The document discusses the status and potential of renewable energy in India, highlighting key statistics, industry leaders, and investment trends. It emphasizes the country's need for a stronger renewable energy sector to address coal dependency, rising emissions, and electricity access issues. Additionally, it outlines government targets and challenges facing the renewable energy market, including financing and infrastructure limitations.

1. Are Renewables back in vogue?
Aurum-DealCurry CXO Dialogues
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Webinar on the 7th of May 2015: 3pm – 4pm

2. Aurum Equity Partners LLP
An investment banking firm, with a depth of diverse-sector experience.

3. 3
Sanjay has over 20 years of experience ,with a deep and on the ground understanding and
exposure of handling more than a 100 mid and large sized transactions, across a range of sectors.
Work Experience:
• Ambit Corporate Finance , Co Founder and Managing Director
• Arthur Andersen Global Corporate Finance
• KPMG Corporate Finance
• AF Ferguson and Co.
Qualifications and Memberships
• Chartered Accountant (The Institute of Chartered Accountants of India)
• Advance Management Program (Kellogg Business School)
• Bachelor of Commerce (Honors) - Shri Ram College of Commerce at University of Delhi
• Member of RICS (A global real estate body)
• Investor member - Indian Angel Network
Sanjay Bansal
Founder and Managing Partner - Aurum Equity Partners
Speaker Profiles

4. 4
Sanjay has over 25 years of experience in the energy & electricity sectors of India & Nepal, spread
over multiple engagements for project development, investments & public private participation,
consulting, reforms & restructuring, power market development and other associated segments.
Work Experience:
• Partner, Aurum Equity Partners
• Head Power, Cairn India
• Sr. Vice President, IL&FS
• Head (BD), Crisil Infrastructure Advisory
Qualifications and Memberships
• MBA, Indian Institute of Technology, New Delhi
• PG Diploma, Indian Institute of Foreign Trade, New Delhi
• B.Tech., Indian School of Mines, Dhanbad
• Member, All India Management Association
Sanjay Kumar
Co-founder and CEO – Karaat Infra
Speaker Profiles

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Disclaimer
5

6. Source: CEA
Indian Power Market
6
State
37%
Private
36%
Central
27%
Coal
60%
Gas
9%
Diesel
1%
Nuclear
2%
Hydro
16%
Renewables
12%
Installed Capacity by Ownership (Jan 15) Installed Capacity by Fuel (Jan 15)
855 877 912 967 1,048
-
200
400
600
800
1,000
1,200
FY11 FY12 FY13 FY14 FY15E
India: Electricity Generation (TWh)
 India is the 3rd largest producer of electricity in the
world behind only US and China.
 The country has been augmenting its generation
capacity at a CAGR of 10% (FY10 to FY15)
 India’s per capita power sector consumption, around
940 kilo watt-hour (KWh), is among the lowest in the
world. (China 4,000 kWh, developed countries average
~15,000 kWh)
 Since 2003, the Government of India (GoI) has allowed
the private industry to generate power
Indian Power Sector by Volume (TWh)
Total: 259 GW Total: 259 GW

7. Source: Ministry of Coal, CEA, US EIA, Hindustan Times, The Hindu, Business Standard, IDFC
The need for renewables in India
7
Prevailing Demand Supply Gap Rising coal imports
Need to curb emissions Falling Thermal PLFs
73 69
103
143
169
200
-
50
100
150
200
250
FY10 FY11 FY12 FY13 FY14 FY15E
India’s coal import bill stood at INR 888 billion in FY1425% of India’s population does not have access to electricity
78%
75% 73%
70%
66%
55%
60%
65%
70%
75%
80%
FY10 FY11 FY12 FY13 FY14
India’s CO2 emissions from the Consumption of Energy
1,449
1,643
1,715 1,753
1,831
500
1,000
1,500
2,000
2008 2009 2010 2011 2012
Million Metric Tons
India is the world’s 3rd largest CO2 emitter PLF for gas based power plants was only 25% for FY14
13%
10% 11%
9%
6%
4%
0%
5%
10%
15%
FY10 FY11 FY12 FY13 FY14 Jul-14
Peak Deficit (%)

