1. Financing of Energy Efficiency projects A K Gupta National Ag DSM Workshop 18 th January 2016

2. Energy Efficiency Services Limited EESL NTPCRECPFC POWER GRID 100% public owned company Promoted by Ministry of Power, Government of India Board of Directors represented by Ministry of Power and Bureau of Energy Efficiency (BEE) Authorised share capital – Rs. 500 crore

3. Business Areas for EESL Energy Efficiency market potential of INR 1.50 Lakh Crore Existing Business Areas Domestic Energy Efficient Lighting Programme (DELP) Street Lighting Agriculture Demand Side Management (Ag DSM) Building Consulting Areas for Diversification DELP - Tube light MSME Energy Efficient Ceiling Fans Energy Efficient Air-conditioners Municipal DSM (Water pumping) Agriculture Solar Pumping systems Energy Efficient Chillers Smart Grid Tri-generation

4. SectorFY 16FY 17Total Industry -443 Residential 5721,5082080 Commercial Buildings 63238 Municipal Street lights 6142,5893203 Agriculture 20347367 Total 1,2124,9196131 Investment Plan of EESL Note: 1. Industry includes MSME, Smart grid and tri-generation, 2. Residential includes DELP bulbs, tube lights, ceiling fan and AC, 3. Commercial buildings include buildings & chiller 4. Agriculture include solar Ag DSM

5. EESL Business Model On bill financing Upfront charges from customer Rs. 10 Balance in 12 equal months @ Rs. 10 Separate line item in the DISCOM bills, in addition electricity and fuel surcharge Approval from State Electricity Regulatory Commission Escrow agreement – ESCO, DISCOM, Lender and bank Short-term loan to finance

6. EESL Business Model Deemed Savings Demonstration of deemed savings on a sample basis Financial modelling by extrapolating results over entire population Signing of agreement between DISCOM/ ULB and ESCO Payment secured through opening of irrevocable revolving L/C, escrow, bank guarantee, state govt. guarantee

7. Sources of funds International financing Rupee term loan Bonds Commercial papers

8. WWW.EESL.CO.IN| 8 International financing Bilateral / Multilateral Funding NameAmt. (in US$ Mill) KFW272.00 AFD54.00 ADB200.00 JICA154.00 Total680 Cost of borrowing 1.39% - 1.96% p a Secured against sovereign guarantee from GOI Guarantee fees @ 1.2% p a Hedging cost of approx. 6- 8% p a Tenor 12 years (long term) Repayment – Equal semi- annual instalments Moratorium – 3 years

9. Rupee term loan Domestic Financial Institution Terms Name Amt. (INR Cr.) ICICI 200.00 AXIS 125.00 Canara 200.00 Indusind 50.00 United Bank 140.00 Total 715.00 Average cost of borrowing – 10.50% p a Tenor – Medium term (3 to 5 years) Discussion with other banks – SBT, PNB, BOI Financing of OBF scheme/ meet short term working capital requirements

10. Market instruments Long term Bonds Bond issue of Rs. 500 crore in progress ICRA has provided (‘AA ICRA’). In process of obtaining 2nd rating from CARE Tenor – 9 to 10 years (long term) Card rate 8-9% p a Next steps Appointment of Debenture Trustee Appointment RTA Listing on Stock Exchange Issuance of NCDs Short term Commercial papers Tenor 6 month to 1 year Rating for short-term Rate 9-10% p a Issuing & Paying Agent (IPA) Easy to offload Banks (through treasury) can invest in CP; otherwise cannot invest below base rate Stamping required Net amount after deduction is paid

11. Q&A