1. Indian Solar Power Development: Opportunities By Debashish Majumdar Chairman & Managing Director Indian Renewable Energy Development Agency Limited New Delhi ( India ) Washington DC Nov 5, 2009

2. Contents  Overview: Power & RE Sector  IREDA  Preview: Solar Mission  Opportunities

3. Indian Economy Fastest growing free market democracy 4 th largest economy Average GDP growth @ 8% 2 nd largest Rail network, 334 airports 12 major ports & 187 minor ports 400 Million telephone connections 5 th largest power market Strong IT & Engineering base

4. Current Power Scenario Installed Capacity:150 GW Power Growth: 6% Power Trading: 3% Per capita consumption:700Kwh Transmission Capacity: 21 GW

5. Power Mix Thermal 81,484 MW Hydro 36,917 MW Gas 16,386 MW Renewable 15,141 MW Nuclear 4120 MW

6. Challenges Huge Unmet Demand  Peak Deficit – 12%  Half of population lacks power Energy Security  Dependence upon Imports Low-carbon/ Sustainable Growth  4 th Largest Carbon Emitter

7. RE Imperative Enormous potential Equitable distribution Promotes Energy Security Bridges demand-supply gap Low carbon growth trajectory Provides lifeline energy in rural areas DSM measure in Urban areas Contains urban migration

8. RE Potential & Achievements Sector Potential ( In MW) Capacity As on 30 Sept 2009 Wind4519510464 Small Hydro150002461 Cogeneration50001155 Biomass16881773 WTE270059 Total: 84,77614,912 Solar PV4^ (^) Excluding decentralized systems

9. Policies for Renewable Power The Electricity Act 2003, mandates to: Create competition, protect consumers’ interest & power for all. Facilitate private sector investments Permit stand-alone systems – rural areas Provide open access Determination of preferential tariff Specify minimum percentages for purchase of renewable power.  17 States have announced RE Policy  Future Policy Direction  Introduction of Generation Based Incentives.  Introduction of Penal provisions for not meeting RPOs.  Introduction of Tradable Renewable Energy Certificates.

10. Indian Renewable Energy Development Agency Limited At a Glance

11. Evolution of IREDA 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

12. Be a pioneering, participant friendly and competitive institution for financing and promoting self-sustaining investment in energy generation from renewable sources, energy efficiency and environment technologies for sustainable development. Mission

13. Areas of Operation Sectors being financed: Wind Small & Medium Hydro Biomass Power & Cogeneration Solar Waste to Energy Energy Efficiency & Conservation Bio Fuels/ Alternate Fuels  Project Financing Schemes  Equipment Financing Schemes  Financing Through Intermediaries

14. Highlights Dedicated FI for RE Financing – Unique in the World Specialized knowledge of RE / EE sector Recognized internationally – High Brand Equity Multilaterals/ Bilaterals prefer working with IREDA Perceived as a leader in the sector Profit earning & dividend paying Rated Excellent for FY 2007-08 Expected Rating Excellent for FY 2008-09 NBFC as per RBI Classification ISO 9001:2000 Certified Company

15. Successes Developed RE through innovative financing. Encouraged entry of private sector in RE. Catalyzed market development leading to commercialization of RE Helped in creating capabilities in :  manufacturing  design & engineering  O&M Assisted in framing of conducive RE policies Highest share in RE Financing.

16. Cumulative Performance No. of Projects Sanctioned: 1892 Projects Total Loan Sanctions: 2290 Million US$ Loan Disbursements: 1270 Million US$ Sanctioned Power Capacity: 3616 MW Conventional Fuel Replacement:1.3 mln MTCR/Yr As on 31/03/2009

17. Resource Base Authorized Share Capital: 221 Million US$ Paid-up Capital: 115 Million US$ Net-worth: 193 Million US$ Domestic Borrowings: 172 Million US$ International Borrowings: 205 Million US$

18. International Partners Govt of Netherlands, 1991: 18 Million Dutch Guilders World Bank (1 st LoC), 1993:$ 145 Million DANIDA, 1993 :$ 15 Million Asian Development Bank, 1997:$ 100 Million KfW, Germany (1 st LoC), 1999:€ 61.35 Million World Bank (2 nd LoC), 2001:$ 110 Million KfW, Germany(2 nd LoC), 2008:€ 50 Million NORDIC Investment Bank: $ 50 Million EXIM Bank, USA : $ 50 Million Lines of Credit in Pipeline KfW, Germany(3 rd LoC):€ 19.9 Million AFD (France):€ 100 Million JICA (Japan):$ 100 Million ADB: $ 200 Million

