Presentations

Risks for Small Hydro Projects - Bhoruka Power has set up several small hydro projects and shared the risks associated.

Financing for Solar home systems - Shri K.M. Udupa, ex-Syndicate Bank has been one of the pioneers in providing rural financing for solar home systems.

Under the aegis of the GVEP Application Plan (GAP) Fund,
IT Power India Pvt. Ltd. had undertaken a capacity building initiative amongst financial institutions and insurers. The project was focused on the potential application of financial risk management instruments for RE projects. This initiative was kick started with a survey across financiers, insurers and project developers to capture information on:

Current RE financing profile;

1. Current RE financing profile;
2. The major risks associated with RE projects as perceived by project developers, insurers and financiers;
3. Familiarity with financial risk management instruments and;
4. Interest in newer financial risk management instruments that could be introduced in the Indian market.

This survey was followed by a workshop held on May 18th and 19th, 2007 in the hotel Sea Princes in Juhu, Mumbai. The workshop was intended to address the risks faced by financiers and project developers in funding renewable energy projects as well as discuss the instruments available to mitigate these risks. It was also attempted to analyze whether the methodologies and instruments used in other countries can be made applicable to the Indian scenario.

The workshop was intended to bring together financiers, insurance companies and project developers from across technologies and projects (grid connected vs. distributed) to address the issues faced by each of these groups. The sessions consisted primarily of presentations by professionals from different sectors such as insurance and banking, which were then followed by a session of questions and answers.

Most of the participants to this workshop appreciated the effort of bringing together the different interest groups. To many of the insurance companies, this workshop was an eye opener as they had no idea about the progress in the RE sector in India as well as in other countries. They were also exposed to the Kyoto Protocol and CDM. Experience sharing by the banks who are already financing RE projects has proved to be beneficial since most of them rarely interact with each other and learn from one another’s experience.

Many of the banks and insurance companies have also got a much clearer picture as to why RE financing has been difficult, during presentations by project developers, IREDA and their discussions.

The workshop has also generated interest in some of the banks that attended it but do not currently finance RE projects. These banks have shown interest in financing wind and solar thermal projects which we believe is a step forward and a positive outcome of this project.

The last stage of the project will deal with the development and establishment of an institutional mechanism to keep such initiatives sustainable and to ensure that there is sufficient information available on the developments in the risk management products for RE projects in other parts of the world.