RENEWABLE ENERGY SECTOR IN ASIA-PACIFIC SPECIAL FOCUS ON INDIA Q4 2020 TABLE OF CONTENTS

1 Background

2 Overview of the Asia-Pacific Renewable Energy Sector

3 The India Opportunity

4 Our Offering

1 1 Background THE SUSTAINABLE DEVELOPMENT GOALS (SDGs) AND ELECTRICITY GENERATION Dependence on fossil fuels for electricity generation is adversely affecting the SDGs. A global shift towards renewable energy(1) is being witnessed as a sustainable model for electricity generation

◼ The Sustainable Development Goals (SDGs) adopted by the United Nations has led to articulation of clear actions for a sustainable world underpinned by responsible consumption and production ◼ Governments are required to meet targets assigned by the United Nations and to frame adequate regulations and policies to drive behavior at a corporate and societal level ◼ Current dependence on fossil fuels for electricity generation is adversely affecting the realization of at least six SDGs

SDGs Impacted by Electricity Generation Other SDGs

◼ International organizations and local governments around the world have shifted their focus to decarbonization of the grid and promotion of electricity generation from renewable energy sources ◼ The Asia-Pacific region(2), home to some of the fastest growing and most populous countries globally, has seen the highest growth in electricity generation, with coal being the predominant source ◼ The region is the largest contributor to global carbon dioxide emissions and has witnessed significant activity to promote renewable energy

Note: (1) Renewable energy includes hydro, solar, wind and biopower (2) For the purposes of this report, the Asia-Pacific region has been assumed to include India, China, countries in South-East Asia, Australia and the countries in Oceania 3 Source: News Reports and GCA Analysis OVERVIEW OF ELECTRICITY GENERATION The Asia-Pacific region has witnessed the fastest growth in electricity generation; most of the growth has been fueled by coal-based electricity generation

Regional Growth in Electricity Generation (2016–19)

Africa 30,000 ◼ The Asia-Pacific region has witnessed the fastest growth in 25,574 CAGR

(1) electricity generation to address the demand arising from: 23,396 870 Middle East 25,000 798 1,265 2.9%  Rapid economic growth that has fueled the industrial and 1,165 3,993 20,000 commercial demand for electricity Europe 3,857 1,329 2.8% 1,303  Need to provide electricity access to the large population 15,000 5,426 1.2% base (China, India and Indonesia are among the top five most South and Central 5,333 America 0.7% populous countries in the world) 10,000 North ◼ Most of the countries in the region have lower per capita America 0.6% 10,940 12,690 electricity consumption compared to the countries in Europe and Asia-Pacific 5,000

ElectricityGeneration inTWH 5.1% America, thus providing ample headroom for future growth World 0  Example: India-1150 KWH(2), China-4280 KWH, Thailand-2870 2016 2019 KWH, US-12830 KWH, Germany-6960 KWH

Share of Electricity Generation by Source (2019)

100% ◼ Fossil fuels like coal, oil and natural gas have (3) been the primary source of electricity generation 80% Others in most of the regions of the world Hydro 60% ◼ The Asia-Pacific region has primarily been Nuclear dependent on coal-based electricity generation 40%

Coal because of the large reserves of the resource Percentage Percentage (%) Natural Gas 20% ◼ Coal generates the largest amount of carbon Oil dioxide per unit of electricity produced 0% compared to other fossil fuels like oil and natural Renewables North South & Europe Middle East Africa Asia-Pacific America Central gas America  On an average,78%-80% more than natural Note: (1) TWH: Terawatt-hour gas and 35%-40% more than oil (2) KWH: Kilowatt-hour (3) Others includes sources like tidal energy and geothermal energy 4 Source: International Renewable Energy Agency, British Petroleum Statistical Review of World Energy 2018 and 2020, News Reports and GCA Analysis IMPACT OF FOSSIL FUEL LED ELECTRICITY GENERATION Dependence on fossil fuels like coal, oil and natural gas for electricity generation has adversely affected the environment; as the largest contributor to global carbon dioxide emissions, Asia-Pacific is a region of focus Regional Carbon Dioxide Emissions