19. National Solar Mission (A quick preview)

20. Aims & Objectives A im: Setting up an enabling environment for solar technology penetration in the country both at centralized and decentralized levels O bjective: Establish India as a global leader in solar energy, by creating policy conditions for its diffusion across the country as quickly as possible

21. Expectation 20,000 MW Solar Power by 2020

22. Expected Policy Enablers (I)  Utility scale power generation (including Roof Top) -Solar specific RPO ( 3% by 2022 ) -Generation Based Incentives (GBI) to reduce impact on tariff  Off-Grid power generation -Capital subsidy for new applications -Soft re-finance facility via IREDA  Low-cost quality Manufacturing -Capital Subsidy for solar thermal (already exists for Solar PV) -Soft loans from IREDA

23. Expected Policy Enablers (II)  Promoting Solar Collectors (Water Heaters) -Provisions under building bylaws -Certification/ rating  Solar Thermal Demonstration Projects -Storage & Hybrid Mode  R&D  Funding under PPP mode for: -Efficiency improvements -Cost reduction -Energy Storage

24. Expected Policy Enablers (III)  Fiscal: - Customs and Excise Duty exemptions on specified materials, equipment and systems

25. Opportunities

26. Opportunity: Solar Manufacturing Low base – 700 MW Duty exemptions 100% FDI permitted Cheap skilled workforce 20 GW market by 2022 (NSM) Single window clearance SIPS scheme for Fab units Dedicated export zones (SEZ)

27. Opportunity: Solar Generation Mission mode approach Attractive tariff (GBI) Tax breaks Low-cost finance Long term PPA Revenue – CDM & REC 100% FDI permitted Best Practices from Wind

28. Investment Opportunity SectorCapacityAddition*Total Cost/MWInvestments UnitMW US $MnUS $Bn Wind10,00020,00030,000 1.0020.00 Solar PV --15,000 3.5052.50 Solar Th --5,000 2.5012.50 SHP2,0008,00010,000 1.008.00 Biomass2,0007,0009,000 1.007.00 TOTAL70 GW 100.00 US$100 Bn Opportunity (*) Estimated Figures

29. India: Investment Opportunities Strong and clear policy framework providing enabling environment. Structures in place to facilitate power trading, open access etc. Power sector growth (5%) yet to catch up with GDP growth rate (8%) – creating market demand. Large supply-demand gap in power sector. Very large potential of RE yet to be tapped. Mature financial markets

30. Advantage IREDA IREDA has emerged as a dominant player and continues to maintain its position in serving RE & EE sectors. Self-sustaining institution, earning profits since inception. Has earned the trust and confidence of prestigious institutions like World Bank, GEF, ADB, KfW etc. Ability to finance wide range of projects in RE & EE sectors.

31. IREDA welcomes you to join hands to create a better tomorrow. Thank you ! Indian Renewable Energy Development Agency Limited 3 rd Floor, August Kranti Bhawan, Bhikaiji cama Place, New Delhi – 110 066, India Email : cmd@ireda.in www.ireda.in

32. National Solar Mission (NSM) ApplicationsUnits201320172022 Grid MW1000400020000 Off-Grid MW20010002000 Thermal Mn m 2 71520 Manufacturing MW/yr1500500010000

33. RE Investments Parameters20072008Growth Total InvestmentsUSD 3.3 BnUSD 3.7 Bn12% VC & PEUSD 133 MnUSD 493 Mn280% Foreign ExchangesUSD 756 Mn-- Domestic BoursesUSD 646 MnUSD 74 Mn(85%) Merger &AcquisitionsUSD 585 Mn -- WindUSD 2.2 BnUSD 2.6 Bn17% SolarUSD 18 MnUSD 347 Mn1800% SHPUSD 135 MnUSD 543 Mn300% Bio-FuelUSD 251 MnUSD 49 Mn(80%) Asset FinanceUSD 2.5 BnUSD 3.2 Bn25%

34. Solar Providence

35. Sun: Worshipped since Ages

36. Solar Advantage for India 300 sunny days in a year 5-7 kWh/m 2 Large scale Solar Thermal Plants SPV providing lifeline energy SPV for Railways, Telecom towers DSM in urban areas  SPV Roof-tops/ Battery charging  Solar Heating & Cooling systems

37. Source: IBM-PLI – Global Investment Locations Database, GILD India: Ideal Investment Destination Business India USA UK China Financial USA China UK India Motor China USA India Poland ICT India USA China UK Electronics China India USA UK Pharma USA China India UK FDI of US$ 35Bn 2008-09