Cleantech Market Opportunities in India

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Cleantech Market Opportunities in India

  1. 1. Cleantech Market Opportunities in India US India Venture Capital Association 13 th February 2008 Erin Iping Kuo Jeff Castellas Director, India CEO Cleantech AustralAsia
  2. 2. About Us <ul><li>Mission to accelerate the investment in and deployment of cleantech in Asia Pacific to address Sustainable Development </li></ul><ul><li>Niche Investment Banking—placement, advisory </li></ul><ul><li>Consulting--Asia Pacific Partnership </li></ul><ul><li>4 th AustralAsian Cleantech Forum </li></ul><ul><ul><li>11/12 th March 2008, Melbourne </li></ul></ul><ul><li>2 nd India Cleantech Forum </li></ul><ul><ul><li>10 th /11 th July 2008 New Delhi </li></ul></ul><ul><li>Online Cleantech platform @ </li></ul>www.cleantech forum.com
  3. 3. What is Cleantech? <ul><li>Broad range of products and markets, including: </li></ul><ul><li>technologies in alternative energy, such as wind, solar, or biomass power </li></ul><ul><li>energy storage and energy efficiency </li></ul><ul><li>advanced waste management and recycling </li></ul><ul><li>smart-grid technologies for the utility grids </li></ul><ul><li>electric or hybrid-electric transportation </li></ul><ul><li>advanced materials, including biodegradable plastics </li></ul><ul><li>water technologies </li></ul><ul><li>alternative fuels, including bio diesel and ethanol </li></ul><ul><li>green building technologies </li></ul>
  4. 4. Drivers for Cleantech in India <ul><li>Energy uncertainty </li></ul><ul><li>Climate Change </li></ul><ul><li>Energy Security </li></ul><ul><li>Need for improved infrastructure </li></ul><ul><li>Public Health and Environmental Degradation </li></ul><ul><li>Sustainable Development Imperative </li></ul><ul><li>Policy initiatives </li></ul><ul><li>Resource availability </li></ul>
  5. 5. VC/PE Statistics <ul><li>2007 Indian PE deals ~$10 Billion across 245 deals, 1% of which were Clean tech </li></ul><ul><li>2007 Indian VC/PE activity in Energy Efficiency $1.4 Billion </li></ul><ul><li>Typical Opportunity Size: $250m-5MM </li></ul><ul><li>Sources: Sun Group, New Energy Finance </li></ul>
  6. 6. Examples of Recent Deals <ul><li>In June 2007, Indian Luminous Power Technologies received INR 829m (USD 20.3m) from CLSA ARIA Investment partners and CLSA Clean Resources in series A first round financing. </li></ul><ul><li>In December of 2006, Indian electric car manufacturer, Reva Electric Car Company (RECC), received an investment of USD 20.0m from Draper Fisher Jurveston (DFJ) and Global Environment Fund. </li></ul><ul><li>As of 15 October of 2007, Vestas RRB India, the India-based manufacturer of wind electric generators, has received an investment of USD 55m from Merrill Lynch. </li></ul>
  7. 7. Examples of Recent Deals continued <ul><li>In April 2007, Lakshmi Energy and Foods arranged project finance for its 30MW biomass plant in Khamanu district in the state of Punjab, India. Power Finance Corporation is acting as lead debt agent/arranger for this USD 112 million project. </li></ul><ul><li>In March 2007, Reliance Energy secured finance for their USD 202m 150 MW wind turbine capacity project in Sangli District in the State of Maharashtra. </li></ul><ul><li>On 5 July 2007, Indian hydro and wind project developer Bhoruka Power acquired SLS Power Industries for INR 800m (USD 20m). </li></ul>
  8. 8. Renewable Energy Source Installed Capacity (MW) Potential (MW) MNRE Target addition to 2012 Estimated Investment Required for 11 th plan addition Small Hydro 2013 15000 1400 $2.1 B Wind Power 7231 45195 10500 $16 B Biomass Power 620 19500 500 Cogeneration (CHP) 602 16000 1200 Solar Photovoltaic 86 50 Waste to Energy 52 2700 400 $306 MM Geothermal 0 Being Investigated
  9. 9. Cleantech Market Opportunities in India Source: U.S. & Foreign commercial service and U.S. Department of State as on 2006 * Providing knowledge based services for implementing environmental initiatives Sector Market Size ($ billion) as of 2006 Est. Growth Rate (%) Energy Efficiency and Renewable Energy 3.00 15.00 Water and Wastewater Treatment 1.24 6.00 Solid Waste Management 0.41 10.00 Air Pollution Controls 0.41 15.00 Environment Consulting* 0.12 20.00 Hazardous Waste Management 0.10 7.00 Total 5.29 15.00
