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November 03, 2010 Page | 1
India Climate Innovation Center: CIC
A Business Plan for the financing and implementation of a
CIC in India.
Prepared by infoDev for the UK‟s Department for International Development
Contributing Authors:
Anthony Lambkin
Ashok K Das
Julian Webb
November 03, 2010 Page | 2
Copyright
©2010 Information for Development Program (infoDev)/The World Bank
1818 H Street NW
Washington DC 20433
Internet: www.infoDev.org
Email: [email protected]
All rights reserved
Disclaimers
infoDev/The World Bank: The findings, interpretations and conclusions expressed herein are
entirely those of the author(s) and do not necessarily reflect the view of infoDev, the Donors of
infoDev, the International Bank for Reconstruction and Development/The World Bank and its
affiliated organizations, the Board of Executive Directors of the World Bank or the governments
they represent. The World Bank cannot guarantee the accuracy of the data included in this
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work do not imply on the part of the World Bank any judgment of the legal status of any territory
or the endorsement or acceptance of such boundaries.
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The material in this publication is copyrighted. Copying and/or transmitting portions or all of this
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normally grant permission to reproduce portions of the work promptly.
To cite this publication:
Climate Innovation Center Business Plan: India. An infoDev publication, November 2010.
Available at: www.infodev.org/climate
November 03, 2010 Page | 3
Stakeholder Support infoDev would like to acknowledge the following stakeholders for their guidance,
support and input through the conceptualization and development of this business plan
for a Climate Innovation Center in India:
Entrepreneurs, Industries, Finance, NGOs
Acumen Fund/Consultant Hyderabad Katie Hill
Alliance to Save Energy Bangalore Sudha Setty
Applied Materials India Delhi Rameesh Kailasam
Applied Materials India Delhi Inderjit Singh
Artiman Ventures Bangalore Kumar Subramanyam
Azure Power Delhi Inderpreet Wadhwa
Breathe India Ventures Gurgaon Karan Gupta
CII-GBC Hyderabad S. Raghupathy
Consultant (Now with Avesthagen) Bangalore Jagadish Mittur
Consultant Bangalore Nandini Vaidyanathan
C-STEP Bangalore Eswaran Subrahmanian
Development Alternatives Delhi Arun Kumar
DFJ India Bangalore Sachin Maheshwari
eV Renewables Hyderabad Saaketh Preetham
General Electric Bangalore Abhinanda Sarkar
HMX Systems Bangalore A. Vaidyanathan
Indian Angel Network Delhi Sanjay Bhasin
IBM Delhi Reji Kumar
IBM Delhi Sanjeev
Kumar
Gupta
IT Power Group Delhi Jaswinder Kaur
McKinsey & Company Mumbai Sushant Mantry
McKinsey & Company Mumbai Rajat Gupta
Moser Baer Delhi G. Raj Rajeswaran
Moser Baer Delhi Vijay Anand
New Ventures India Hyderabad Sanjoy Sanyal
New Ventures India Hyderabad Hemant Nitturkar
Peer Water Exchange Bangalore Rajesh Shah
PricewaterhouseCoopers Delhi Inderjeet Singh
PricewaterhouseCoopers Kolkata Surojit Bose
Samki Tech Resources Hyderabad S. Sampath
Selco Bangalore Harish Hande
Shapoorji Pallonji & Co. Ltd. Mumbai Ashok Gupta
Sun Group India Delhi Pankaj Sehgal
Tata Power Co. Ltd. Delhi Taruna Saxena
Tata Power Co. Ltd. Mumbai Avinash Patkar
Vayugrid Pune Gerard Rego
Academic, Research Institutes, Incubators, Capacity Organizations
Alliance for an Energy Efficient Economy Bangalore Reshmi Vasudevan
Alliance for an Energy Efficient Economy Delhi Koshy Cherail
Ennovent Chennai Venkat Somasundaram
I2India Bangalore Deepam Mishra
I2India Bangalore Siva Chidambaram
ICRISAT-ABI Hyderabad Kiran Sharma
ICRISAT-ABI Hyderabad SM Karuppanchetty
Chetty
IIMA - CIIE Ahmedabad Kunal Upadhyay
IISc Bangalore Udipi Shrinivasa
IISc Bangalore S. Dasappa
IISc Bangalore N H Ravindranath
IITB Mumbai Anuradda Ganesh
IITD Delhi Ambuj Sagar
Organization Location Name
November 03, 2010 Page | 4
IITK Kanpur SSK Iyer
Indian School of Business Hyderabad Petra Sonderegger
N.B. Institute for Rural Technology Kolkata S.P. Gon Chudhari
NEN & Wadhwani Foundation Bangalore Laura Parkin
OneBillionMinds Kolkata Sanjukt Saha
SP Jain Institute of Management &
Research (SPJIMR)
Mumbai AS Rao
TERI Delhi Prosanto Pal
TERI Delhi Akanksha Chaurey
Villgro Chennai Reihem Roy
Villgro Chennai Paul Basil
Worldwatch Institute and IYCN Delhi Anna Da Costa
Government BEE Delhi Ajay Mathur
DBT Delhi Renu Swarup
DST-DSIR Delhi Shyamal Chakravorty
DST-NSTEDB Delhi Harkesh Mittal
DST-NSTEDB Delhi BK Shukla
Indian Council of Agricultural Research Delhi S. Mauria IREDA Delhi Debashish Majumdar
Karnataka Bio-Fuel Task Force (KBFTF) Bangalore Y.B. Ramakrishna
MNRE Delhi Gauri Singh
MoEF Delhi * Various Individuals*
NRDC Bangalore N.G. Lakshminarayan
NRDC Bangalore V. Raghuram
SIDBI Delhi R.K. Das
SIDBI Mumbai R. Dharmaji
International UK-DFID Delhi Owen Jenkins
UK-DFID Delhi Shantanu Mitra
British High Commission Delhi Leena Arora Kukreja
Carbon Trust UK Martin Johnston
IRG, USAID ECO-III Project Delhi Satish Kumar
Swiss Agency for Development &
Cooperation (SDC)
Delhi Veena Joshi
Winrock International India Delhi Ritu Bharadwaj
World Bank Delhi Charles Cormier
World Bank Delhi Saurabh Yadav
World Bank Delhi Muthukumara
S.