8. Source: GWEC, Pure Energies, REN 21
Renewable Power – Global Perspective
8
In 2014, a record number of wind and solar power capacity was installed (95GW)
Global Renewable Power Capacity (GW, Dec 2013)
139
3
318
88
12
0
50
100
150
200
250
300
350
Solar PV Solar CSP Wind Bio-Power Geothermal
Total: 560 GW*
*Does not include heating applications
Leading Countries – Installed Capacity (2014)
Rank Wind (GW) Solar PV (GW)
1 China (114) Germany (35)
2 US (66) China (18)
3 Germany (39) Italy (18)
4 Spain (23) Japan (14)
5 India (22) US (12)
Global Electricity Production (2013)
78%
16%
3%
2%
1% 0%
Fossil Fuels
Hydro Power
Wind
Bio-power
Solar PV
Others
Unsubsidized Levelized Cost of Energy (LCOE, $/MWh)
180
72 37
297
92
66 61
265
86 81
332
132
151
87
0
100
200
300
400
Solar PV
Rooftop
Solar PV
Utility
Scale
Wind Diesel
Generator
Nuclear Coal Gas
Combined
Cycle
US market estimates (Lazard, 2014)

9. Source: UNEP
Global Renewable Energy Investment
9
150
99
8
5
5
3
- 50 100 150 200
Solar
Wind
Biomass
Biofuels
Small Hydro
Geothermal
Global New Investment by Sub-segment 2014
45
73
112
154
182 178
237
279
256
232
270
-
50
100
150
200
250
300
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Global Investments in Renewables
USD bn USD bn
162
190
149 135 139
75 89
107 97
131
-
100
200
2010 2011 2012 2013 2014
Developed Developing
Developed vs Developing Countries 2014
USD bn
China: USD 83 bn
Brazil: USD 7 bn
India: USD 7-8 bn
2014 saw a rebound in investments in renewables Solar and Wind energy captured the bulk of new investment
Developing countries, led by China, have upped investments
PE/VC investment by Sub-segment 2014
Solar
58%
Biofuels
22%
Wind
11%
Biomass
7%
Others
2% Total: USD 2.8 bn
VC/ PE investments in renewables grew by 27% compared to 2013

10. Source: Tata Power, NISE, Edelweiss, MNRE, National Institute of Solar Energy in India
India’s renewable energy potential
10
Average Solar Irradiation (KWh per sq.m.) Wind Energy Potential (GW)
35
14 14 14
25
-
5
10
15
20
25
30
35
40
Gujarat Andhra
Pradesh
Tamil Nadu Karnataka Others
India’s solar power potential is estimated to be over 1,000
GW depending on availability of waste land resources
 1,000 GW of solar power capacity can be installed in
India on 16,000 sq.km.
 This would require 0.5% of India’s total landmass (3.5%
of total available wasteland)
 1,000 GW of solar power could generate ca. 1,500
TWh, 1.5 times India’s current annual power demand
India’s wind power potential is estimated to be over
100 GW at 80 m hub height (MNRE)
 Wind potential has been estimated by MNRE at
sites having wind power density greater than 200
W/sq. m at 80 m hub-height with 2% land
availability @ 9 MW/sq. km.
 U.S.-based Lawrence Berkeley National Laboratory
in a 2012 study, estimated India’s wind power
potential to be much higher (over 2,000 GW)
5.1
4.8 4.7
4.2
3.8
3.6 3.6
2.9
-
1.0
2.0
3.0
4.0
5.0
6.0
India Spain USA Australia Italy Japan China Germany
All India: 103 GW (at 80 m hub height)

11. Source: CEA, Bloomberg, Credit Suisse, Edelweiss
India – Renewables Overview
11
9.3
13.1
7.8
7.0
7.9
10.0
-
2.0
4.0
6.0
8.0
10.0
12.0
14.0
2010 2011 2012 2013 2014 2015E
Clean Energy Investment in India (USD bn)India Renewables Capacity (Non Hydro)
Wind,
21,136 , 76%
Biomass
Power,
4,014 ,
14%
Waste to
Energy, 107
, 0%
Solar, 2,632
, 10%
Total: 27,888 MW (Jan 2015)
Wind and Solar Capacity Addition
3,197
1,700
2,079
1,513
906 742
963
736
-
1,000
2,000
3,000
4,000
FY12 FY13 FY14 11MFY15
Wind (MW) Solar (MW)
Wind/solar capacity additions averaged 3GW p.a. since FY12
Cost of Electricity by Fuel Type
Fuel Source
Capex
(INR mn/ MW)
Cost of Generation
(INR/ KWh)
Solar PV 69 9.4
Solar Thermal 120 14.7
Wind 60 6.2
Biomass 60 -80 4.5
Small Hydro 55-60 7.8
Coal 60-65 3.9
Gas 45-50 3.5
Renewable investments to witness a strong rebound in 2015India’s renewable mix is heavily biased towards wind power
New Technology is helping reduce Capex/MW for renewables