  10. 10. Technology Mapping, India-U.S. Collaborations—Solar PV Source: Pursuing Clean Energy Business in India. Cleantech AustralAsia, 2008 Technology Examples of Indian Companies Technology Gap or Opportunity Solar PV <ul><li>Moser Baer </li></ul><ul><li>Tata BP Solar </li></ul><ul><li>Selco </li></ul>-Thin film technologies -Grid interactive projects -JVs with PV manufacturers -Module technology improvements
  11. 11. Technology Mapping, India-US Collaborations—Waste to Energy Source: Pursuing Clean Energy Business in India. Cleantech AustralAsia, 2008 Technology Examples of Indian Companies Technology Gap or Opportunity Waste to Energy <ul><li>APTDPC </li></ul><ul><li>Combustion Research Associates </li></ul><ul><li>Energy Developments India </li></ul><ul><li>Mailhem </li></ul>-High rate biomethanation -Incineration -Sanitary Landfills -Financing
  12. 12. Success Story <ul><li>Suzlon </li></ul><ul><li>wind </li></ul><ul><li>1995 </li></ul><ul><li>September 2005, IPO, oversubscribed 46 times </li></ul><ul><li>Today 5 th in world market share, $1.5 B in revenues </li></ul><ul><li>Sold over 3000 MW </li></ul><ul><li>Successful M&As of RE Power Systems AG, Hansen Transmission </li></ul><ul><li>End to end packaging, integration </li></ul>
  13. 13. Sectors with momentum <ul><li>Sectors with momentum: </li></ul><ul><li>Waste treatment & site management </li></ul><ul><li>Management of existing waste infrastructure </li></ul><ul><li>Energy efficiency at plant and building level </li></ul><ul><li>T&D efficiency </li></ul><ul><li>Distributed power generation </li></ul><ul><li>Wind </li></ul><ul><li>Small Hydro Power </li></ul>
  14. 14. Challenges <ul><li>Lack of Coordinated policy </li></ul><ul><li>Market distortions </li></ul><ul><li>Weak or unclear regulatory environment </li></ul><ul><li>Technology-specific barriers </li></ul><ul><li>Lack of access to affordable capital </li></ul><ul><li>Uncertainty surrounding son of Kyoto </li></ul><ul><li>Lack of capacity at all levels </li></ul><ul><li>Fragmented market sectors </li></ul><ul><li>Companies fall into two camps—no middle market </li></ul><ul><li>IP issues </li></ul>
  15. 15. Solutions <ul><li>Consistent national and regional policies </li></ul><ul><li>Policy guarantees </li></ul><ul><li>Level the playing field </li></ul><ul><li>Protection in law </li></ul><ul><li>Investment grade data on RE </li></ul><ul><li>Technology mapping </li></ul><ul><li>Increased R&D collaboration </li></ul><ul><li>New products and Funds and financing arrangements </li></ul><ul><li>Package Solutions </li></ul><ul><li>Innovation in Carbon Finance </li></ul><ul><li>Capacity building for all RE industry participants </li></ul><ul><li>Standardized guides and case studies </li></ul><ul><li>Platforms for knowledge exchange </li></ul>
  16. 16. What may be coming <ul><li>Increasing technology transfer </li></ul><ul><li>Central Renewable Energy law? </li></ul><ul><li>Feed-in tariff for solar? </li></ul><ul><li>Fuel blending standards for both biodiesel (5%) and ethanol (10%) </li></ul><ul><li>Consolidation </li></ul><ul><li>Increased Incubation Programs </li></ul><ul><li>Shift in mentality of SMEs </li></ul>
  17. 17. India Clean Tech Entry <ul><li>2 nd India Clean tech conference in partnership with CII in Delhi, 10-11 July 2008 </li></ul><ul><li>India entry strategies for portfolio companies </li></ul><ul><li>Indian investment banking partner, Yes Bank: </li></ul><ul><li>-Deep understanding of the clean & renewable energy space, </li></ul><ul><li>-Setting up Clean Technology & Energy Fund, </li></ul><ul><li>-Specialized Sustainable Investment banking practice which provides service to the companies in the Clean Technology and Clean Energy space </li></ul><ul><li>-Service & transaction intermediary support to companies generating CERs </li></ul><ul><li>-Buy side advisory services for Financial Sponsors in India </li></ul>
  18. 18. Contact <ul><li>Thank you! </li></ul>Contact: Erin Iping Kuo Jeffrey Castellas Mumbai, India Melbourne, Australia [email_address] [email_address] Mobile: +91 99 2096 5752 Mobile: +61 4 0106 7252

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