Panel Discussion on Pathways to Sustainable Energy Systems Presented by Umesh Chandra CEO, Signature Group International Limited Lead, Signature Energy practice June 21, 2011

Objective Exploring transformational pathways to sustainable energy systems Questions Can pathways that simultaneously achieve multiple social goals be sustainable? What makes one pathway preferable over others? Policy packages and investments that makes these pathways possible in near-term and mid-term future? Key questions to be addressed

Presentation Overview Brief intro on Signature Energy practice Key features of Sustainable Energy Systems Challenges of Energy Systems Anchors of Energy Systems Financing vs. Sustainability paradigm Scorecard - Number check? My framework proposal for Sustainable Energy Systems

Sustainable Energy Systems Key features Energy access Resource quality and reliability Technology spread Strength of supporting infrastructure Industrial growth Economic development Growth and expansion

Energy systems today Key challenges Reach and coverage Resource imbalance Weak support infrastructure Inefficient capital use Subsidy malady Environmental degradation

Energy System Anchors – Macro view Conventional energy projects will target base demand of energy systems Renewable energy projects will come to fore based on resources available within a local system Energy conservation, energy efficiency and demand side management is driven by need and desire

Financing vs Sustainability Paradigm Sources/Avenues of finance and impact: Developmental financing: Policy framework Institutional financing: Policy implementation/impact investing Project financing: Asset build up Private Equity: Growth and Expansion (misfiring?) Funds et al: Regrouping of assets Others: Fine tuning or stop-gapping Let’s check the numbers!

What do the numbers show? Scorecard GLOBAL INVESTMENTS In Clean/ Renewable Energy US$ 187 billion US$ 243 billion MULTILATERAL DEVELOPMENT BANKS have invested US$21.1 billion in renewable energy and energy efficiency over the time period from 2008 – PROJECT FINANCE of utility-scale renewable energy projects totalled US$101 billion in WORLD BANK INVESTMENTS Total Energy SectorUS$ 8.3 billionUS$ 13.0 billion -US$ 6.3 billion (fossil fuels) -US$ 4.4 billion (coal-based generations) - US$ 3.4 billion (RE & EE) Renewable EnergyUS$ 1.5 billionUS$ 1.6 billion Energy EfficiencyUS$ 1.7 billionUS$ 1.8 billion PE/ VC FUNDS In Clean EnergyPE – US$ 4.1 billion US$ 8.8 billion VC – US$ 2.7 billion PUBLIC MARKET INVESTMENTS In Sustainable Energy US$ 14.1 billion US$ 17.4 billion

Framework Proposal - Sustainable Energy Systems Energy Systems are interdependent at best but are more independent – country focus Energy Sustainability is dependent on: supply vs. demand within the system resource availability vs. optimal utilization enabling policy framework vs. regulatory regime Energy systems are made of subsets/elements for which appropriate financing mechanism is required Energy system sustainability as a closed-loop system Negative loop to make corrections/modifications Positive loop to reinforce and push sustainability agenda All stakeholders have a role to play in ensuring energy sustainability

Thank you Signature Group International Limited Signature Energy practice