Mani
WBG - Int'l Finance Corp. Mumbai Pravan Malhotra
15%
27%
12%
12%
10%
5%
19%
Background of Indian Stakeholders
Entrepreneur
Industry
Academia
Finance
Government/Policy
Incubator
NGO
November 03, 2010 Page | 5
Contents
1.0 Executive Summary .................................................................................................................................... 6
1.1 Context: ..................................................................................................................................................................... 6
1.2 Process: ...................................................................................................................................................................... 7
1.3 Model: ........................................................................................................................................................................ 7
1.4 Impact: ...................................................................................................................................................................... 8
1.5 Implementation: ....................................................................................................................................................... 9
2.0 Climate Innovation Centers .................................................................................................................... 10
2.1infoDev‟s Goals: ...................................................................................................................................................... 10
2.2 Innovation Centers ................................................................................................................................................ 10
2.4 Climate Innovation Centers ................................................................................................................................. 11
2.4 Stakeholder engagement process ..................................................................................................................... 11
3.0 Climate Technology Market Landscape: India .................................................................................. 12
3.1 Defining Climate Technologies in Indian context ............................................................................................ 12
3.2 Technology Prioritization ....................................................................................................................................... 13
3.3 Stakeholder analysis .............................................................................................................................................. 16
3.4 Stakeholder mapping matrix ............................................................................................................................... 18
4.0 Climate Innovation Analysis: India......................................................................................................... 19
4.1 Gaps along the value chain ................................................................................................................................ 19
4.2 Technology Gaps ................................................................................................................................................... 20
4.3 Company Gaps ..................................................................................................................................................... 20
4.4 Finance Gaps ......................................................................................................................................................... 22
4.5 Market Gaps ........................................................................................................................................................... 23
4.6 Policy Gaps ............................................................................................................................................................. 23
5.0 Indian Climate Innovation Center Model ............................................................................................ 25
CIC model addresses local Indian market gaps .................................................................................................... 25
5.1 Vertical Pillars .......................................................................................................................................................... 27
5.2 Horizontal pillar ....................................................................................................................................................... 31
6 Implementation Plan ................................................................................................................................... 33
6.1 Implementation Plan (phase 1) ........................................................................................................................... 33
6.2 Management Plan................................................................................................................................................. 33
7.0 Financial Plan ............................................................................................................................................. 36
7.1 Budget Year 1-4 ...................................................................................................................................................... 36
7.2 Second round funding: Years 5+ ......................................................................................................................... 36
7.3 Sustainability ............................................................................................................................................................ 38
7.4 Co-investment and leverage .............................................................................................................................. 39
7.5 Funding/Fundraising plan ..................................................................................................................................... 40
7.6 Implementation oversight and governance .................................................................................................... 42
8.0 Outcomes and Impact ............................................................................................................................ 44
8.1 Technology impacts .............................................................................................................................................. 44
8.2 CIC performance Indicators: ............................................................................................................................... 45
8.3 Monitoring and Evaluation ................................................................................................................................... 47
9.0 Risks .............................................................................................................................................................. 48
10.0 Conclusion ............................................................................................................................................... 49
November 03, 2010 Page | 6
1.0 Executive Summary infoDev‟s Climate Technology Program is
developing business plans for the financing and
implementation of Climate Innovation Centers
(CICs). Such centers form a holistic country-driven
approach to accelerating the development,
deployment and transfer of locally relevant
climate technologies. This business plan outlines a
required investment of USD 16 million over 4 years
to establish a CIC in India. This investment includes operations, programs, investments
and implementation. In the first four years, the CIC will create more than 70 sustainable
climate technology ventures, generating 4,800 direct and indirect jobs at a cost of
approximately USD 3,300 per job and over 36,000 jobs within 10 years at an average
cost of less than USD 900 per job1. With investment returns and other potential revenue,
the center aims to be between 70%-100% financially sustainable after 10 years. A
leverage of 1:1 in cash and in-kind contributions from local public and private partners
is anticipated in the first 4 years of operations.
1.1 Context:
India faces numerous development challenges that intersect directly with the global
climate change agenda. This underscores the critical need to stimulate climate
innovation and the growth of new clean technology industries in India:
While per capita CO2 emissions are minimal, India‟s aggregated CO2 emissions from
fossil fuels are the fourth highest in the world (1,293 mmt of CO2 in 2006) 2.
Current power generation capacity of ~150 GW3, primarily from coal, is far below
the 460GW needed to meet demand by 2030. Challenges distributing this power
further exacerbate the energy divide with over 400 million Indians having no
connectivity to a power grid4.
India is the fifth largest petroleum oil consumer globally.5 Energy security is an
increasingly important issue, as 72% of crude and refined products are imported6
and petroleum-based fuel subsidies accounted for 2% of GDP (in 2008) 7.
Energy for cooking and heating is often sought through biomass based fuels such as
wood, leading to in-home pollution, causing over 400,000 deaths8 in India annually,
deforestation, and adding to the regional and global effects of black-carbon.
1 Average investment required to create a job within the CIC will continue to decline over time. 2 Energy Information Agency (2007) 3 Central Electricity Authority, Ministry of Power 4 TERI (2010) 5 IEA/OECD 6 International Energy Agency 7 ADB (2009) Working Paper 150 8 Smith (2000) National Academy of Science
November 03, 2010 Page | 7
Access to water is an immediate concern, as India accounts for 17% of the world‟s
human population but has only 4% of its water resources9.