12. Source: NITI Aayog, Edelweiss
Key Support Mechanisms
12
 AD refers to a tax-based incentive mechanism in which RE projects can take larger than normal
depreciation benefits on their tax returns in the initial years of investment
Accelerated Depreciation
(AD)
 GBI provides wind electricity producers an incentive of Rs 0.5 per kWh fed into the grid for a period
of not less than four years and a maximum period of ten years with a cap of Rs 100 Lakhs per MW
Generation Based
Incentives (GBI)
 Under the VGF mechanism, the tariff to be paid to the solar PV developer is fixed at Rs 5.45 per
kWh. The developer will be provided a VGF based on its bid. The upper limit for VGF is 30 percent of
the project cost or Rs 2.5 crores/MW, whichever is lower.
Viability Gap Funding (VGF)
 An RPO is a requirement for an electricity purchaser (e.g., a Discom or an open access [OA]
consumer) to procure a certain percentage of electricity from renewable sources.. Currently, RPO
levels are set by each State Electricity Regulatory Commission (SERC) independently
Renewable Purchase
Obligation (RPO)
 REC is a tradable certificate of proof that 1MWh of electricity has been injected into the grid
 The REC program aims to provide market based incentives for RE developers and distribute the
marginal cost of RE deployment nationwide.
Renewable Energy
Certificates (REC)
 Feed-in tariffs (FITs) are preferential tariffs for procuring RE by Discoms that are established by a
SERC through its usual regulatory process.
Feed-in Tariffs (FIT)

13. 13
Recent Policy Action
 Revised Targets: The government has announced new targets for installed renewable energy
capacity of 175 GW by 2022. 100 GW of this would come from solar power, 60 GW from wind
energy, 10 GW from small hydro power, and 5 GW from biomass-based power projects.
 Green Corridors: The Government is also working on setting up ‘green corridors’, which will ensure
evacuation of power from key centers of generation.
 Budget 2015: USD 400 million allotted for renewable energy expansion
 The government has doubled the tax on every metric ton of coal imported or produced in the
country. The revenue collected from this tax goes to the National Clean Energy Fund (NCEF)
 Amendments proposed to Electricity Act including open access reforms and enhancement of
Renewable Purchase Obligations

14. 14
Investment Announcements
NTPC has agreed to set up 10,000 MW of renewable energy in the next five years.
Reliance Power has also announced plans to set up a 6,000 MW solar park in Rajasthan over the next 10 years.
Hinduja Group announced plans to generate 1,000 MW of power through solar projects
SunEdison and Adani Group announced plans to invest up to USD 4 billion in an Indian solar power factory joint
venture
Japanese Softbank is evaluating plans to develop as much as 10 GW of solar in India
State Bank of India (SBI) has committed to lend INR 75,000 crore towards 15,000 MW of projects
ReNew Power Ventures plans to set up 11,500MW of renewable energy in the next five years
Suzlon and Gamesa have committed to manufacture equipment to help generate 11,000 mw and 7,500 mw of power
respectively
At a renewable energy event, 'RE-Invest 2015‘ (February 2015), the government claimed it has
received 266,000 MW worth of green energy commitments from banks and other private firms

15. 15
Financing Renewable Energy
Source: MNRE, USAID
EquityDebt
Domestic
Debt
 Government Banks
 Private Banks
 Government supported NBFCs
 Private NBFCs
Foreign
Debt
 External Commercial Borrowing
 International Development Banks
 EXIM Banks
Other
Debt
 Supplier Credit
 Bridge Finance
 Takeout Finance
 Infrastructure Debt Funds
 Lease Financing
Promoter’s
Equity
 Corporate Entities
 Independent Power
Producers
Private
Equity
 Global/ Indian PE Funds
 Venture Capital Funds
 Infrastructure Funds
Multilateral
Agencies
 International Finance
Corporation
 Asian Development Bank
Other
Equity
Investors
 Sovereign Wealth Funds
 Pension Funds

16. 16
Policy and Infrastructure Challenges
 Pricing of FITs: If the FiT is too high, it leads to unwarranted profits for developers, while if set too low, the FiT
can lead to very low financial returns leading to low investments in the sector.
 RPO Mechanism Constraints: Poor enforcement of RPO obligations, uneven cash-flows for generators, irrational
floor prices for solar RECs, lack of price certainty post 2017.
 Accelerated Depreciation Constraints: AD can only be utilized by profit-making entities with appreciable tax
liabilities and cannot be transferred, it effectively excludes most IPPs and investors who plan on using a SPV
route for project development
 Inadequate Infrastructure: Inadequate transmission infrastructure and associated inefficiencies and losses
Key Challenges for Renewables in India
Market Based Challenges
 Off-take uncertainty: The creditworthiness of the off-takers (e.g. state distribution companies) has led to
uncertainty regarding cash flows and pushed away investors.
 Limited financing options: Banks and financial institutions are more cautious lending to RE projects. Participation
of equity investors has been muted.
 Lack of exit options for investors: Private equity investments in the Indian RE space are more than five years old
as investors have not been able to find exits.

