1. CONFERENCE ON FINANCING OF SUSTAINABLE LOWCARBON INDIAN ECONOMY PRESENTATION E S Balasubramanian Consultant, World Resources Institute MAY13, 2010

2. BARRIERS IN E.E IMPLEMENTATION  Lack of information on 1. Energy efficiency measures and investments required 2. EE equipments and supply options 3. ESCOS & EE Consultants availability  Resistance to undertake Energy Audit by SME’s despite availability of incentives because of mindset/attitude of entrepreneurs

3. BARRIERS IN E.E IMPLEMENTATION  Lack of awareness & skills of Bank staff to identify and process good EE projects – sensitisation of Bank Officers to EE required  Cost of Energy Audit and interest rates for E.E loans perceived high by SMEs  Lack of credible ESCOs to undertake ESP under shared savings/guaranteed savings model.

4. SUGGESTED FINANCIAL INCENTIVES TO STIMULATE EE MARKET  Continue 50% grant/subsidy for Energy audit to SMEs by IREDA under World Bank programme  Government should consider capital/interest subsidy for EE projects similar to TUF.  Interest Concession by Banks/FIs up to 25bps for clean energy projects/E.E.Projects  Line of credit for financing E.E.Projects at lower interest rate (similar to JICA line of credit of SIDBI)

5. SUGGESTED FINANCIAL INCENTIVES TO STIMULATE EE MARKET  Appraisal of EE projects on the basis of cash flow out of energy savings  Venture capital/Equity financing for ESCOs  A new loan product for financing ESCOs for undertaking Municipal street lighting / pumping EE projects. This loan can be guaranteed by IFC/CGTSI/USAID.

6. OTHER SUGGESTIONS  Whenever power and fuel costs of a unit exceeds Rs. 50 lacs p.a, banks may advise it to undertake energy improvement program.  Sensitize Bank’s officers on EE financing schemes and identifying potential beneficiaries  An interactive seminar for Key Bank GM’s may be organised by IBA as a follow up of three country EE project  IBA may advise member banks to formulate schemes for EE financing based on the model set by five Banks.