The agriculture sector, employing 66% of India‟s workforce, is under serious threat
due to a mix of increasingly unpredictable rainfall, hotter temperatures and more
expensive resource inputs such as water and fertilizer.
1.2 Process:
Over the course of an eight-month process, infoDev engaged with Indian stakeholders
from relevant sectors: R&D facilities, universities, incubators, industry, SMEs, investors,
NGOs, and international institutions operating in India. This multidisciplinary group gave
both rich and diverse feedback which fed directly into the results of the business plan.
Firstly, infoDev identified the most critical gaps facing climate innovation across the
following journeys: technology, company, finance, markets and policy. Secondly,
infoDev prioritized six technologies on which the India CIC could focus including water,
energy efficiency, agriculture, solar, transportation and bio-based energy. Finally,
based on these learnings, the mission and core goals of the CIC were designed:
1.3 Model:
The CIC‟s mission and goals, to be delivered through a range of services and programs,
are summarized below:
Finance
Providing risk capital through a flexible fund that offers financing at various levels
including proof of concept ($10 – $50K), pre-seed ($100 – $250K) and seed ($250K -
$750K).
9 TERISCOPE, March-April, 2010
Mission
To create, leverage and aggregate a holistic portfolio of programs, services and financing in India that bridge local market gaps and support the
accelerated growth of innovative climate technology ventures
CIC Core Goals - Fill market gaps by:
1. Providing access to flexible finance at a number of strategic levels;
2. Building capacity of new and existing enterprises and facilitating the interaction of innovative ideas , technologies and enterprises with large industry;
3. Enabling collaboration and supporting an ecosystem that aggregates existing partners;
4. Creating regional clusters of innovation to leverage existing resources and infrastructure.
November 03, 2010 Page | 8
Facilitating other sources of financing through syndicating investors, cataloguing
existing sources of funding and building partnerships with banks to assist in accessing
working capital finance.
Capacity Building
Training and accrediting mentors, providing educational services and toolkits,
providing events and seminars.
Offering hands-on mentoring by packaging advisory services via a network of
accredited services providers.
Providing access to a specialized services fund for high-cost, high-expertise
technical assistance including IPR support.
Ecosystem Development
Coordinating, brokering and funding applied R&D activities including standardizing
commercial terms between industry and domestic R&D institutes and piloting USD
$500K applied R&D competitions.
Forming global technology partnerships through technology sourcing and
international innovation center networking activities.
Providing and facilitating access to a range of analytical and market research
products including the promotion of regulatory good-practice and innovation
policy advocacy.
Innovation Cells
Building regional and technology specific clusters of innovation through accrediting,
leveraging, aggregating and networking existing:
Advisory services: Professional services, incubators and mentors.
Facilities: Labs, testing equipment and universities/incubators.
Industry: Technology partnerships, demonstration projects and manufacturing.
1.4 Impact:
In carrying out this mission the center will measure performance against aggressive
impact and outcome targets over a 4 year period including:
Select, finance, and provide technical assistance & mentoring to over 70 Indian
climate technologists, innovators and new ventures – achieving a 75-85%
survivability rate of enterprises after 3 years of operation.
Generate over 1000 direct jobs and 3800 indirect jobs10 at a cost of less than USD
3,300 per job and over 36,000 jobs over 10 years at cost of less than USD 900 per job.
Achieve a 100% leverage ratio with the private sector for 30% of the investment
funds and achieve an overall 100% leverage of the entire cost of the center via
local cash and in-kind contributions.
10 Spill-over jobs are calculated at 4 times direct jobs. This an average that has been benchmarked from various sources
of data on indirect jobs created in high-tech sectors.
November 03, 2010 Page | 9
Provide increased energy access of up to 1b kWh, contributing to an installed
capacity of over 94MW reaching an additional 1m people11.
Providing over 1b kiloliters of clean water to over 1.5m people.
Improving agricultural efficiency in over 50,000 farms
The CIC will strive towards further financial, social and environmental returns over a 4
year period:
Social: Ensure that the companies and initiatives promoted within the CIC practice
fair treatment to poor and marginalized demographics including creating over 1100
jobs for women and 1200 jobs for youth12.
Financial returns: Achieve 69% sustainability of the total costs and almost 100% of
investment costs of the CIC after the 10th year of operation.
Environmental: Mitigate up to 2.1m tons13 of CO2 by the products/services deployed
by CIC supported ventures.
1.5 Implementation:
The USD 16 million budget for the establishment of the CIC over a 4 year period will
include; 55% for financing, 20% for programs, 15% for staff, 8% for implementation and
2% for facilities. With this initial funding, investors will see concrete economic,
environmental and social returns as outlined above. Furthermore, investors will benefit
from:
1. Exposure to an on-going pipeline of climate technology innovations and new
ventures.
2. Considerable knowledge generated and disseminated through the CIC‟s R&D and
market analysis.
3. Access to the complete network of CIC partners and stakeholders.
4. A primary point of contact for establishing international linkages that can facilitate
technology transfer, as well as business-to-business opportunities and collaborative
R&D.
These are the types of ecosystem impacts that only a well-funded, holistic institution like
the CIC can provide.
11 See impact section of report for further details on assumptions 12 Based on ILO data, infoDev‟s jobs model and Grant Thornton Incubation Report (2009) 13 See impact section of report for assumptions
November 03, 2010 Page | 10
2.0 Climate Innovation Centers Over an eight month period, infoDev has been assessing the feasibility of a locally
owned and operated Climate Innovation Center in India through an intensive
stakeholder engagement process. The process concluded in May 2010 with over 90
stakeholders from varied backgrounds and experiences involved in the
conceptualization, design and development of a CIC in India.
2.1infoDev‟s Goals:
1. Assess the feasibility for establishing a Climate Innovation Center in India and
develop a business model that reflects the Indian market, as well as the national
strategy to address climate change.
2. Based on the outcomes of the feasibility assessment, implement the CIC.
3. Network the Indian CIC regionally and internationally to promote south-south
and north-south learning, business linkages and exploit local and international
synergies for the India climate technology sector.
