Based on the clean energy commitments made under the Nationally Determined Commitments (NDCs) as part of The Paris Agreement (2015), the South Asian countries will require a cumulative investment of $2.6 trillion till 2030. Such quantum of investment has no past precedence, and conventional sources of capital are inadequate to meet this huge investment requirement. SAREP plans to plug-in this investment gap and mobilize investment in the clean energy space by providing technical assistance, organizing capacity building workshops and developing collateral for thought leadership, and thereby support the achievement of the envisaged clean energy targets for SA countries. SAREP proposes support investments in clean energy by developing new business models, preparing strategies to enable decarbonization, facilitating use of new and innovative financing instruments and supporting capital raise initiatives.
Key Interventions
- Developing financing strategy/roadmaps for public undertakings like NTPC Limited, Druk Green Power Corporation (DGPC), Hydroelectricity Investment and Development Company Ltd. (HIDCL) etc.
NTPC Green - SAREP is working with NTPC Green on a Green Bond Framework which will help in raising green bonds for its RE addition target.
DGPC - In April 2024, DGPC unveiled their financing strategy report that was developed with SAREP’s support. The strategy outlines a comprehensive plan to bolster Bhutan's renewable energy portfolio by 13.35 gigawatts, focusing on its potential for hydropower as well as solar energy generation. The financing strategy will be instrumental in optimizing the cost of capital, ensuring availability of adequate capital for achieving the targets and identifying changes required in policy and regulatory framework. As part of the next phase, SAREP will support DGPC in implementing the strategy.
- Creating ESG framework for financing institutions like Power Finance Corporation (PFC) - Creating ESG framework for financing institutions like Power Finance Corporation (PFC) - SAREP is assisting PFC in embracing ESG principles across its business operations. The program has supported PFC in conducting materiality assessment survey across its key stakeholder groups, in order to identify material ESG topics that PFC should focus on. The survey results are expected to guide PFC in development of an ESG policy. SAREP is also assisting in capacity building in the ESG domain for PFC's employees. To that effect, SAREP organized two ESG workshops for PFC employees in April 2024.
- Design and setup of innovative debt and equity funds like climate smart debt fund and sustainability equity fund.
- Setup of investment mobilization platforms and organizing investor summits - SAREP, in collaboration with Impact Investors Council (IIC) organized the Clean Energy Investment Summit in Mumbai on April 25, 2024. The summit focused on facilitating investments in renewable energy, e-Mobility, energy storage, energy efficiency, and green hydrogen sectors. The summit attracted 28 investors from various sectors, including private equity, venture capital, alternate funds, and development financial institutions. Their high level of interest in the clean energy sector resulted in over 180 meetings to explore potential investment opportunities with 21 companies seeking cumulative investments of approximately US$260 million.
The E-mobility Investment Mobilization Platform was held on March 15, 2023, in Mumbai which brought together investors and investees on the same platform, facilitating discussions. The event included a panel discussion, and one-to-one match-making sessions between 27 investors and 24 investee companies. A total of 150+ such conversations were facilitated by SAREP.
- Supporting transactions for public and private entities like DGPC, Alt Mobility, Lithium, Ziptrax, TheeGo.
- Developing green public procurement frameworks for public entities in South Asia like Indian Railways (IR), Energy Efficiency Services Limited (EESL)
- Regional dialogue and sharing of best practices in South Asia on green public procurement.
Green public procurement is an approach to purchasing goods and services while prioritizing environmental considerations. USAID, through the SAREP program, aims to work with partners in the South Asia region to integrate and scale Sustainable/ Green Public Procurement (SPP/ GPP), in line with the objectives of the specific country.
On February 27, 2024, SAREP conducted a virtual regional workshop on Green Public Procurement bringing together public entities from various countries to discuss the integration and scaling of GPP practices, marking a significant step towards a sustainable, low-carbon future. The workshop included sharing of global GPP best practices and in-depth discussions on country-specific priorities and experiences from Bangladesh, Bhutan, Nepal, Sri Lanka, Maldives, and India.
The workshop facilitated knowledge sharing and capacity building and also set the stage for future initiatives, including the development of roadmaps, policy integration, and pilot projects in green procurement.
- Structuring PPPs for electric buses, Round-the-clock (RTC) power, electric charging infrastructure, asset monetization, and smart metering
- Innovative financing instruments like InvITs, green bonds, Alternative Investment Funds (AIFs)
- Developing toolkits for financing institutions to appraise projects - HIDCL – SAREP has been providing technical assistance to HIDCL, Nepal in capacity building and training on new and innovative financing instruments, development of project & entity appraisal toolkits for hydro and solar projects, providing training and handholding support on toolkit, revising HIDCL’s existing business plan and preparation of business model for HIDCL. The customized toolkit will help HIDCL evaluate the proposals received for financing solar projects. The solar toolkit is designed to introduce objectivity in the existing process of HIDCL, speed up appraisal process, enhance accuracy and reduce risks. Using the solar toolkit, the HIDCL board has , has approved equity investments of USD 1 million cumulatively, in two solar projects of combined capacity of 25 MW In the near future HIDCL expects to evaluate proposals using this solar toolkit and doing investments of NPR 5 billion.
- Training of FIs in technologies like green hydrogen and e-mobility - Green Hydrogen - The Hub (that operates under USAID’s SAREP) collaborated with the Ministry of New and Renewable Energy (MNRE), Government of India, to organize a 3-part online Masterclass series on ‘Financing Green Hydrogen in South Asia’ in November and December 2023. It covered topics such as the basics of Green Hydrogen, costing and economic implications, international developments in the sector, contractual considerations, and best practices in risk management. Read more about the masterclass and access the resources here.
E-mobility – USAID’s SAREP and SAGE conducted 3-part online Knowledge Series on EV Integration- Challenges and Way Ahead for Utilities in South Asia in March and April 2024. The Knowledge Series webinars enabled participants to understand the impact of EV charging on grid, charge management techniques and smart charging technologies, managing future load from EV charging, alternatives to grid upgrades, consumer charging behavior, and tariff design.
- Asset monetization and new PPP models - Continuing the effort to strengthen clean energy deployment and utility modernization, SAREP in collaboration with the Ministry of Power, conducted a capacity-building workshop for the officials of Madhya Pradesh Power Transmission Corp. Ltd. (MPPTCL) in Jabalpur, Madhya Pradesh, in October 2023. The sessions emphasized capital recycling by monetizing existing assets, which will help overcome investment constraints in intra-state transmission. Participants discussed the guiding principles of the various asset monetization models, including AOMT notified by the Ministry of Power for monetization of transmission assets, different countries’ approach and business models being deployed by them and associated risks and challenges. The broader impacts on consumers and financial implications of asset sales were also covered. Read more about the workshop here.
- Mobilized investments of more than $3 billion in clean energy space.
- Developed financing strategy of $45 billion for NTPC Green.
- Payment Security Mechanism launched for deploying 38,000 e-Buses in India under the US-India joint collaboration.
- Closed a debt transaction of $175 million in Bhutan.
- Developed hydro and solar toolkits for HIDCL. Projects worth $1 million (25 MW capacity) approved (as of January 2024).
- $6 million transaction closed with e-mobility investment mobilization platform.
- Training 170 participants from 35 organizations and 5 countries in green hydrogen.
- Tender bids notified for 3,825 e-Buses under PM eBus Sewa.
- RTC power for IR - tender awarded for 900 MW, tender for additional 1.4 GW issued.