40,000 34,008 34,169 ◼ Globally, there has been a rise in greenhouse gas emissions over the years Africa 32,936 33,279 (carbon dioxide approximately accounts for 72%-75% of total greenhouse Middle East 30,000 gas emissions) (1) CIS ◼ Electricity generation is one of the largest contributors (27%-30% globally) 20,000 Europe to this rise due to the current dependence on fossil fuels

South & Central America Dioxide ◼ Around 60% of the electricity in the Asia-Pacific region is generated from 10,000 coal, making the region the largest contributor to global carbon dioxide North America emissions Asia-Pacific Million Tonnes of Carbon 0 ◼ Apart from air pollution caused by carbon dioxide emissions, electricity 2016 2017 2018 2019 generation from fossil fuels has other negative effects like water pollution, noise pollution and land degradation

Other Adverse Effects of Fossil Fuel Based Electricity Generation

Water Pollution ◼ Dust present in water used to clean coal contaminates water bodies ◼ Hot water (used to cool boilers), if released into water bodies, raises the temperature of the water body and adversely impacts its flora and fauna

Noise Pollution ◼ Power plants emit high levels of noise due to the use of equipment like crushers, turbines and boilers

Land Degradation ◼ Disposal of fly ash from power plants destroys soil properties

Note: (1) The Commonwealth of Independent States (CIS) consists of 9 member states: Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan and Uzbekistan Source: British Petroleum Statistical Review of World Energy 2018 and 2020, News Reports and GCA Analysis 5 Overview of the Asia-Pacific 2 Renewable Energy Sector RENEWABLE ELECTRICITY GENERATION IN KEY(1) COUNTRIES Though there has been ongoing renewable energy capacity addition, significant headroom for increase in renewable energy adoption exists in the Asia-Pacific region Installed Renewable Generation Capacity (GW) 17 3 28

205 326 JAPAN INDONESIA Total-789 Total-97 (2019) CHINA (2019) 4 1.84 62 210 0.20 Total-8 THAILAND 10 2 2

SOUTH KOREA SOUTH (2019) 45 0.08 4 3 2 5.62 Total-17 Total-12 35 Total-128 (2019) (2019) INDIA (2019) TAIWAN 2 11 38 AUSTRALIA 0.4 3 1 2 1 8 6 1 VIETNAM Total-7.5 Total-8 Total-29 Total-25 (2019) (2019) 13 (2019)

(2019) 4.1 0.84 MALAYSIA 6 18 7 Hydro Wind Solar Biopower Adoption of Renewable Energy (2019)

40.0% 34.7% 32.4% ◼ Headroom for growth 27.0% 30.0% in adoption of 21.0% 20.0% 18.0% 18.0% 20.0% 12.0% 10.0% renewable energy 6.9% 6.0% 10.0% 2.0% exists in Asia-Pacific

Shareof 0.0% ◼ This is expected to

Renewable Renewable in European American China India Thailand Japan Australia Indonesia Vietnam South Taiwan Malyasia

Generation (%) TotalElectricity Union Countries Korea further boost Countries renewable energy Note: (1) For the purposes of this report, countries with significant renewable energy capacity addition plans have been included capacity addition Source: International Renewable Energy Agency 7 TARGETS FOR GROWTH IN RENEWABLE ENERGY ADOPTION IN KEY COUNTRIES Individual countries have set targets to increase the share of renewable energy in electricity generation

Targets Key Trends / Enablers ◼ 100% Foreign Direct Investment (FDI) is allowed in the renewable energy sector in India without any prior approval from the government (automatic route) Renewable Energy Renewable Energy India(1) 133 226 338 ◼ Various policy initiatives by the government aim to Installed Capacity (GW) Installed Capacity (GW) create an enabling environment for addition of 2020 2022 2027 renewable energy installed capacity by incentivizing project developers and building transmission infrastructure ◼ China has achieved its earlier 2030 target of 20% and is making a shift from feed-in tariff system to Electricity Generation From Renewable 27% 35% competitive bidding China Sources As a Share of Total ◼ Renewable energy projects are classified as Share in 2019 Target for 2030 ‘encouraged’ and do not require any minimum domestic participation ◼ The Marine Renewables Energy Act, implemented in 2019, is expected to boost offshore wind projects. The Act will allow long-term exclusive usage of sea areas Electricity Generation From Renewable 18% 24% for such projects Japan Sources As a Share of Total ◼ The country is also planning to introduce a feed-in Share in 2019 Target for 2030 premium tariff system. It is expected that renewable energy generators would be paid a premium over the wholesale prices determined through a spot market ◼ Several utility scale battery storage projects are being Electricity Generation From Renewable developed in order to ensure grid reliability 18% Sources As a Share of Total 48% Australia ◼ Several innovative funding structures and new Share in 2019 Target for 2030 financing terms are being introduced in the renewable energy sector

