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Non Recourse Project Finance for Renewable Projects

Non Recourse Project Finance for Renewable Projects. By Hemant Joshi CLP India March 13, 2012. CLP – A Century of Light and Power. CLP Group. CLP India. 2002 Acquisition of GPEC-655MW CCGT 2008 Jhajjar Power (1320MW) awarded 2009 First wind project of 50.4MW

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Non Recourse Project Finance for Renewable Projects

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  1. Non Recourse Project Finance for Renewable Projects By Hemant Joshi CLP India March 13, 2012

  2. CLP – A Century of Light and Power CLP Group CLP India • 2002Acquisition of GPEC-655MW CCGT • 2008 Jhajjar Power (1320MW) awarded • 2009First wind project of 50.4MW • 2011 Total wind portfolio of 630 MW ( 362 MW commissioned) • 1901 Incorporated in Hong Kong as China Light & Power Ltd. • 1903 Commissioned first power station • 1964 Jointly with Esso (now ExxonMobil) signed the first SoC Agreement with HK Govt. • 1979 First HK co to invest in the Mainland • 1998 Reorganized and formed CLP Holdings major expansion in Asia-Pacific begins • 2001 Celebrates 100 years of service 1901 2001

  3. CLP Group – Financial Highlights 1 HK = 6 INR A very strong balance sheet combined with broad technical and geographic spread

  4. CLP’S Progress – 22,841 MW As of 31 Dec’ 2011

  5. CLP’s CLIMATE VISION Interim goal: 30% of generation portfolio from non-carbon emitting sources by 2020

  6. Thanks

  7. India – Generation Growth Story 2002 GPEC (Paguthan) 655 MW (Gas) Jhajjar 1320 MW (Coal) Sipla & Tejuva (Wind -50.4 MW& 100.8 MW)) 2010 Samana – II 2010 (Wind-50.4 MW) 2009 Samana - I 50.4 MW (Wind) 2009 Khandke 50.4 MW (Wind) Narmada (Wind -50.4 MW) Andhra Lake (Wind - 106.4 MW) 2010 Theni 99 MW (Wind) Operating Plants Hara 2011 39.6 MW (Wind) Under Construction CLP India ~ 2605 MW, Operational ~1017 MW A Healthy balance of Conventional and Renewable projects; Leader in Wind Energy in India

  8. CLP India Structure CLP India Private Limited (Gujarat Paguthan Energy Corporation Pvt. Ltd) 100% 100% 100% 100% 100% Jhajjar Power Limited (1,320 MW) CLP Wind Farms (India) Private Limited (477 MW) CLP Wind Farms (Khandke) Private Limited (50.4 MW) CLP Wind Farms (Theni II) Private Limited (49.5 MW) Samana II (50.2 MW) - Operation Saundatti (72 MW) - Operation Hara (39.6 MW) - Operation Theni I (49.5 MW) - Operation Andhra Lake (106.4 MW) – Under Implementation Sipla (50.4 MW) - Under Implementation Tejuva (100.8 MW) - Under Implementation

  9. Wind Financing – Turning a Full Circle Turning a Full Circle

  10. Wind Financing – Why Non Recourse Financing is possible • Stable regulatory regime • Problems of Fuel Security – Coal and natural gas scarcity • Competitive tariffs for Wind • Introduction of GBI Scheme • Tax driven to generation driven • Stable history of operations • Wind Data • Technology • Enforcement of RPO requirements? • High Interest Rate Regime Affecting Wind Projects

  11. Why ECB Financing?

  12. ECB Financing – Current Status Ability to attract ECB Financing is dependent on the Promoter Brand Name rather than the Individual Project Strength

  13. Challenges in Closing a Non Recourse Financing

  14. How to Close a Non Recourse Financing Transaction

  15. Pooled Financing Structure Pooling the cash under the common TRA A is most efficient way

  16. Advantages of Pool Financing Structure • Individual project risk such as operational risk, PPA risk, SEB payment risk will be diversified and reduced. • As a result of diversification, the risk of the variability of the individual projects is considerably reduced. • As all the lenders will be part of the common pool, the cross default risk will be reduced. • Lenders ability to monitor the progress and the performance all the wind assets will be greatly enhanced.

  17. Next Steps • REC Market • Maturity and Stability • Average Pooled Power Cost not uniformly defined • Is this currently Project Financeable….however provides a good back-up • Solar Power Financing • Stability of technology • Stabilization of the tariffs • Rational bidding • Stable regulatory policies

  18. THANK YOU • For more details on CLP please refer: • www.clpgroup.com

  19. Thanks

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