2.2 Innovation Centers
infoDev supports the innovation ecosystem in developing countries through facilitating
a global network of „business incubation centers‟. These incubators act as hubs to
aggregate financing and shared services to assist innovators overcome market barriers
that are particularly high in developing countries. Experience has shown that these
centers dramatically increase the survival rate of new enterprises with over 75% being
operational after 3 years of exiting the incubator.
As a policy tool, creating such centers of innovative
activity also is a highly effective form of public
spending, with employment generated at a long-term
cost per job of 10 to 30 times less than infrastructure
projects14. Incubation experience also has shown that
for every USD 1 of government subsidy, a Return on
Investment (ROI) of USD 30 tax revenue can be
generated in the long-term through corporate and
income taxes from the spun-out companies15. With
infoDev‟s business incubator network expanding to
over 300 centers in more than 80 developing
countries, generating 20,000 SMES and 220,000 jobs, it
is clear that centers supporting innovative activity are
important building blocks in developing countries‟
private sector development strategies.
14
Grant Thorton Report on Incubation: Source: EDA 15
NBIA (National Business Incubation Association) data
November 03, 2010 Page | 11
2.4 Climate Innovation Centers
As multilateral, national and local solutions are being structured around the world to
address the issue of climate technologies, infoDev‟s Climate Technology Program is
piloting the concept of Climate Innovation Centers (CICs) as a mechanism to support
innovation by offering a full suite of services to address locally relevant barriers to
climate technology commercialization. In addition to supporting promising new
technologies and ventures, these centers could also provide access to; finance,
equipment and facilities, market information, policy advocacy, and technical
assistance, as well as facilitate national and international collaboration. In this way, a
center acts as a national focal point or „one-stop-shop‟ to aggregate efforts in
promoting the growth of locally relevant, indigenous climate innovations and to
facilitate cross-border technology collaboration.
Leveraging Lessons learned:
The foundation of the CIC‟s assessment and feasibility has been based global
experiences in conceptualizing, designing, developing and implementing similar
initiatives. This experience has included infoDev‟s 10 year track record in the
implementation of technology innovation and entrepreneurship programs in over 50
developing countries. Other lessons learned and experiences that have been
leveraged for the CIC feasibility work include the UK‟s Carbon Trust and infoDev‟s
Global Assessment Report on CICs prepared in collaboration with UNIDO and
Bloomberg NEF (due September 2010). This study showcases an inventory of 70
innovation centers around the world, including 5 detailed case studies on CGIAR, NVI -
India, UNIDO NCPCs, CIETEC - Brazil and the Baoding National New and High-tech
Industrial Development Zone - China.
2.4 Stakeholder engagement process
The Center‟s business model and associated services are
dependent on and tailored to the local market. To identify market
needs, opportunities and challenges from a local perspective,
infoDev conducts a feasibility analysis via an in-country multi-
stakeholder engagement process and sector mapping exercise of
the climate innovation landscape. Stakeholders are then
convened for a series of workshops and interviews to explore the
key barriers to climate technology commercialization and assist in
the development and design of a business plan to establish a CIC.
November 03, 2010 Page | 12
3.0 Climate Technology Market Landscape: India
3.1 Defining Climate Technologies in Indian context
India is characterized by the following challenges, which intersect directly with the
global Climate Change agenda:
Current power generation capacity of ~150 GW is far below what is needed to
meet social development targets. For example, China has five times this
capacity and continues to grow. The distribution of the available power further
widens the energy divide since over 400 million Indians lack any connection
point to a power grid.
India is the fifth largest global petroleum oil consumer.16 Thus, energy security has
become an increasingly important issue, as 72% of crude and refined products
are imported and petroleum-based fuel subsidies accounted for 2% of GDP (in
2008).
Energy for cooking and heating is often sought through biomass based fuels such
as wood, leading to in-home pollution (causing 400,000 deaths in India annually)
and adding to the regional and global effects of black-carbon.
Access to water is an even more immediate concern because economic
development and climate change have placed (are placing?) further strain on
this already depleted resource. India accounts for 17% of the world‟s human
population but only has 4% of the world‟s water resources17.
Food security is under serious threat due to a mix of (climate and environmental
issues, such as increasingly unpredictable rainfall, hotter temperatures and more
expensive resource inputs like water and fertilizer. Over 65% of the agricultural
land is rain-fed and over 60% of the Indian population works within the
Agricultural sector, further underscoring the necessity of addressing this
vulnerability.
However, these challenges are also opportunities. India already has one of the lowest
environmental footprints per capita in the world. For example, it has 1/10th the carbon
footprint of industrialized countries - although the total size of the population adds up to
a large footprint at a country level. By adopting and adapting new technologies, India
can maintain or better its environmental balance, while allowing for significant
development improvements. India could become a global leader in charting a path
for a sustainable future while continuing to industrialize. Some growth in this area has
already begun. Sustainable energy investment attracted close to USD 4 billion in 2008
and HSBC forecasts that India will receive around USD150 billion in investments during
2008-2017. The key will be to fast track and direct this investment.
16 And one of the fastest growing at 5% p.a. growth expected during 2007-2012 vs. 1.6% population growth (energy
consumption in the OECD countries generally tracks population growth) 17 TERISCOPE, March-April, 2010.
November 03, 2010 Page | 13
3.2 Technology Prioritization
While the CIC will maintain an inclusive strategy in its initial phases, offering its services to
most climate related sectors, the Indian stakeholders voiced a strong recommendation
for prioritizing certain sectors that (1) have a high-potential but are currently under-
developed in India, (2) are well-suited for the targeted capabilities of a CIC and (3) will
have the greatest climate and development impacts for India.
The process of prioritization involved three key steps:
1. The infoDev team evaluated all the technology sectors using criteria to measure
market opportunity, business viability, and potential impact. See the table below
for the detailed evaluation and Annex 2 for full analysis18.