Note: (1) In India, the targets are set for the financial year: April to March Source: International Renewable Energy Agency, Sector Reports, News Reports and GCA Analysis 8 TARGETS FOR GROWTH IN RENEWABLE ENERGY ADOPTION IN KEY COUNTRIES Individual countries have set targets to increase the share of renewable energy in electricity generation

Targets Key Trends / Enablers ◼ The government has drafted a direct Power Purchase Agreement (PPA) model that would allow corporate Renewable Energy 25 130 customers to buy power directly from renewable energy Vietnam Installed Capacity (GW) producers 2019 2030 ◼ The government has also allowed foreign investors to own up to 100% equity in power generation projects ◼ The country plans to add 48 GW of renewable energy installed generation capacity by 2030 consisting of 30 GW of solar and 16 GW of wind energy installed capacity Electricity Generation From Renewable South 6.9% Sources As a Share of Total 20% ◼ The Renewable Portfolio Standard (RPS) Scheme is the key Korea enabler to promote the growth in renewable energy installed Share in 2019 Target for 2030 capacity. It mandates the power generators to produce a specified minimum proportion of their power from renewable energy sources ◼ Development of solar rooftop projects is a special focus area Renewable Energy Installed Capacity (GW) for the government. A pilot program for regulation-free 22% 33% Thailand As a Share of Total Capacity installation of solar rooftop projects has been initiated

Share in 2019 2037 ◼ The first hybrid renewable energy generation project is expected to be completed by 2021 ◼ The central government is formulating an amendment to the feed-in tariff system to make it cost reflective. Currently Electricity Generation From Renewable 12% 23% tariffs, which are benchmarked against existing power plants, Indonesia Sources As a Share of Total are often unviable for new renewable energy projects Share in 2019 Target for 2025 ◼ Additionally, in order to facilitate renewable energy capacity addition, the central government is providing various incentives and subsidies

Source: International Renewable Energy Agency, Sector Reports, News Reports and GCA Analysis 9 TARGETS FOR GROWTH IN RENEWABLE ENERGY ADOPTION IN KEY COUNTRIES Individual countries have set targets to increase the share of renewable energy in electricity generation

Targets Key Trends / Enablers ◼ Due to the increased maturity of solar PV technology in the country, the government has moved from a feed-in tariff system to a system of competitive Electricity Generation From Renewable bidding for large scale solar projects. Participation of 2% Sources As a Share of Total 20% foreign players is however capped at 49% Malaysia shareholding in the bidding consortium Share in 2019 Target for 2025 ◼ Moreover, to propel growth in hydro power installed capacity, the government has partnered with a Norwegian firm to conduct a feasibility study for 5 hydro power projects ◼ Preferential treatment like priority grid connections and electricity dispatches have been provided to renewable energy producers through the Electricity Electricity Generation From Renewable 6% 20% Business Act 2017 Taiwan Sources As a Share of Total ◼ The country is laying special emphasis on the Share in 2019 Target for 2025 development of offshore wind energy projects through targeted subsidies, incentives and expedited environmental clearances

Source: International Renewable Energy Agency, Sector Reports, News Reports and GCA Analysis 10 INVESTMENTS IN RENEWABLE ENERGY Given the headroom for growth and the long-term focus on renewable energy adoption, the Asia-Pacific region has been the recipient of the largest proportion of global investments in the sector

Regional New Investments in Renewable Energy(1)

