Tata Cleantech Capital Limited (TCCL) Overview on Energy Savings - - PowerPoint PPT Presentation

Tata Cleantech Capital Limited (TCCL)

Overview on Energy Savings Company (ESCO)

Date: 20-06-2018

• Tata Group
• Brief on sustainable energy
• Tata Cleantech Capital Limited (TCCL) – Introduction
• TCCL’s Offerings
• Project Evaluation Mechanism
• Case Study – ESCO project at Hospital

Index

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Tata Group : Sustainability and addressing Climate change

Tata Group is India’s largest business group with 66% equity of the principal investor holding company vested with private philanthropic trusts Sustainability and giving back to society is integral to the business philosophy of the group Climate change steering committee set-up by the group in 2008 for articulating a climate change policy for all Tata group companies Climate change agenda was further expanded with setting-up of Tata Sustainability Group (TSG) in 2014, which is a group- level resource working with Tata companies across the world in the sphere of sustainability Tata Group became part of Indian Prime Minister's low carbon committee and member in the Steering Committee of 'Caring for Climate' initiative of the United Nations Global Compact and United Nations Environment Program Several Tata companies like TCS, Tata Steel, Tata Chemicals, Tata Power and Tata Global Beverages Limited have been recognized and listed in the Carbon Disclosure Leadership Index 2 of 11

• Carbon footprint estimated and carbon strategy developed for 51 Tata Group companies
• App. 400 champions have been trained across the group to drive and accelerate the climate change agenda
• About 200 water champions also trained across the group
• Key climate change initiatives in Tata Group:
• Most Tata companies have adopted energy-efficient systems such as lighting, variable frequency drives for motors, star-rated

appliances and waste heat recovery systems

• ~20% of Tata power portfolio is from renewable sources; renewable energy (wind and solar power) portfolio stands at ~2.2

GW, making Tata Power one of the largest renewable energy players in India

• Greening of Tata owned buildings, including the headquarters at Bombay House - the first heritage building in India to be

certified with an IGBC Gold Rating

• Creating green data centres by Tata Communications and TCS
• Awareness drive through Energy Clubs in schools covering 5.2 million students
• Water foot printing of 12 major Tata manufacturing facilities carried out as Water Footprint Assessment (WFA)

methodology and water / waste water management strategy developed

• Incorporation of Tata Cleantech Capital Limited, in Joint Venture with IFC, Washington, to fund green initiatives

Tata Group : Climate Change Initiatives

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TCCL is the first of its kind Clean tech focused Infrastructure Finance Company (IFC) registered with Reserve Bank of India, established as a JV between Tata Capital Ltd and IFC, Washington, a member of the World Bank Group

TCCL : Introduction

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80.5% 19.5%

Developed strong expertise and credibility over the years

• Participated in funding of ~ 4.83 GW Renewable Energy Generation since inception – saving over 7.7 million tons of CO2 emission

annually.

• Funded projects under Energy Efficiency and water space.
• 139 contracts executed out of which 53 contracts have already been repaid.
• As on April 30, 2018 aggregate portfolio of ₹ 3,392 crore (USD 514 million) in cleantech sector with Nil over-dues / NPA
• AA+ rating by CRISIL and CARE
• Executed a number of marquee assignments in financial and clean-tech advisory

• Tata Group
• Brief on sustainable energy
• Tata Cleantech Capital Limited (TCCL) – Introduction
• TCCL’s Offerings
• Project Evaluation Mechanism
• Case Study – ESCO project at Hospital

Index

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TCCL Offering’s : Financial Products available for Energy Efficiency Company’s

6 of 11 Short Term Loans Project Finance LOC backed Non Fund Products Working Capital Loans Customized Anchor based Vendor Financing Programs. Loan backed by SIDBI PFRS Schemes Leasing Solutions

• Tata Group
• Brief on sustainable energy
• Tata Cleantech Capital Limited (TCCL) – Introduction
• TCCL’s Offerings
• Project Evaluation Mechanism
• Case Study – ESCO project at Hospital

Index

1 of 11

TCCL : Project Evaluation Mechanism

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ESCO

• Financial Viability of

Underlying Project.

• Promoter / Group

Background of ESCO’s

• Credential of KMP (Key

Management Person)

• Securitizing /

Collateralizing of the project asset

• Credit Rating Report

Contract

• Validation of Assumptions

taken while designing the payback period.

• Deemed Generation

Clause.

• Legal Strength of

Underlying Contract.

• Termination Mechanism

and protection of Lenders Rights under the agreement.

• Payment security

mechanism Counterparty/Client

• Promoter / Group

Background of ESCO’s.

• Consumption History

(Detail about the size of premises, Occupancy rates , Seasonal variances , etc.).

• Credit worthiness through

Financial Statement.

• Current Tariff Analysis.
• Credit Rating Rational.
• Importance of the project

for the counterparty.

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Expectations from ESCO’s

• Ensure financial viability of

the project.

• Deemed generation
• Underlying contracts legally

binding.

• Termination mechanism

well defined.

• Avoid Aggressive bidding.
• Approach well in time.

Level of Investment

• Varies from Project

to Project

• TCCL exposure is

related to the Guidelines from RBI

Turn-around-time & Commercials

• Typical TAT is Upto 2- 3

weeks from start of the Application till the final stage.

• Strictly basis risk and

return matrix

TCCL : Project Evaluation Mechanism

• Tata Group
• Brief on sustainable energy
• Tata Cleantech Capital Limited (TCCL) – Introduction
• TCCL’s Offerings
• Project Evaluation Mechanism
• Case Study – ESCO project at Hospital

Index

1 of 11

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Case Study

‘A’ Rated Reputed hospital  Five Year Contract including O&M.  Deemed Generation Clause.  Well defined and Agreed Termination Mechanism.  Payback period of 3 years  Ownership of the equipments installed with ESCO. Payment security revolving LC.  Loan Tenor of 2.5 years including commissioning period of 3 months.  Loan amount of 70% of project cost  Project Assets charged to Lenders  Personal Guarantee of ESCOs promoters.  3 months EMIs as DSRA  Ownership of the equipments installed with ESCO.  Tripartite Escrow setup

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