2. Stakeholders ranked the climate technologies most suitable for the CIC.
3. Technologies were benchmarked against leading government policies to ensure
that the CIC‟s focus would align with the Government of India‟s priorities and the
National Action Plan for Climate Change (NAPCC).
The weighted average of these three steps resulted in the selection of six key
technology areas: water, energy efficiency, sustainable agriculture, solar, transportation
and bio-fuels. It should be noted that the CIC does not intend to neglect other sectors;
however, it will develop specializations in specific sectors and focus on creating expert
and tailored services to ensure that one or more of the previously mentioned categories
will be fostered and scaled up over time.
18 Adapted by infoDev: Nortech
November 03, 2010 Page | 14
TR Technology Readiness Potential of the technologies to enter the market in the
near future
MD Market Demand Market pain-point, product subsidies, consumer
orientation, competing technologies, affordability etc.
AF Availability of Funding Near-term fund for R&D, commercialization and
expansion
RS Clear, Ready Stakeholders Stakeholders able to affect the likelihood of adoption of
a given technology
BM Business Model How viable is the business model today? Includes supply
chain, distribution, consumer access.
IR Leverage of Indigenous
Resources
Ability to utilize and/or leverage natural resources and
endowments
EC Entrepreneurial Capacity Existence or ability to develop/recruit talent to make the
technology companies successful
WF Workforce Current or potential workforce capabilities necessary to
commercialize and scale given technology
PO Policy Regulations, incentives and policies impacting a given
technology
EI Economic Impact Impact of a given technology on local economy
including the creation of jobs
GI GHG Impact Impact of a given technology on emission reduction
SI Social Impact Impact on rural areas, specific demographics (e.g.
Women) and base of the pyramid markets
AT Already on Track MULTIPLIER: There is good traction in the market for
these technologies as barriers are low - therefore further
innovation or intervention is not required
We present below the opportunities in the six prioritized technologies. For each, facts
for the strategic importance and commercialization potential are provided in Annex 2.
Code Evaluation Criteria Description
(H) High (M) Medium (L) Low
Technology 1: Water
TR MD AF RS BM IR EC WF PO EI GI SI AT
Water H H M H L H H H M M M M L
Main technologies: Decentralized treatment plants and water reuse systems.
Markets/applications: Domestic use, agricultural use, industrial use, recycling/waste
water treatment, water use efficiency. Markets broken out into domestic (5%), industrial
(6%), agricultural (89%)1
Score: 4.1/5.0
November 03, 2010 Page | 15
Technology 4: Solar
TR MD AF RS BM IR EC WF PO EI GI SI AT
Solar H L M M H H L L M M H H L
Sub-technologies: Solar PV, concentrated solar, solar thermal, solar cSi, solar thin film.
Example Business Models: Distributed power, grid infrastructure, domestic/SME use, solar
based appliances/devices
Score: 3.7/5.0
Technology 3: Agriculture
TR MD AF RS BM IR EC WF PO EI GI SI AT
Agri H M M H M M H H L H H H L
Sub-technologies: Resilient crops/seeds, climate-friendly / EE agricultural machinery, EE
irrigation, EE food processing, climate friendly alternatives to pesticides and fertilizer
Example Business Models: Smallholders, industrial farming, organics vs GM/biotech
Score: 3.8/5.0
Technology 2: Energy Efficiency
TR MD AF RS BM IR EC WF PO EI GI SI AT
EE H H M H M H M H M H H M L
Sub-technologies: Energy efficient buildings, manufacturing, T&D, IT, Materials, consumer
products (lighting, appliances), energy audits, industrial processes
Example Business Models: ESCOs, energy auditing, business process re-engineering,
smart grids.
Score: 3.9/5.0
November 03, 2010 Page | 16
3.3 Stakeholder analysis
Through the stakeholder engagement process, infoDev compiled a comprehensive
analysis of the climate innovation players in India and, specifically, in the six priority
sectors. The challenge for the CIC is to collaborate with and enhance existing
initiatives, rather than to overlap or compete with the numerous institutions already
working in these sectors. The following section outlines the current climate technology
stakeholder landscape in India, highlighting those actively involved in the prioritized
sectors. They include:
R&D institutions
Universities
Business Incubation
Industry – Large
Industry – Small
NGOs
Consultants
International Inst.
Financiers
Technology 6: Bio-Energy
TR MD AF RS BM IR EC WF PO EI GI SI AT
Agri H L M M L H L M M H M H L
Sub-technologies: Bio-gasification; bio-diesel, biomass power & heating
Example Business Models: Distributed generation (grid-connected or mini-grid), fuel
supply chain, domestic/SME products.