350 331.5 294 296 301.9 ◼ Though the total investment in renewable energy has remained at relatively 300 similar levels, the absolute capacity addition has increased due to the reduction in Levelized Cost of Electricity (LCOE)(2) from solar and wind power Middle East & Africa 250  Globally, the weighted average LCOE for solar PV projects has been Europe 200 reduced by 73% from 2010 to 2018. The weighted average LCOE for Americas 150 onshore wind projects has been reduced by approximately 30% during Asia-Pacific 100 203.7 the same time period 158.8 157.1 149.5

Total Investments (USD Bn) ◼ The decrease in LCOE has been driven by a reduction in equipment costs as 50 well as an increase in efficiency of solar and wind equipment 0 ◼ The Asia-Pacific region has received the largest investment in the renewable 2016 2017 2018 2019 energy sector

Factors That Have Influenced Investments In Asia-Pacific

` Carbon Dioxide Emissions ◼ The Asia-Pacific region is the largest contributor to global carbon dioxide emissions, making the region a focus area ◼ Many countries in the Asia-Pacific region are in the earlier stages of renewable energy adoption compared to countries in Stage of Renewable Europe and North America Energy Adoption ◼ The countries are incentivizing capacity build-out, thus providing opportunity for early movers ◼ Countries like Japan, Taiwan and South Korea offer long-term feed-in tariffs(3) which are higher than auctioned prices in Europe and North America and hence provide higher risk-adjusted returns Power Price Certainty ◼ Investors are acquiring assets in Asia-Pacific to balance their portfolio across auction-based and feed-in tariff projects ◼ Most countries in Europe and North America are phasing out government-backed subsidies leading to market-based price variation

Note: (1) New investment in the particular year is calculated by subtracting the re-invested equity from the total investment (2) LCOE is calculated by dividing the lifetime cost of a power generation plant by the units of electricity generated during its lifetime (3) Under the feed-in tariff system, a fixed tariff is paid to the renewable energy generators for each unit injected into the grid Source: International Renewable Energy Agency, British Petroleum Statistical Review of World Energy 2018 and 2020, News Reports and GCA Analysis 11 FINANCING CONTINUUM IN THE RENEWABLE ENERGY SECTOR Investments in asset financing and acquisition / refinancing of completed projects dominated investment activity in the renewable energy sector in 2019

Technology Manufacturing Roll-out Acquisition / Technology Research Development Scale-up (Asset Finance) Refinancing Investigation and The commercial viability Capital investments are Projects are rolled out The projects after research on new of new technologies is deployed to set-up using new technologies: completion are technologies established manufacturing facilities utility scale and small refinanced through scale lower-cost capital or are acquired for strategic

Stage of Investment of Stage reasons

Govt. R&D, Corporate Balance Sheets

Venture Capital (VC)

Private Equity (PE), Public Equity Markets

Debt Markets, Institutional Equity Source of Investment of Source

2019 USD 282.2 Bn USD 100.7 Bn USD 65.5 Bn Global Investments in in Investments Global USD 14.6 Bn USD 8.6 Bn

Source: United Nations Environment Program, Sector Report by Frankfurt School, News Reports and GCA Analysis 12 INVESTMENTS IN RENEWABLE ENERGY CAPACITY ADDITION IN ASIA-PACIFIC The technology focus of investment in the Asia-Pacific region varies across countries

Investments(1) (2019) in USD Bn by Country

20.01 China 0.36 0.23 2.4 Japan 0.3 India 2.6 Taiwan 5.6 Australia 83.4 Vietnam 8.8 Malyasia South Korea 9.3 Indonesia Thailand Others 16.5

Top-4 Breakdown of Investments by Technology (USD Bn) Countries Solar Wind Hydro Biopower Total Comments

Majority of the investment was in wind projects due to China 25.7 55 1.2 1.5 83.4 planned reduction in subsidies from 2021 Though solar projects received the highest investment, Japan 13.6 0.3 - 2.6 16.5 there was a 26% jump (over 2018) in investment in biopower projects Grid-connected solar continued to receive the highest India 6.6 2.2 0.1 0.4 9.3 investment The feed-in tariff system for offshore wind projects Taiwan 1 7.8 - - 8.8 continued to attract investments