17. 17
Uncertain cash
flow for RE
developers
Slowdown in
investment into
RE projects
Renewables do
not replace
coal
Rising, volatile
Coal costs
High burden of
energy subsidy
(e.g. agriculture)
Poor financial
health of
DISCOMs
Failure to
honor RPOs
Vicious Circle for Renewables in India
Finance Cost burden on RE Projects
100%
75% 75%
98%
126%
-25% +23%
+28%
0%
20%
40%
60%
80%
100%
120%
140%
US LCOE India
Lower
Capex
Costs
India
Lower
Ouput
Efficiency
India -
Higher
Finance
Costs
India
LCOE
100%
71%
66% 66%
88%
-29%
-5%
+22%
0%
20%
40%
60%
80%
100%
120%
US LCOE India
Lower
Capex
Costs
India
Lower
Ouput
Efficiency
India -
Higher
Finance
Costs
India
LCOE
Solar PV
Onshore Wind
Source: Edelweiss, CPI ISB Report

18. 18
Recent M&A Activity
Date Sub Sector Acquirer Target Value (USD mn)
Apr 15 Solar Power
Generation
Surana Telecom and
Power
Arhyama Energy NA
Feb 15 Wind Power Dilip Sanghvi
(Sun Pharma)
Suzlon Energy 293
Feb 15 Renewable
Energy
Semborp Utilities Green Infra 171
Sep 14
Wind Power
Generation
Ghatge Patil Group
Bharati Shipyard - wind
power business
9
Jun 14
Solar Power
Generation
Concept Solutions &
Innovation (Cyprus)
CaptureSolar Energy 125
Jun 14
Solar Power
Generation
ADB
Welspun Renewables
Energy
52
Apr 14
Wind Power
Generation
Suzlon Energy
Edison Mission - Big Sky
Farm
NA
Apr 14
Solar Power
Generation
GE Energy
Welspun Solar Madhya
Pradesh
24
Source: Databoard

19. 19
Recent PE/VC Activity (1/2)
Date Sub Sector Investor Target Value (USD mn)
Feb 15
Solar Power
Generation
Blackstone, Gujarat
Venture Finance Ltd
Rays Power Experts
Private Limited
65
Feb 15 Solar – Offgrid Fidelity Growth Greenlight Planet 10
Dec 14
Biomass/ Waste
Generation
Intellecap Impact
Investment Network (I3N)
and existing investors
Banyan Green Fuels
Private Limited
0.2
Nov 14 Cleantech Villgro Innovations
Sustainearth Energy
Solutions Private Limited
NA
Oct 14
Renewable Power
Generation
EIG Global Energy
Partners
Greenko Energies
Private Limited
125
Oct 14
Solar Power
Generation
Core Infrastructure India
Fund Pte Ltd.
(CIIF),GEEREF
SolarArise India Projects
Pvt. Ltd
33
Aug 14
Solar Power
Generation
Opes Impact Fund
Rainta Capital
Sumantra Roy
Boond Engineering and
Development Private
Limited
NA
Source: Databoard

20. 20
Recent PE/VC Activity (2/2)
Source: Databoard
Date Sub Sector Investor Target Value (USD mn)
Jul 14
Wind Power
Generation
GE Energy Financial
Services
Atria Power Corporation
Limited
15
Jul 14
Solar Power
Generation
Chennai Angels
Fourth Partner Energy
Private Limited
NA
Jul 14
Wind Power
Generation
Goldman Sachs, ADB and
South Asia Clean Energy
Fund
ReNew Power Ventures
Private Limited
140
Jun 14
Solar irrigation
solutions
Intellecap Impact
Investment Network (I3N)
A K Surya Power Magic
Private Limited
0.5
Apr 14
Renewable
Power
Generation
Lightbox Ventures Kotak Urja Private Limited NA
Feb 14
Solar lighting
and power
products
DFJ, Omidyar Network,
Nexus India Capital, Gray
Ghost Ventures, Acumen
Fund and Garage
Technology Ventures
D.light Energy Private
Limited
11

21. Renewables Outlook
21
Vast RE potential
Ever increasing energy demand
Increasing affordability of RE
Visible recent policy initiatives
Aggressive RE targets set for 2022
Increased foreign investor interest in Indian RE
Policy implementation uncertainty
Inadequate transmission and evacuation
infrastructure
High debt finance cost
Limited participation from equity investors due
to exit challenges
Opportunity for small investments through off-
grid projects
Poor financial health of DISCOMs
The drivers for renewable energy in India outnumber the hurdles. If challenges related to policy
implementation and financing can be resolved, the next decade could see unprecedented
investment activity in Indian renewable energy sector

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22