Introducing Management Team & Associates

2. Introducing Management Team & Associates S3IDF Technical Financial Management Team, Bangalore Infrastructure Development Finance Company, Chennai Bharathiya Vikas Trusts (BVT, Manipal) / Sahayadri Energy Systems (SES, Bangalore) / Sun Min (Chennai) Sowparnika Bio Energy (Puttur) / Shree Kshetra Dharmasthala Rural Development Project (SKDRDP, Belthangadi)

3. Project Philosophy • Modern Energy Services Critical for Poverty Alleviation • Inferences from work of S3IDF Founders re: Small Scale pro-poor RE/EE projects • Cost-effective solutions are possible if : • RE/EE players operate under commercial norms • FI’s BAU practices are modified with innovative financing • Critical problems to market penetration are more institutional and financing than technical • In US & elsewhere individuals and institutions willing to support such projects

4. Our Unique Value Proposition for pro-poor Small RE/EE Investments Study would result in : • Innovative Social Merchant Bank approach • Identification, demonstration, implementation of models • Development of underlying processes, systems for organisation and management • Mechanisms to support, assist & guide new such investments. Project Viability Investor Capability

5. Planned Activities to Achieve Outcome S3IDF will provide : • Pre-Investment/Project Identification • Complete feasibility for priority projects • Innovative Financial Support • Implementation and Operations Assistance • Post Investment Monitoring and Evaluation • Supporting Studies on related issues • Disseminate the knowledge • Raise Social and Environmental Investor Funds

6. Expected Outcomes • A new financing fund/window for pro-poor small-scale RE/EE and investments; • New/innovative financing models; • Implementing mechanism for multiple pro-poor RE/EE investments; • Developing SME business models; • Evolving models of innovative financial agreements / arrangements; • Disseminating outcomes/results and lessons; • Mobilising international financial resource.

7. Relevance for India Today • Electricity Act 2003 and National Electricity Policy mandate : • All households in India to be electrified in 5 years. • Minimum lifeline consumption of 1 unit of electricity / household /day. • Per capita consumption to increase to 1000 units by 2012. • Priority attention to electrification of Dalit bastis and tribal areas. • This gigantic task needs innovative approaches towards : • Decentralized distributed generation. • Cost-effective projects/technologies. • Use of all locally available resources for power generation. • Empowerment of consumers as partners. THE PROPOSED PROJECT WILL HELP IN FINDING COST-EFFECTIVE SOLUTIONS FOR ALL THESE ISSUES

8. S3IDF Approach & How Poor Benefit • A Social Merchant Bank Approach • How the poor benefit: • As users of infrastructure services from pro-poor projects – to increase productivity and income; • As employees in SME(s) in infrastructure service industries; • As beneficiaries who are enabled to set up low-cost infrastructure service industries.

9. S3IDF Approach - Innovative Financing and Structuring Mechanism • New/Innovative Financing: • Approach is common and Main stream in large investments but new to small RE/EE transactions • Mechanisms for Investment Structuring of Pro-poor investment and their Risk Management: • Guarantees or other credit mechanisms to overcome collateral constraints; • One or more financing support types - debt (primary and/or secondary position) and/or equity- that is “gap filling” and “deal enabling”. This menu is also employed to help small equipment players who are critical to these investment deals; • Equipment supplier-financing; • Budget intercepts; • New ownership and/or operations structures which lower costs and make energy services viable.

11. Project Cycle and Need for grants Project Stage Project Identification Project Prioritisation Project preparation Feasibility analysis Seeking Financial collaboration Implementation Construction Operation phase Monthly Evaluation Dissemination of Knowledge Inputs needed Technology Data Base Access to Sources of supply Project Analysis Skills Due Deligence Skills Contacts Logistics Negotiation Skills Management Capability For project construction Effective Management Capability Requisite Skills Analysis & Conceptual Skills Insti- tutions S3IDF & associations ASCI S3IDF FIs Other NGOs Project operator Banks/FIs Project Operator, S3IDF Associates S3IDF S3IDF Nature of assistance grant/loans Grants : - user risk-averse - results can reduce costs of other Similar projects Cooperation Sympathy guidance Grants for free S3IDF Assistance. Loans, guarantees Interest subsidy Commercial financial assistance Grants Grants

12. Requesting PDFA Funds ($25,000) For Detailed Project Preparation Indicative project cost at the concept level (To be refined under PDFA)

13. 3 S IDF: A Schematic of Envisioned Flow of Funds Grant/Tax Deductible Monies from Individuals Local Bank & Other and Institutions Contingent Flow Financial Institutions (restricted, unrestricted & Revolving Fund Corpus (For partial guarantees) (e.g. leasing company) matching) Debt, equity, etc. Debt, equity, etc. • Pool of Funds for S3IDF and S3IDF – South • Asia Affiliate Operations • Pre-investment • Monitoring & Evaluation and Lessons Dissemination • Arranging co-financing and other support • Fundraising • Corporate management and reporting to non-profit regulatory authorities Re-flow Re - flow The Project (And owner/operator) Tariffs, fees Services Financing and other assistance from government and other Customers Soft Loan/Contingent Grant Funds programs (May also be owners) From Development Finance & Other Institutions (Foundations)

14. Types of Projects currently under the S3IDF Portfolio and Pipeline • Solar Photovoltaic for Charging Stations & Small Lighting systems • Solar PV-Grid Hybrid • Biogas for cooking and power generation • Small Hydro • Drying and other post harvest technologies • Bio fuels for power generation • Last mile electricity supply for both rural and urban • Water and Energy Nexus – Improving efficiency at both energy and irrigation • Water Supply – Potable and Irrigation • Biomass Gasifiers • Transportation and Telecommunications

15. Indicative Examples of RE and EE & Linked Productive-Use Investments • Village/community scale; • RE/EE based Energy Service Company (ESCO) / Group of villages; • Household/small&meduim enterprise

16. Summing Up • The present request from PDFA funds is for a grant to prepare a detailed project report. • If approved, the project report will be prepared in detail as per GEF funding requirements. This would again be evaluated on merits. • If approved, it will result in implementing a large number of small RE/EE projects each will contribute to sustainable energy development, local employment creation with least environmental adverse impact. • The implementation will be through new innovative financing procedures of mobilising capital, risk minimisation and well-designed operating procedures. • The project will be continuously monitored by the management team and experience would be shared with everyone interested in RE/EE projects. • New funds can be mobilised from national and international sources and thus trigger a accelerated development of small RE/EE projects. THANK YOU