Note: (1) Includes both domestic and foreign investments. Includes investments in solar projects, wind projects, biopower projects and hydro projects with less than 50 MW installed capacity Source: United Nations Environment Program, Sector Report by Frankfurt School, News Reports and GCA Analysis 13 SOURCE AND DESTINATION OF FOREIGN DIRECT INVESTMENT (FDI) IN RENEWABLE ENERGY The Western European countries funded the highest number of projects, with the Asia-Pacific region being one of the key destinations for new projects Top Country of No. of Company Name Source of FDI (Top 10) by Country Companies Origin Projects Number of Greenfield Projects (Dec 2013-Nov 2018) Enel Green Power Italy 27 0 20 40 60 80 100 120 140 160

Germany 143 Canadian Solar Canada 27 Italy 136 United States 136 SkyPower Canada 16 Spain 117 Acciona Energia Spain 14 China 110 France 106 SunEdison US 14 Canada 81 United Kingdom 64 Iberdrola Spain 13 Denmark 34 Japan 34 Orsted Denmark 13

- Western European countries Building Energy Italy 12

Destination of FDI (Top 10) by Country OPDE Spain 12

Number of Greenfield Projects (Dec 2013-Nov 2018) Enel North America US 11 0 20 40 60 80 100 120 140 United States 117 Neoen France 11 United Kingdom 112 Mexico 80 ACWA Power Saudi Arabia 10 Japan 74 India 73 Enel Mexico Mexico 10 Australia 66 Chile 56 Fotowatio Renewable Spain 10 Brazil 49 Vietnam 49 Access Infra Africa UAE 9 Phillipines 39 Gestamp Wind Spain 9 - Countries in Asia-Pacific

Source: FDI Intelligence, News Reports and GCA Analysis 14 MAJOR PUBLIC EQUITY AND VC / PE FUND RAISING ACTIVITY IN ASIA-PACIFIC (2019) Globally, the Asia-Pacific region witnessed some of the largest public equity and VC / PE fund raising activity in the renewable energy sector in 2019 Public Equity Funding Company Country Business Model Type of Share Issue Fund Raised

China Project developer IPO USD 466 Mn

India EPC contractor IPO USD 414 Mn

Hong Kong Project developer Convertible USD 314 Mn

China Solar panel manufacturer Secondary USD 213 Mn

China Wind blade manufacturer IPO USD 207 Mn

China Biodiesel producer IPO USD 191 Mn

VC/PE Funding Total Company Country Business Model Type of Investment Major Investors Investment

India Project developer PE-Expansion capital USD 824 Mn

India Project developer VC-Series A USD 300 Mn

India Project developer PE-Expansion capital USD 150 Mn

India Project developer VC-Series A USD 144 Mn

Source: United Nations Environment Program, Sector Report by Frankfurt School, News Reports and GCA Analysis 15 3 The India Opportunity TARGET FOR RENEWABLE ENERGY INSTALLED CAPACITY India’s renewable energy installed capacity is expected to see significant growth in accordance with the government’s objective of decarbonizing the grid

Growth in Renewable Energy Installed Capacity

◼ The renewable energy installed capacity is expected to see robust 700 619 17 growth in accordance with the objectives set under the Paris 600 Agreement (2016) 479 500 10 264 ◼ Over the years, the tariffs for electricity generated through 371 renewable sources have shown a downward trend. This would also 400 7 243 boost growth in renewable energy installed capacity 300 231  For example, the solar power tariffs in the recent tenders were 200 338 40-50% lower than that of coal-based thermal power. Similarly,

Installed Capacity(GW) 100 226 1.5x the wind power tariffs were 25-30% lower than that of coal- 133 1.7x based thermal power 0 2020 2022 2027

Renewable Thermal Nuclear Total Growth in Renewable Energy Installed Capacity by Technology

250 226 ◼ The government has announced targeted policies which address the 200 specific issues related to each source of generation 100 150 133 ◼ In line with these targets, the actual auctioning and tendering 34 process has gained momentum from 2018 100 60 38  Both in 2018 and 2019, tenders were announced for more than 50 10 51 30 GW of solar capacity as compared to approximately 5 GW in 10 46 5 Installed Capacity(GW) 5 2016 and 2017 0 2020 2022