Score: 3.5/5.0
Technology 5: Transportation
TR MD AF RS BM IR EC WF PO EI GI SI AT
Agri H M M H M M M M L M H M L
Sub-technologies: Liquid fuels, electric vehicles, efficient motors, regenerative brakes,
advanced batteries
Example Business Models: Mass transit, rural public transport, commercial transport,
personal vehicles
Score: 3.7/5.0
November 03, 2010 Page | 17
Stakeholder vs Sector Mapping Matrix
R&D
Institute TERI, DST, DBT, SPRERI, TIFR, CSIR, SEC, TIFAC, NRAI, ACRI, ATREE, SSS-NIRE, SPRERI
GOI/Policy MNRE, BEE, MoEF, MoA, MoT,, CII-GBC,
Universities IIT Kanpur, IIT Delhi, IIT Bombay, IISc Bangalore, IIT Roorkee, IITK Kharagpur, IIT Madras, DTU, UAC, NIEPR, ISB,
IIM Bangalore, IIM Ahmedabad, TERI University, Deen Dayal Petroleum University
Incubators SIIC, FITT, SINE, STEP, CIIE, TREC STEP, ABI-ICRISAT, ICICI Knowledge Park, BTI Society
Industry&
SMEs
Desi Power
Sharada
Inventions
Selco
Orb Energy
Sun Air Power
Vaigunth
Enertek
Ammini Solar
Solkar
AutoBoxx
Natureswitch
Selco
Duron
D.light
Innovlite
HMX Sumaya
Megha
Insulations
ConnectM
Tribi Embedded
Technologies
Waterlife India
Greentech
Aqua
Save the
Environment
Puretech India
Cleanstar
Energy
Vayugrid
Ankur Scientific
Desi Power
Husk Power
Saran
Renewable
ABI Energy
Avant Grade
Zameen
Organics
ABT Bio
Products
Aakruthi
Agricultural
Associates of
India (AAI) -
ICRISAT/ABI
Accura
Bikes
Go Green
BoV
Eko Vehicles
Industry-
Large
Tata BP Solar
Moser Baer
GE
IBM
BHEL
Kotak Urja
Titan Solar
Solar
Semiconductor
Maharshi Solar
Applied
Materials
Tata Power
Intel
GE
IBM
Enercon
Conzerv
Schneider
GE
Ion Exchange
India
Tata Chemicals
Praj
Mission New
Energy
Monsanto REVA
NGO
WISE, C-STEP , NVI, Sankalp Forum, Winrock, WRI, Nandi Water Foundation, PWX, USAID, IRG/Eco-III.
Arghyam, Sankalp Forum, Avishkar, AEEE , NEN, TiE, National Innovation Foundation, Alliance to Save
Energy, Climate Works,
Consulting McKinsey, PwC, E&Y
Internat’l World Bank, UN, IFC, ADB, IRG, USAID, UNDP, UNEP, DFID
Financiers
Acumen Fund, I2india, IAN, DFJ, NEXUS, IDG Ventures, Sequoia Capital, Foundation Capital, ICICI, KSK,
DST, DBT, SBI, SIDBI, NABARD, IREDA, YES Bank, Applied Ventures, Siemens, New Energy India, IREDA, KPCB,
Sherpalo
For more detailed information on the ongoing activities and initatives of the above
stakeholders, please see Annex 3.
Solar EE Water Biofuel/Biomass Agriculture Transport
Government of India‟s Commitment to Climate Innovation Centers:
In 2009 at the Delhi Technology Development and Transfer Conference, the Prime
Minister of India, Manmohan Singh, expressed India‟s commitment to Climate
Innovation Centers; “India has proposed the setting up of an international network of
Climate Innovation Centers (CICs) which should act as vehicles for enhancing
technology innovation and capacity building in developing countries. Each such
center could focus on a key technological product that addresses climate change.
The CICs in different countries may also cross-fertilize each other by sharing of
„learning-by-doing‟ experience.”
November 03, 2010 Page | 18
3.4 Stakeholder mapping matrix19
Graphic illustrates ongoing activities of various stakeholders mapped to the innovation value chain. Gaps highlight areas
of CIC focus. Overlap is indicative of potential partnerships and collaboration.
19 Adapted by infoDev: Nortech
November 03, 2010 Page | 19
4.0 Climate Innovation Analysis: India
4.1 Gaps along the value chain
Over an eight-month period, which included two formal workshops, infoDev engaged
with its climate technology stakeholders to identify the specific gaps and needs of
climate technology innovation in India. The major gaps arise in five core areas20:
technology, company, finance, market, and policy.
Technology: Supporting local and adapted technology innovation.
Company: Building a pipeline of workforce capacity and sustainable ventures.
Finance: Ensuring access to flexible risk capital.
Market: Creating new and expanding existing local and global markets.
Policy: Informing, linking and transforming innovative policy mechanisms.
These gaps were then mapped to corresponding needs which were then translated
into the activities, programs and services of the center i.e. the model.
20 Adapted by infoDev: Carbon Trust
Gaps Needs Solutions
November 03, 2010 Page | 20
4.2 Technology Gaps
According to stakeholder feedback, the greatest technology gaps exist in the areas of
creating effective R&D, adapting technologies to local needs and linking the lab to the
market.
Gaps Needs
R&D conducted in isolation without
market inputs
Reduce fragmentation and lack of
knowledge of R&D opportunities
Many technologies stuck in labs and
never see the market
Standardize contractual agreements and
commercial terms with industry
R&D diluted and not focused on a
few high impact solutions
Systematic facilitation of collaborative R&D
with focus on technologies that create high
impact solutions
Adaptation of available technologies
to local needs
A knowledge database with assessment of
potential for localization of worldwide
technologies
Limited resources for prototyping and
testing in clean tech space
Access to prototyping and testing facilities to
innovators and entrepreneurs in their
commercialization journey
Standardize contractual agreements and
commercial terms with facility providers
Lack of information sharing and
collaboration amongst R&D centers,
institutes, and industry
A support system for global collaboration on
R&D, technology transfer and knowledge
sharing
4.3 Company Gaps
The company journey starts with the individual and continues through the start-up and
growth phases of new ventures. According to stakeholder feedback, entrepreneurial
capacity, which encompasses human, financial, and operational activities, is lacking.
Technology
Supporting local and adapted technology innovation
Case Study: Technology Gap (See Annex 4)
Sunair Power - Bangalore, IIMA-CIIE Incubated: Founded 2006
Sunair's 'Micro-Hyrbrid Generator' which captures both wind and solar energy and charges a storedbattery, is still being developed to meet market requirements. The period of development has takenseveral years with the product just now taking commercial form. Accelerating the productdevelopment process would help decrease time to market.
