Stakeholders in Biomass Energy Development IREDA Experience

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Stakeholders in Biomass Energy Development -
IREDA Experience
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Renewable Energy Revolution in India and the
Establishment of IREDA.
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Renewable Energy Revolution in India and the
Establishment of IREDA

• Establishment of IREDA
• To promote Renewable Energy Technologies beyond
  the stage of Research, Development and
  Demonstration to Commercialisation.
• To optimize utilisation of Indias vast potential
  for energy generation from Renewables
• To integrate renewable energy into the National
  Energy planning for a balanced energy mix
• To create exclusive institutional frame work for
  financing RE projects
• To operate innovative Financing schemes
• To alleviate the severe power crunch faced by the
  country
• It was to this effect, MNES set up Indian
  Renewable Energy Development Agency Ltd., (IREDA)
  in 1987

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Mission

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

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Objectives

• To operate a revolving fund for promoting and
  developing New and Renewable Sources of Energy
  (NRSE)
• To assist in rapid commercialisation of NRSE
• To assist in upgradation of NRSE technologies
• To extend financial support to Energy efficiency
  and conservation projects / schemes

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Corporate Values

• Customer Friendliness
• Team Work
• Productivity
• Total Quality
• Partnership for Sustainable Development

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Resource Base of IREDA (as on 31.03.2001)

• Authorised Share Capital - 64 USD
  million
• Paid up Share Capital - 48
  USD million
• Internal Borrowings - 125
  USD million
• External Assistance (Tied-up) - 320 USD
  million
• External Assistance(In Pipeline) - 220 USD
  million
• Net Worth -
  83 USD million
• Performance
• Average Dividend/annum - 0.57 USD
  million
• Debt Equity ratio -
  2.56 1
• Earning Per Share (EPS) - 3.13
  USD
• Book value of Share -
  45.45 USD

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IREDA- Performance Highlights

• Profit making from the first year
• Dividend paying
• Declared as Public Financial Institution
• Programmes classified under Socially Oriented
  Sector

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IREDA-Performance Highlights

• First line of credit in renewable energy by GEF
  -World Bank globally
• First line of credit from ADB in renewable energy
• First line of credit from KfW in renewable energy
  
• Celebrated first Decade of Service during the
  year 1997
• Diversified into Energy Efficiency
• Launched first Integrated Global Renewable Energy
  Consultancy Services

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IREDA-Financial Performance(in Million USD)
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IREDAs Green Power Contribution

• Additional capacity sanctioned - 1654 MW
• Energy Savings - 1,324,784 MTCR/Year
• Environmental Impact Abatement by the Projects
  Sanctioned by IREDA

• CO2 - 4,326,490 MT/Year
• CO - 1875 MT/Year
• NOx - 9896 MT/Year
• SOx - 20,490MT/Year
• Particulate - 23,989.74 MT/Year
• Hydrocarbon - 11,184.28 MT/Year

Renewable Power - Green Power
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IREDA - Renewable Energy Vision1997-98 to
2009-2010

• Additional capacity generation of 2993 MW
• Energy Savings to the tune of 976,000 MTCR/Yr.
• Sanctions - 3704.36 million USD, Disbursements -
  3193.10 million USD

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Schemes under IREDA financing

• Project Financing
• Equipment Financing
• Loans for Manufacturing (including Export
  Promotion)
• Energy Centres
• Financial Intermediaries
• Business Development Associates
• Umbrella Financing

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Sectors under IREDA financing

• Solar Energy
• Wind Energy
• Hydro Energy
• Hybrid Systems
• Energy Efficiency Conservation
• New and Emerging Technologies
• Battery Powered Vehicles
• Alternate Fuel (Ethanol production from Biomass /
  Sugar)
• Fuel Cells

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Sectors under IREDA financing

• Bio-Energy
• Cogeneration
• Biomass Power
• Biomass Fuel Processing Systems
• Small Scale Biogas Plants
• Biomass Gasifiers
• High Efficiency Wood Burning Stoves
• Urban Municipal Wastes
• Industrial Waste