Biopower Small Hydro (<25 MW) Large Hydro (>25 MW) Wind Solar Total Note: The years referred to on the graph axis are financial years: April to March 17 Source: Central Electricity Authority (CEA), News Reports and GCA Analysis INSTALLED CAPACITIES OF KEY PLAYERS While most players are currently focusing on solar capacity addition, hybrid (wind and solar) projects are expected to gain traction in the future

Renewable Energy Installed Capacity by Key Player(1)

16000 13990 14000 1690 12000 1280 Hybrid (Pipeline) 397 Hybrid (Operatonal) 10000 8400 Wind (Pipeline) 8000 Wind (Operational) 1700 Solar (Pipeline) 8425 5500 6000 4603 Solar (Operational) 3100 Installed (MW) Installed Capacity 160 3780 Total 4000 2600 225 2358 1700 1161 1900 1500 2000 180 700 2900 2198 1900 1905 1694 1520 1000 380 0 500 Adani Green Energy ReNew Power Acme Greenko Tata Power Avaada Mytrah

◼ Renewable energy power generation is fragmented in India with the top-seven players accounting for just 22% of the total operational capacity ◼ Hybrid solar and wind projects are gaining traction in order to address the issue of grid stability associated with renewable energy projects

Note: (1) The data is derived from publications between January and June 2020 Source: Respective Company Websites, News Reports and GCA Analysis 18 POLICIES TO PROMOTE ADOPTION OF RENEWABLE ENERGY Several policy initiatives have been announced by the government to support the end-to-end value chain including generation, transmission and distribution of renewable energy

Development of Solar Parks Safeguard Duty on Solar Equipment ◼ Solar parks with supporting infrastructure like ◼ The government will continue to levy safeguard duty transmission lines, water access, road connectivity and on solar cells till July 2021. The safeguard duty would land clearances to be developed by state governments be 14.9% until Jan 2021 and 14.5% after that ◼ Financial assistance would be provided by the central Reduce ◼ Imposition of additional basic customs duty is under government Import discussion Dependence ◼ As a result, project developers would incur lower ◼ Manufacturing-linked projects are being developed project cost/MW of electricity generated wherein project developers are required to setup solar cell manufacturing capacity along with power ◼ Target: 25 solar parks with 40 GW capacity by 2022 generation capacity

Grid-connected Rooftop Program Green Energy Corridor ◼ Seamless approval and easing of permissions by Boost ◼ Intra-state and inter-state transmission infrastructure distribution companies for grid-connected rooftop Installed for connecting renewable energy generation centers projects Capacity to load points ◼ Facilitate Financial assistance by the central government to ◼ Financial assistance by the central government project developers Power Transmission ◼ Target: 40 GW rooftop capacity by 2022 Renewable Purchase Obligation Financial Incentive ◼ Distribution companies are obligated to purchase a ◼ Tax benefit: Provision to claim accelerated specified percentage of their total electricity demand depreciation on renewable energy projects from renewable energy generators ◼ Viability gap funding ◼ It is further divided into solar and wind power Boost purchase obligations ◼ Loans at subsidized rates Demand

Source: Ministry of New and Renewable Energy (MNRE), Respective Scheme Websites, News Reports and GCA Analysis 19 RECENT TRENDS IN THE RENEWABLE ENERGY SECTOR Recent tenders indicate the evolving technical complexity of renewable energy projects in India

Hybrid Power Round-The-Clock (RTC) Power ◼ Combination of wind and solar power with an ◼ Provision for reverse bundling, wherein high-cost additional generation source or storage system thermal power is being allowed to be bundled with lower cost renewable energy ◼ Ensures optimal use of land and transmission infrastructure

◼ Addresses the issue of intermittency in electricity Peak Power generated through renewable sources ◼ Two-part tariffs: peak tariff and off-peak tariff ◼ National Wind-Solar Hybrid Policy announced in 2018 to guide the implementation of hybrid ◼ At least 51% of the annual electricity supplied projects would be from renewable sources

Recent Solar Auctions in India (Jan 2020-Aug 2020)

