August 17, 2019
Project Overview and
Energy Conservation Opportunities in MSMEs
Energy and Resource Efficiency Improvements,
Cleaner Production and Lean Manufacturing in
MSME Units Through ESCO Contract
(Bengaluru City)
Enfragy Solutions India Pvt. Ltd. (A Wholly Owned Subsidiary of Idam Infrastructure Advisory Pvt. Ltd.)
Contents
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• IFC-EU Partnership for Eco Cities in India
• Services Offered by Enfragy to MSME Units
• Overview of MSME Units in India
• Potential MSME Sectors in Bengaluru
• ESCO, Their Offerings and Operation Models
• Partial Risk Guarantee Fund for Energy Efficiency
• Activities to be undertaken by Enfragy
• Way Forward
Enfragy Solutions India Pvt. Ltd. (A Wholly Owned Subsidiary of Idam Infrastructure Advisory Pvt. Ltd.)
IFC-EU Partnership for Eco Cities in India
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• IFC is implementing “IFC-EU Partnership for Eco Cities in India”.
• SME component is one of three pillars of the program with objective to
facilitate sustainable energy finance to develop cities into eco-cities.
• IFC has identified potential SME clusters in five cities i.e. Greater
Mumbai, Chennai, Bengaluru, Bhubaneshwar and Pune.
• IFC and BEE are supporting FIs in improving their understanding of EE
Financing and leveraging the risk-sharing facilities setup by the BEE.
• IFC and BEE have collaborated to increase the pipeline of EE loan
applications for FIs of PRGFEE by facilitating audits in MSME units.
• In this regard, IFC has appointed Enfragy Solutions India Pvt Ltd
(Enfragy) as a Technical Firm & ESCO to work with PRGFEE’s Partner
FIs in preparation of IGDPRs for MSME units in Bengaluru City.
Enfragy Solutions India Pvt. Ltd. (A Wholly Owned Subsidiary of Idam Infrastructure Advisory Pvt. Ltd.)
Services Offered by Enfragy to MSME Units
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• Creating awareness of MSME units and Identification of interested MSMEs
• Undertaking “Walk through Audit” of the MSME unit
• Financial assessment of the MSME unit
• Identification of eligible MSMEs under the project (Eligibility criteria: Minimum
Project Investment of 25 Lakh and 250 tCO2 emission reduction)
• Monthly energy bill (i.e. electricity, coal, gas etc.) of 10 to 12 lakhs and above
• Turnover of more than 8 crores
• Obtaining sign-off from the “Viable MSME units” for Investment Grade Audits.
• Preparation of 50 IGDPRs for MSME units considering EE, RE, LM and CP
measures
• Identification of ESCO for project implementation in MSME units
• Facilitate submission of loan documents to FIs
• Projects shall be monitored and reported to WBG/BEE over 3 to 6 months time.
All the Services shall be free of cost including the Energy Audits, ESCO identification and loan application
Enfragy Solutions India Pvt. Ltd. (A Wholly Owned Subsidiary of Idam Infrastructure Advisory Pvt. Ltd.)
Overview of MSME Segment in India
• There are around 633.88 Lakh estimated non-agriculture MSMEs exist in India.Classification of MSME unit is as follows:
• Around 31% MSMEs are engaged in Manufacturing activities, while 36% inTrade and 33% in Other Services.
• MSMEs contribute to 28% of India’s GDP and provide employment to 117million people.
• Various studies reveal that energy cost accounts for 25% of total production costof MSMEs.
• Strong influence of the MSME sector on economy and high share energy cost inproduction cost reflects high potential of MSME segment to contribute towardslow carbon and more climate resilient Indian economy
• Karnataka houses around 38.34 Lakhs MSME units, whereas Bengaluru housesaround 1 Lakhs number of units
Classification of MSME Annual Turnover
Micro <= 5 Crore
Small > 5 Crore - 75 Crore
Medium > 75 Crore - 250 Crore
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Enfragy Solutions India Pvt. Ltd. (A Wholly Owned Subsidiary of Idam Infrastructure Advisory Pvt. Ltd.)