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Economics of Renewable Energy(Rs. Crores)
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IREDAs Financing Norms

• Debt Instruments
• Project Financing Schemes
• Equipment Financing Schemes
• Manufacturing Loans
• Quantum of Assistance
• Upto 75 of Project Cost
• Upto 85 of Equipment Cost
• Rate of Interest
• 3 to 14.50
• Moratorium
• Upto 3 Years
• Repayment Period
• Upto 10 Years

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IREDAs Financing Norms for Biomass Power /
Cogeneration sector

• Debt Instruments
• Project Financing Schemes
• Quantum of assistance
• Upto 70 of Project Cost
• Rate of Interest - Upto 4 MW (except Sugar
  Industry)
• 42 kg/sq.cm - 13.50 - 14.25
• 63 kg/sq.cm - 13.25 - 14.00
• 87 kg/sq.cm - 13.00 - 13.75
• Rate of Interest - Above 4 MW
• 42 kg/sq.cm - 14.00 -14.50
• 63 kg/sq.cm - 13.75 -14.00
• 87 kg/sq.cm - 13.50 - 13.75
• Moratorium
• Upto 3 Years
• Repayment Period
• Upto 10 Years

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IREDAs Financing Norms for Biomass Gasifier
sector

• Debt Instruments
• Project Financing Schemes
• Quantum of assistance
• Upto 70 of Project Cost
• Rate of Interest
• Upto 1 MW - 13.00
• From1 - 3 MW - 13.50
• above 3MW -6 MW - 14.00
• Moratorium
• Upto 3 Years
• Repayment Period
• Upto 10 Years

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IREDAs Financing Norms for Biomass Briquetting
sector

• Debt Instruments
• Project Financing Schemes
• Quantum of assistance
• Upto 70 of Project Cost
• Capacity
• Plant Capacity of 500 -1500 kg / hr
• Rate of Interest
• 12.00
• Moratorium
• Upto 2 Years
• Repayment Period
• Upto 10 Years

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Bio Energy (As on 31st March,2001)

• Cumulative sanction of 234.43 USD million
• Cumulative disbursements of 125.60 USD million
• Sanctioned Capacity of 597 MW

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IREDAs Cumulative achievements in Bioenergy
Sector
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International Assistance for Bagasse based
Cogeneration

• International Assistance Mobilised
• Asian Development Bank - 60 million US
• Committed - Full
• KfW, Germany - 45 million DM
• Committed - Full
• Assistance in pipeline
• OCEF, Japan - 25 million US

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IREDAs New Initiative to High Energy Efficiency
Cogeneration in Sugar IndustryA comparative
statement of IREDA funded typical Cogeneration
project
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Key factors for selection of Biomass Energy
Projects

• Applicant Factor
• Legal status
• Credit Worthiness
• Applicant experience
• Biomass Factor
• Source of Biomass (Captive, Biomass Fuel depot)
• Biomass availability in command radius
• 100 availability of Biomass within 50 kms radius
• Biomass Heat value
• Biomass Characteristic
• Biomass Fuel Cost

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Key factors for selection of Biomass Energy
Projects

• Project Factor
• Capacity of Project
• Mode of sales of Power
• Promoters contribution
• Project cost per MW
• Project implementation (EPC Spilt)
• Security Offered
• Cost of generation
• Multi Fuel Firing
• Obtaining of all Statutory Clearances from
  Governmental/State Governmental Agencies

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Project Implementation Structure
Equity investors
EPC Vendor
Net cash flow
EPC contract
Project company
PPA
Equity Funds
Power Purchaser
Fuel Supplier
payments
Fuel Supply Agreement
Debt Funds
Lenders
Debt Service Payments
O M contract
Operator
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Role of Stakeholders in Biomass Energy Development
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Role of Stakeholders in Biomass Energy Development
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Barriers in commercialising Biomass Energy
Projects