8000 7000 5 7000 4.5 4 6000 3.5 5000 4000 3 4000 2.5 2 3000 2000 2000 2000 2000 1.5 2000 1200 1200 1200 Capacity(MW) 1200 1200 1170 1 500 500 400 400 Tariff (INR/ KWH) 1000 184 350 50 50 0.5 0 0 (1) (2) (3) (4) SECI 7 GW ISTS SECI 1.2 GW RE UPNEDA 500 SECI 1.2 GW ISTS GUVNL 350 MW NHPC- 2 GW SECI 400 MW SECI 2 GW ISTS Rajasthan NTPC 1.2 GW Manufacturing Peak Power MW Solar Tranche VIII Phase-VIII Solar Solar Auction Round-the-Clock Tranche IX Solar Electronics and ISTS Solar Tender Linked Solar Supply (Jan Project (Feb Solar Project Project (March (April 2020) Renewable Tender (June Instruments- 50 (Aug 2020) Project (Jan 2020) 2020) (Feb 2020) 2020) Project (May 2020) MW rooftop 2020) 2020) solar (June 2020)

Tender Issuance Auctioned Min Winning Bid Max Winning Bid Source: News Reports and GCA Analysis Note: (1) SECI- Solar Energy Corporation of India (2 ISTS- Inter State Transmission System (3) UPNEDA- Uttar Pradesh New and Renewable Energy Development Agency 20 (4) GUVNL- Gujarat Urja Vikas Nigam Limited RECENT INVESTMENT ACTIVITIES (2019 & 2020) IN THE RENEWABLE ENERGY SECTOR IN INDIA Both strategic and financial investors have been active in the renewable energy sector in India

Company Investment Value Major Investors Comments

Largest Foreign Direct Investment (FDI) in the clean energy space; Orix to acquire 15- USD 1 Bn 17% stake in Greenko (Sept 2020)

USD 307 Mn Actis acquired 400MW operational solar projects of Acme (Aug 2020)

Value Undisclosed Next Energy-III acquired the operational solar projects of IBC Solar (July 2020)

USD 4.2 Mn Pre-Series A funding (Apr 2020)

TOTAL S.A acquired 50% stake in the operational solar projects of Adani Green USD 510 Mn energy (Feb 2020)

The fund is expected to finance the company’s mission to achieve a renewable USD 165 Mn energy portfolio of 5 GW across Asia and Africa (April and Nov 2019)

The capital would be used by the company to expand its renewable energy portfolio USD 300 Mn in India (Sept 2019)

The fund would be predominantly used to facilitate Greenko’ s 2.4 GW storage USD 329 Mn project which is expected to be operational by 2022 (June 2019)

The capital would be used by the company to expand its renewable energy portfolio USD 150 Mn in India (June 2019)

USD 25 Mn FMO invested in Tata Cleantech Capital through green bonds (Jan 2019) (Tata Cleantech Capital)

Source: News Reports and GCA Analysis 21 A VIEW ON THE RENEWABLE ENERGY SECTOR DURING THE COVID-19 CRISIS The renewable energy sector has been largely resilient during the COVID-19 crisis Auctioning Activity for Solar Projects in India ◼ Auctioning activity has sustained its momentum in recent months despite 8 7 the COVID-19 crisis: 7  Tenders like 2 GW grid-connected solar power and 400 MW Round-The- 6 Clock (RTC) power by Solar Energy Corporation of India (SECI) were 5 4.4 oversubscribed by the developers 4 3.6 3.6 3  Auctions during this period received some of the lowest tariff bids. The 1.9 Capacity(GW) 2 solar project tender floated by National Hydro Power Corporation 1 resulted in a tariff of INR 2.56/KWH. Similarly, the 2 GW grid-connected solar power project by SECI resulted in a tariff of INR 2.38/KWH 0 Apr-June 2019 July-Sept 2019 Oct-Dec 2019 Jan-Mar 2020 Apr-June 2020 Financial and Stock Market Performance of Companies in the Renewable Energy Sector

Representative 7.0 INR Billion 6.0 0 1 2 3 4 5 6 7 5.0 DIP Adani Green: 5.51 +11% 4.0 6.09 Revenue 3.0 Adani Green: 4.95 2.0 5.55 +12% EBITDA 1.0

Share Prices SharePrices (00’ INR) RECOVERY 0.0 Jan-01-2020 Mar-01-2020 May-01-2020 Jul-01-2020

