants by 2022 Madhya Pradesh have released

their own policies to set up

Solar PV Power Plants in the

respective states
Renewable Energy certificates

Any Project developer can set up any size of project anywhere in India. Unlike preferential tariff under
4/17/18 6

NSM and state policies, REC’s offer a variable tariff over the lifetime of projects.
SOLAR ENERGY – REC Mechanism

 Renewable Energy generators have two options:-

 Sell the renewable energy at preferential tariff

 Sell electricity generation and Renewable Energy Certificates (REC)
 REC mechanism is a market based instrument to promote renewable energy and facilitate compliance of
renewable purchase obligations (RPO).

 It is aimed at addressing the mismatch between availability of RE resources in state and the requirement of the
obligated entities to meet RPOs.

 REC Buyers- Distribution Licensees , Captive Consumers & Open Access users
 Trade of REC - only in the CERC approved power exchanges i.e. Power Exchange of India (PXIL)
 CERC has determined price range for RECs till FY 2016 -17 – Rs. 9300/- to Rs. 13400/- per REC (1 REC = 1000
units)
. 

REC - Eligibility Criteria

 All renewable energy generators already NOT having PPA with the distribution licensees for contracted
quantum;

 RE generator selling electricity generated either :

 to the distribution licensee of the area in which the eligible entity is located, at a price not exceeding
the pooled cost of power purchase of such distribution licensee; or

 to any other licensee or to an open access consumer at a mutually agreed price, or through power
exchange at a market determined price;

 eligible CPP utilizes electricity for self consumption

 All REC based captive power produces shall be eligible for their entire energy generation including self
consumption.
REC - Operational Framework

Accreditation by State Agency

4/17/18 9
. 

REC - Timelines, Fees & Charges

Application
. 

Why REC?

Benefits of having you own captive solar plant:-

1. Risk Mitigation - Mitigates the risk of price uncertainties over the coming decade.
2. Availability Assurance - Continuous availability of clean power.
3. Tangible Savings - Energy usage & expenditure.
4. Attractive Returns -
Captive Power

• Any association of persons / entities having 26 per cent shares in a

generating company can consume power more than 51 per cent -
and can be treated as a captive power.

- Electricity Act 2005

Why Captive?

• A consumer buying electricity from inside or outside the state via

open access, ends up paying electricity charge to the generator
plus the wheeling charges depending upon intra- or inter-state and
then the cross-subsidy surcharge. The sum of these three
invariably makes open access electricity purchase an unviable
option.

• Consumers of captive power need not pay cross-subsidy charges as

they are exempted for a captive power plant under section 42 of
the Electricity Act, 2003.
 HT Tariff for Different States

Fixed Charge at Energy Charge for Fixed Charge at Energy Charge for Fixed Charge at Energy Charge for
11kV 11kV supply 33kV 33kV supply 132kV 132kV supply
State (Rs./kVA/month) (Rs./Unit) (Rs./kVA/month) (Rs./unit) (Rs/kVA/month) (Rs./unit)

Andhra Pradesh 250.00 4.80 250.00 4.37 250.00 3.97

Madhya Pradesh 225.00 5.10 370.00 5.00 470.00 4.60

Himachal Pradesh 350.00 3.70 350.00 3.70 350.00 3.70

Tamil Nadu 300.00 5.50 300.00 5.50 300.00 5.50

Haryana 130.00 4.70 130.00 4.60 130.00 4.50

Orissa 250.00 4.90 250.00 4.90 250.00 4.90

Maharashtra 0.00 6.75 0.00 6.75 0.00 6.75

Rajasthan 125.00 5.00 125.00 5.00 125.00 5.00

Karnataka 170.00 5.20 170.00 5.20 170.00 5.20

West Bengal 264.00 5.65 264.00 5.52 0.00 5.65

Gujarat 270.00 4.30 270.00 4.30 270.00 4.30

4/17/18 14
Open Access Charges at State
Level
 Cost of Project & Return
Per MW Pessimistic Base Case Optimistics

Cost of Project(Rs Crores) 9500 9500 9500

Genreation(million units) 1.8 1.8 1.8

APPC (Rs. Per unit)

Tariff Escalation    

Price of REC for 5 years (Rs) 0 9.3 9.3

Price of REC after 5 years (Rs) 0 0 4

D:E Ratio 70;30 70;30 70;30

Interst Rate 13% 13% 13%

Tenure of Loan 8 Years 8 Years 8 Years

Accelerated Depreciation 80% 80% 80%

Project IRR 28% 14.46%

Equity IRR 72.93% 23.91%

Benefits

Return on Equity - REC offers a much higher ROE

Bank guarantees- No bank guarantees needed to set up project

Accelerated Depreciation- Can be claimed without tariff revision

Size of Plant - Any capacity power plant can be set up

Choice of location- Project can be set up anywhere