November 03, 2010 Page | 21
Gaps Needs
Lack of seasoned entrepreneurs Build a pool of seasoned and trusted mentors
available to entrepreneurs
Enable trusted match-making
Ensure international mentors have an
understanding of doing business in India
Provide an avenue to recognize and reward
„heroes‟ in the cleantech sector
Incubators do not have capacity to
build successful climate technology
companies
Network and train incubators
A pool of inexpensive but high quality service
providers
Reduce fragmentation of existing incubators,
experts, mentors and services
Unstructured handover of ideas from
innovators to entrepreneurs
A platform to connect innovators to
entrepreneurs - link technologies and
innovations to aspiring entrepreneurs, &SMEs
Lack of experienced clean tech
mentors & lack of willingness for
mentoring amongst entrepreneurs
Prepare seasoned entrepreneurs and
professionals to provide effective mentoring
Bridge gap in expectations between
entrepreneurs and mentors
Quality of services is assured through an
accreditation
Lack of end-to-end support Local proximity to handhold entrepreneurs
through company journey
Contracts between service providers and
service users can be standardized
Financing paired with credible services
providers to ensure symbiotic use of funding
and advisory services
Financial inability of entrepreneurs to
access expensive advisory services
A pool of inexpensive but trusted service
providers available to all entrepreneurs
Services made available, even to
entrepreneurs who can‟t afford them
Industries not supportive of
entrepreneurs and innovators
Improve credibility and accessibility of
entrepreneurs and companies that leverage
the CIC‟s brand name
Company
Building workforce capacity and a pipeline of sustainable enterprises
Case Study: Company Gap (See Annex 4)
Husk Power - Bihar, Uttar Pradesh: Founded 2007
The company is at a critical stage of growth to expand from 30 to 2,000 systems sold within 4-5 years.The company must reach this level of scale to achieve attractive financial returns. The entrepreneursare young and require additional business support to form an effective franchising strategy. In orderfor the company to successfully scale and achieve a tangible impact on rural electrification, theyrequire mentoring and business advisory support, which is often inaccessible to start-up companies inIndia, especially cleantech companies.
November 03, 2010 Page | 22
4.4 Finance Gaps
The financial journey often begins with concessionary funds (from a government or a
charity) and continues with venture capital and commercial debt to reach public
equity. According the stakeholder feedback, the main gaps are found in establishing
flexible, early-stage risk capital.
Gaps Needs
Lack of Valley-of-Death financing Bridge „valley of death‟ funding gaps with
earlier stage financing options
Fragmentation of existing financing
sources in market
“Crowd-in” multiple private sector
investment
Reduce fragmentation and lack of
knowledge of funding options available
Perception of high-risk in climate
technologies sectors for private
funding alone
Reduce risk and incentivize private sector
investment
Lack of debt finance from banks Standardize contractual agreements and
commercial terms with banks
Most technologies still looking for
market and hard to fund
Link market opportunities to technologies to
attract funding – make entrepreneurs
investment ready
Far and few technology innovations
based businesses
Business model innovation to adapting
technologies to local needs in India.
Scarce deal flow of climate related
companies
Lack of critical mass of pipeline for
financial institutions
Make funding simple, transparent and easy
to apply for
Improve credibility and accessibility of
entrepreneurs and companies that leverage
the CIC‟s brand name
Limited internal capacity of financial
institutions to conduct due diligence
Lack of exit options
Increase market education on potential of
sector
Research and tracking of market demands
and trends
Link market opportunities to technologies to
attract funding
Finance
Ensuring access to flexible risk capital
Case Study: Finance Gap (See Annex 4)
Sustaintech/ TIDE - Tamil Nadu: Spun-out 2009
The company’s stage of development and capital requirement places this company in the “valley-of-death” where there is a great scarcity of investors with the risk appetite to support these enterprises.Sustaintech has been seeking investments for more than 18 months with no success, despite receivingaccolades such as the Ashden Awards, the Sankalp Social Enterprise Business Plan Competition and theNewVentures India coaching.
November 03, 2010 Page | 23
4.5 Market Gaps
Ensuring accurate market information and accurately evaluating technologies are two
areas, according to stakeholder feedback, that require further attention.
Gaps Needs
Technology entrepreneurs and
innovators often lack market
information to create viable business
Research and tracking of market demands
and trends
Identify market needs, and match them to
available technologies
Entrepreneurs too tech-focused with
no consideration to market needs
A platform to connect innovators to
entrepreneurs - links technologies and
innovations to aspiring entrepreneurs, &SMEs
Instill business and finance knowledge to the
entrepreneurs who are typically technology
experts
Teach soft skills to tech-savvy one-dimensional
entrepreneurs
Consumers don‟t understand
technology and/or too price sensitive
Increase market education on potential of
sector
Research and tracking of market demands
and trends
Work with policy makers and government to
raise awareness
4.6 Policy Gaps
Policy formation results from general requirements that are revised to meet specific
needs over time. Often the first step to creating a policy is introducing a general
umbrella regulation and, as the policy is implemented, more technology specific
policies emerge until there is a comprehensive framework in place. The stakeholder
feedback reveals that policies are viewed as a critical driver of clean technology
markets, but too often policies are nonexistent or lacking input from enterprise and
industry.
Market
Creating new and expanding existing local and global markets
Case Study: Market Gap (See Annex 4)
Samki Tech Resources - Hyderabad: Founded 1998
In the ealier stages of development, the company's product was not widely known and accepted inthe market due to the unproven nature of the technology. Particularly policy is not supportive ofwaste management which would help create a viable market. Therefore, Samki had a very difficulttime raising funds for the prototype and first demo plant. An intervention at this stage would help toassist in proving the concept and producing a viable business proposition to both consumers andinvestors.
November 03, 2010 Page | 24
Gaps Needs
Lack of policies to create viable
clean technologies markets
Provide market and technology inputs from
industry and experts in the SME sectors to
policy makers
Work with policy makers and government to
raise awareness
Clean tech market is created and
driven by policy - entrepreneurs‟
inputs missing in policy making
Provide entrepreneurs a platform for unified
voice in the policy making
Policy
Informing, linking and transforming innovative policy mechanisms
Case Study: Policy Gap (See Annex 4)
DWP/DURON - Gujurat Uttar Pradesh, Karnataka: Founded 2007
The government spends up to $3 billion each year in kerosene subsidies to households andcustomers. These subsidies impede the adoption of clean, safe technologies for low-incomehouseholds. By reducing the price of kerosene, the government can reduce the incentive forrural consumers to purchase alternative sources of lighting. If these subsidies were repurposed toincentivize the adoption of solar lighting, the product could be scaled and deployed more rapidlyto rural communities.