Azure Power: 3.36 +16% Adani Green Sterling and Wilson Revenue 3.9 ◼ The renewable energy sector was provided with a ‘must-run’ status during the Azure Power: 2.55 nationwide lockdown EBITDA 3.3 +29%  Assured offtake of power by distribution companies from renewable energy Apr-June 2019 Apr-June 2020 generators and payment security ◼ This policy assisted the companies in sustaining their revenue and EBITDA ◼ As a result, the share prices of companies in the sector have also shown Source: Capital IQ, News Reports and GCA Analysis subsequent recovery 22 AREAS OF OPPORTUNITY Opportunities for investment exist across the value chain in the renewable energy sector in India

Equipment Manufacturing Renewable Energy Generation Energy Storage Systems

Government’s push to reduce import The renewable energy installed capacity is Demand for utility scale energy storage systems dependence is expected to boost the demand expected to see a robust growth to meet the (battery storage and pumped hydro) is expected for domestically produced equipment (solar renewable energy targets, presenting to grow to address the intermittency of cells, solar modules and wind turbines) opportunities for companies to develop both renewable energy and ensure seamless grid grid-connected and standalone solar rooftop integration projects ◼ Both domestic and foreign renewable energy ◼ The recent tenders have witnessed strong ◼ Both the private sector and the government companies have started setting up equipment participation from both Indian and foreign are focusing on developing utility scale energy manufacturing facilities in India renewable energy companies storage systems

An Indian renewable energy company Major Indian renewable energy Greenko Group , a leading Indian – To set up 2 GW solar cell and module companies like Azure Power, Adani renewable energy company, plans to manufacturing facility with an Green, ReNew Power and Greenko utilize a significant portion of the funding investment of USD 200-267 Mn have recently won 2.3 GW, 2 GW, 1.3 received from Orix Corporation to develop GW and 900 GW of solar power battery storage systems for power grid generation capacity respectively, applications ‘Manufacturing linked’ tender floated through competitive bidding (Jan-Aug by SECI – The two Indian renewable 2020). energy companies would together set SECI has recently concluded the The above capacities are expected to up 3 GW solar cell and module auctioning process for 1.2 GW get operational in the near future manufacturing capacity renewable-plus-storage-capacity tender (largest such tender in the world). The tender was oversubscribed A Danish wind turbine manufacturer – Similarly, foreign companies like Eden by the bidders Announced its plans of launching a Renewables have won 1.2 GW of solar wind turbine model, designed for the power generation capacity through Indian market, that would be competitive bidding (Jan-Aug 2020). manufactured locally in India The above capacity is expected to get operational in the near future

23 Source: News Reports and GCA Analysis 4 Our Offering COMPREHENSIVE PROPOSITION We assist clients end-to-end including strategy formulation, development of an investment roadmap and on-ground implementation STRATEGY FORMULATION EXECUTION

Partner Identification

Inorganic Deal Execution

Assessment of the Post-Merger Integration Macro Environment & Investment Roadmap the Renewable Energy Sector Location Analysis

Greenfield Profitability Assessment

Project Implementation Support We combine our tested financial advisory and consulting capabilities to comprehensively assist clients

25 APPROACH

Assessment of the Macro Environment and the Renewable Energy Sector Investment Roadmap

◼ Quantitative and qualitative assessment of the overall attractiveness of the ◼ Comprehensive assessment of sector opportunities and

Strategy Formulation Strategy renewable energy sector capabilities of the client to determine the most suitable investment route

Partner Identification Deal Execution Post-Merger Integration (PMI)

Inorganic Execution:

◼ Partner short listing and profiling ◼ Partner outreach followed by valuation, due ◼ PMI strategy and execution diligence, negotiation and deal closure

Location Analysis Profitability Assessment Project Implementation Support

Execution: Greenfield ◼ Prioritization of suitable locations for setting ◼ An assessment of the fixed and variable costs ◼ A Program Management Office (PMO) up a greenfield project to arrive at break-even scenarios monitors and reports project progress

26 FOR FURTHER INFORMATION, PLEASE CONTACT:

Sameer Jindal Suman Jagdev Managing Director Director Mumbai Mumbai [email protected] [email protected] +91 22 6106 9001 +91 22 6106 9013

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