Energy SME Financing: Challenges & Innovative Financing Instruments

Summary

• India has a good track record of funding Energy SMEs when they have reached a certain scale by way of equity

• India has challenges around early stage investing and debt financing

New Ventures India

• Started in 2006

• Current Partner : Regain Paradise Research Consulting

• Facilitated USD 43 million in investments

Sectors and Supported EnterprisesEnergy

EfficiencyRenewable

EnergyWater Tech Recycle Organic Farming Clean Tech

Energy SMEs

Distribution of Portfolio Companies

Renewable Energy 33%

Energy Ef -ficiency

25%Organic Farming

15%

Recycle 8%

Clean Technologies15%

Green Building Materials4%

Energy SMEs

Portfolio Company : Funding Analysis

35.77

7.4

Investments Financial Investment

Non financial

USD 43.17 in 22 companies

78%

16%

5% 1%

Investments Equity

Debt

Angels

Others

78% of the USD 35.77 as equity New Chapter…

Investment FacilitationAngel Networks

Social Enterprise Funds

Cleantech Focused Venture Capitalists

VC/Private Equity

Banks Banks

Angel Networks

Impact Investors

More than 30 Investor network members across the investing spectrum

Deals in Green Entrepreneurship Project Developers Water

& Waste Organic Farming

Social Enterprises

TechnologyInnovation

Clearwater

Peepul

IFC (W)

Helion

IDG

IDFCBessemer

Barings

NexusNexus

Aavishkar

IVF

Acumen et al

Aavishkaar

AcumenGEF

DFJ

DFJ, BlueRun

Deals across the board

Summarizing the Challenges

• Lack of really early stage funds

• Lack of focused incubators

• Lack of efficient debt instruments

Trends in early stage funds Sector agnostic early stage Social enterprise early stage investor

/incubator

The investment amount in early stage investing has increased by about300% in the last one year (source : Venture Intelligence)

Globa Social Venture Capital, Villgro….

Innovative Financing Instruments : Debt

• SIDBI and KfW lines:

• Cleaner Production and Energy Efficiency line – demand side

• Innovation Finance Line (late 2012) - supply side

Innovative Financing: Crowdfunding

Achieved so far•Won an (50%) ANDE grant to develop a crowd-funding platform for impact investments

Goal • Develop a product that can be deployed globally thru partners