EE Potential and Investment Requirement in MSME Segment
• Total energy consumption of MSME sector is 35 MTOE during FY 2018-19, this
include 5.25 MTOE of electrical energy and 29.76 MTOE of thermal energy.
• Based on various studies energy saving potential and investment requirement in
potential measures in MSME segment is presented below
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Sr. No.
TechnologyEnergy
Consumption (MTOE)
Saving Potential
(%)
Savings (MTOE)
Investment Requiremen
t (Million INR)
Cost Saving
(Million INR)
Replicable Potential
1 Waste Heat Recovery 1.1615 26% 0.3020 21,676 8,122 30%
2 Optimization of boiler and steam system
0.3952 21% 0.0830 557 471 30%
3 Efficient rewinding of motors 0.0850 4% 0.0034 624 864 50%
4 Fuel switch 5.1333 30% 1.5400 24087 10863 30%
5 Energy Efficient Lighting 0.0920 50% 0.0460 6966 3288 50%
6 Efficient Pumping Systems 0.0750 24% 0.0180 874 1277 40%
7 Improvement in Insulation 1.1933 30% 0.3580 10517 13991 30%
8 Use of VFDs for motor control 0.4906 53% 0.2600 6584 18,484 40%
9 Efficient compressors 0.1100 30% 0.0330 5376 2367 30%
8.7360 2.6434 77261 59727
Enfragy Solutions India Pvt. Ltd. (A Wholly Owned Subsidiary of Idam Infrastructure Advisory Pvt. Ltd.)
Potential MSME Sectors in Bengaluru
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Based on preliminary understanding of energy intensity of MSMEs in
Bengaluru, following sectors have been selected:
❑ Commercial Building
❑ Machine Tools
❑ Auto Component
❑ Chemical Sector
❑ Injection Moulding
❑ Forging, Foundry & Casting
❑ Garment & Hosiery
❑ Drugs & Pharmaceuticals
❑ Corrugated box/Sheet
Enfragy Solutions India Pvt. Ltd. (A Wholly Owned Subsidiary of Idam Infrastructure Advisory Pvt. Ltd.)
Potential EE and RE Measures
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Sr. No. EE & RE Measure
1 Installation of damper control mechanism in boiler
2 Fuel Switching of boiler and furnace
3 Replacement of Steam Distribution System
4 Replacement of existing non-IBR boiler with IBR boiler of larger capacity
5 Replacement of Refractory Material of Preheating Furnace in Rolling Mill
6 Replacement of the existing compressed air circuit with new circuit
7 Installation of energy efficient HVAC system
8 Installation of energy monitoring system for Load Management
9 Installation of energy efficient lighting system
10 Replacement of old compressors with new EE compressor
11 Installation of EE Transformer, Harmonics Filter and AVR
12 Installation of Energy Efficient Motors and Pumps
13 Installation of Automatic Power Factor Control System and Demand Controller
14 Installation of Computer Numerical Control Machines
15 Installation of Solar PV and Water Heating System at roof of building
Enfragy Solutions India Pvt. Ltd. (A Wholly Owned Subsidiary of Idam Infrastructure Advisory Pvt. Ltd.)
ESCOs, Offerings and Operating Models (1/3)
Organisations that offer both technical
and financial services to implement
energy efficiency projects and guarantee
that the energy savings associated with
the project will be enough to cover the
costs of the project over a certain period
of time.
• Identification, development and
design of energy-efficiency projects;
• Financing, or acquiring the financing,
of the energy-efficiency project;
• Installation of energy-efficiency
technology/equipment; and
• Measurement, monitoring and
verification of energy savings.
What are ESCOs? What do they offer?
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Enfragy Solutions India Pvt. Ltd. (A Wholly Owned Subsidiary of Idam Infrastructure Advisory Pvt. Ltd.)
ESCOs, Offerings and Operating Models (2/3)
Customer shares energy savings
(utility bill)
Agency Energy and O&M Bills
Cost Savings
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Enfragy Solutions India Pvt. Ltd. (A Wholly Owned Subsidiary of Idam Infrastructure Advisory Pvt. Ltd.)