• Technical
• Diverse Biomass resources and possible Biomass -
  specificity of technologies and devices.
• Low energy density and large bulk
• Seasonality , particularly in case of
  agricultural residues
• Localized price sensitivity due to relatively
  high cost of transportation associated
  vulnerability of Bio-energy projects
• Inadequate Technical, Managerial skills and
  Trained manpower
• Inadequate Technology, design, development of
  Biomass handling, storage, transportation and
  retrieval system
• Perception of bio-resources as traditional (low
  tech) fuels

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Barriers in commercialising Biomass Energy
Projects

• Financial
• Reluctance on the part of All India FIs to fund
  Bio Energy projects
• All India FIs demand a high Debt Equity ratio
  (11) for funding Bioenergy projects resulting in
  higher Promoters contribution for Biomass Energy
  projects
• Limited Domestic and International funds for
  Biomass Energy Projects

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Barriers in commercialising Biomass Energy
Projects

• Utility / SEB related
• SEB are reluctant to buy power from Biomass
  Energy Projects
• There is no standard long term PPAs with
  provision for escalation of Power purchase price
• There is no assurance to buy power any time of
  the year and timely payment
• There is no cost sharing with developers for
  installation of Transmission line/ grid
  evacuation equipment
• Delay in creation of evacuation facilities
• Limited options for utilisation of surplus power,
  as utilities are monopolistic
• There is no compensation for grid fluctuations /
  failure by SEB
• No provision for tripartite agreements, giving
  first charge on Power Purchase Payments to term
  lender

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Promotional Initiatives

• Publishes IREDA News
• Conducts Information Dissemination Campaigns
  through Electronic/ Print Media
• Conducts Business Meets, Seminars, workshops,
  Entrepreneurship Development Programmes etc.
• Encourages rural development, self-employment and
  self-reliance through decentralised NRSE
  programmes
• Provides special concessions for Projects set-up
  in North-eastern States, hilly areas, islands and
  deserts areas and also to Women, Ex-Servicemen,
  Physically Handicapped and Weaker Sections

Declare Freedom from Grid Power
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National Networking

• Confederation of Indian Industry (CII)
• Federation of Indian Chambers of Commerce
  Industry (FICCI)
• Associated Chambers of Commerce Industry of
  India (ASSOCHAM)
• Indian Institute of Technology
• State Nodal Agencies
• Non Governmental Organisations (NGOs)
• Technical Consultancy Organisations (TCOs)
• Financial Institutions

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Thrust Areas

• Rural Development
• Self Reliance
• Environment Friendliness
• Women Participation
• Decentralised Grid Power

Promoting Freedom from Fossil Fuels
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Recommendations

• More small capacity Biomass Energy Projects
  should be promoted
• Producing an Optimal mix of Food, Fuel, Fodder,
  Fiber, Fertilizer, Forest Products and
  Financially rewarding crops
• Bio-energy technology should be accepted as
  environmentally sustainable route of energy
  generation
• Biomass assessment to determine the feasibility
  of Biomass based power generation
• Technology assessment for Biomass collection and
  storage, its preparation for boiler feed, boiler
  design, etc.,
• R D in respect of Biomass drying, storage,
  compaction and combustion to optimize energy
  efficiency
• A long term policy and its effective
  implementation by Central and State Governments
• Governments should take larger initiatives
  towards coverage of initial technology
  introduction risk so that the industry develops
  and matures. Legislative measures to ensure
  Biomass routing through appropriate technological
  processes may be desirable
• Specialized Bank/ FIs like NABARD, IREDA and
  rural Banks should join hands in promoting
  Biomass utilisation projects

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Looking Beyond...

• Much more remains to be done and IREDA invites
  your participation in the RENEWABLE ENERGY
  MOVEMENT. Time is running out and soon there will
  be nothing left to burn but the earth itself.

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Thank You