1. SHARING SAVINGS MODEL 2. GUARANTEED SAVINGS MODEL
ESCOs, Offerings and Operating Models (3/3)
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Enfragy Solutions India Pvt. Ltd. (A Wholly Owned Subsidiary of Idam Infrastructure Advisory Pvt. Ltd.)
Partial Risk Guarantee Fund for Energy Efficiency
➢ Risk sharing mechanism to provide Participating Financial Institutions (PFIs)
with a partial coverage of risks involved in extending loans for energy
efficiency (EE) projects by:
– Addressing the credit risks and barriers to structuring the transactions
– Engaging FIs and building their capacity to finance EE projects on a
commercially sustainable basis.
– PRGFEE provides risk cover upto 50% of debt in an EE project.
➢ PRGFEE will act as a first-loss and subordinated recovery guarantee, to be placed in a
guarantee reserve account and paid out to empaneled participating Financial
Institutions (“PFIs”) in the event of loss or default in energy efficiency projects.
➢ Govt. of India has approved around INR 312 crores for PRGFEE.
➢ PFI to obtain guarantee from PRGFEE before disbursement of loan to borrower
➢ 5 PFIs have been empanelled with BEE: Andhra Bank, IDFC Bank, IndusInd Bank,
Tata Cleantech Capital and Yes Bank
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Enfragy Solutions India Pvt. Ltd. (A Wholly Owned Subsidiary of Idam Infrastructure Advisory Pvt. Ltd.)
PRGFEE: Institutional Structure
Fund Creation
PRGFEEGovt of India
OTHERS
Bureau of Energy Efficiency (BEE)Nodal Agency
Supervisory Committee
Fund Management
Implementing AgencyAppointed By BEE
Lender Financial
Instituion(FIs)Empanelledby
BEE
Verifer M&VAgency
Empanelled byBEE
Borrower Energy Service
Company(ESCO) Empanelled by BEE
Loan Sanction & Disbursal
Projects Appraisal& Guarantee
During Claims
Implementing
Agency Appointed
by BEE
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Enfragy Solutions India Pvt. Ltd. (A Wholly Owned Subsidiary of Idam Infrastructure Advisory Pvt. Ltd.)
Loan Disbursement and Share of EE andRE Project Under PRGFEE
• Projects implemented by BEE empanelled ESCOs or a JV of ESCOs with
at least 50% share capital of BEE empanelled ESCO, only
• Deemed ESCO is also eligible for loan application under PRGFEE
• Loan amount of minimum INR 5 Lakh can be considered for guarantee
under PRGFEE.
• 70% of the eligible loan amount should be towards implementation of EE
project
• Project can be a joint project of RE and EE with 50% investments
required for EE Project
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Enfragy Solutions India Pvt. Ltd. (A Wholly Owned Subsidiary of Idam Infrastructure Advisory Pvt. Ltd.)
Activities to Be Undertaken by Enfragy
Obtain willingness form
from MSME
Conduct walk through EA
Identify EE opportunity and submit MoU to viable MSMEs
Obtain MoU from Management of
MSME
Carry out IGEAPrepare IGDPR
Assistance on signing of ESP contract with
ESCO
Preparation of Loan Application to FIs on behalf of
ESCO
MSME Issues Implementation
Contract to ESCO
Loan Disbursement by
FIs
Implementing EE, LM and CP
Project by ESCO
Realization of Savings
To be done by ESCO and MSME
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Enfragy Solutions India Pvt. Ltd. (A Wholly Owned Subsidiary of Idam Infrastructure Advisory Pvt. Ltd.)
Way Forward
• Interested and eligible MSME units are requested to register their
interest in the program by contacting with any one of the following:
• Enfragy Team would conduct walk through energy audit and detail
energy audit at MSME units and identify potential EE and RE measures.
Name Contact Details
Gagan Shrivastav(Idam Infra)
+919004532525/9136920640 [email protected]
Sonia Shukla(Idam Infra)
Antony Gerald(Enspar Energy)
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Thank You
Mumbai Delhi Kolkata Hyderabad
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Contact:
Balawant Joshi (Managing Director) +91 98214 21630
Ajit Pandit (Director) +91 98211 08222
Email: [email protected]