November 03, 2010 Page | 25
5.0 Indian Climate Innovation Center Model
CIC model addresses local Indian market gaps
Stakeholders have designed this CIC model to respond to the myriad of gaps illustrated
in Section 4. The model will address the majority of the needs of each priority sector
through the following initiatives:
1. Giving access to flexible finance at a number of strategic levels.
2. Building capacity of new and existing enterprises and facilitating the interaction
of innovative enterprises with large industry.
3. Enabling collaboration and supporting an ecosystem that aggregates existing
partners.
4. Creating regional clusters of innovation to leverage existing resources and
infrastructure.
5. Providing a hub for building international partnerships that can facilitate
technology transfer and collaborative R&D, as well as business to business
linkages.
The first three initiatives above form the vertical pillars of the CIC‟s model (finance,
capacity building and collaborative ecosystem). Each supports a number of functions
that are outlined in the diagram below. Over time, the CIC will develop a horizontal
pillar of Innovation Cells (initiative 4 above), strategically located in cities across India.
Each of these Cells will most likely specialize in a technology, so that relevant research
and expertise can be geographically concentrated for optimal collaboration.
See ‘Why this not that’ section in Annex 7 for more details on why specific program,
services and activities were selected for India based on a portfolio of different
programmatic options that were considered.
November 03, 2010 Page | 26
CIC Model: India
November 03, 2010 Page | 27
Pillar 1: Finance
5.1 Vertical Pillars
The following section dives into each of the three vertical pillars, outlining the specific
activities and needs identified in section 4. The scope of each activity is explained in
greater detail in Annex 5.
Risk Capital
Fund
Investment
Facilitation
Activities:
Proof of concept (up to US$ 50K)
Pre-seed investments (US$100-
US$250K)
Seed investments (US$250K-
$US750k)
Facilitate funding sources by leveraging
center‟s brand and relationships:
Syndicate to leverage other grant,
loan and equity investments
Database of financial support
available from public and private
sources
Facilitate working capital financing
from banks
Needs
Addressed:
Bridge „valley of death‟ funding
gaps with earlier stage financing
options
Reduce risk and incentivize
private sector investment
“Crowd-in” multiple private
sector investment
Make funding simple, transparent
and easy to apply for
Reduce fragmentation and lack of
knowledge of funding options
available
Improve credibility and accessibility of
entrepreneurs and companies that
leverage the CIC‟s brand name
Link market opportunities to
technologies to attract funding
Standardize contractual agreements
and commercial terms with banks
Finance
Details:
Investment criteria: Will be developed by the investment team hired by the
CIC. The broad metrics upon which the CIC will invest:
Level of Innovation
Potential business viability
Climate & social impact
Funneling strategy: The CIC will aim to have each stage of investment feed into
the next, ideally, with a projected ratio of:
10 POC 5 Pre-seed 2 Seed
Why this not that? Finance
See annex 7 for details on stakeholder rationale for deciding on the types of financing instruments the India CIC would provide
November 03, 2010 Page | 28
Risk Capital Fund details:
POC Grants Investment size:$10-50K
Grant
0% co-investment required, entrepreneur skin-in-the-
game (cash and/or in-kind) required.
Pre-seed Investments Investment size: $100K-$250K
Structure: pre-series A equity, convertible note
Co-investment & entrepreneur skin-in-the-game (cash
and/or in-kind) required
Seed Investments Investment size: up to $500K
Structure: Pre-series A equity / convertible note; series A
equity; debt
Target for 30% portfolio to receive 1:1 co-investment
Co-investment & entrepreneur skin-in-the-game (cash
and/or in-kind) required
Level of Innovation
The CIC proposes to invest in a broad range of technology sophistication, from
technology that is adapted for the low cost mass market (often simplified and
deconstructed) to technology that has the potential for significant export market
revenues. While highly sophisticated technology companies can play a significant
role in climate mitigation at an international level, more basic innovations have the
power to be transformative on a mass scale too. It is important that the CIC works
across the full spectrum of innovation. In the financial modelling of the center, the
pipeline of technology companies has been differentiated based on an innovation
scale of 1-10 (1 - Adaption of low-cost product or service for local conditions versus
10 - products and services with international markets and global scalability).
Assumptions around expected deal flow take into consideration this methodology.
See Annex 11.
Lev
el o
f In
no
va
tio
n
10
5
1
Cost of developmentRequired level of sophistication of supporting innovation ecosystem
Products or services with international/export market potential
Products or services with regional market potential
Adaptation of low-cost product to local ‘mass market’
Levels of Innovation
E.g. Drip irrigation
E.g. UV sterilization
E.g. Nano-desal
November 03, 2010 Page | 29
Pillar 2:
Capacity
Building
Mentor
Training
Education and
Events
Advisory
Services
Activities:
Train the Trainer Program:
Provide informational
training
Define guidelines for
mentors / mentees
Create tools for easy
access to mentors,
interaction with
mentees and tracking
progress of mentoring
Enhance mentoring
capacity of incubators
Train mentors abroad
Courses of strategic
value to entrepreneurs
Toolkits such as the IFC
SME toolkit
Seminars and other
events organized
monthly.
Training program for
general client –
potential revenue
source
Specialized Services
Fund to finance
specialized advisory
services such as
product design,
engineering and IPR
support
Packaged services
provided on a case-
by-case basis
Accredited service
providers within
innovation cells to
build critical mass of
quality service
providers
Needs
Addressed:
Build a pool of
seasoned and trusted
mentors available to
entrepreneurs
Prepare seasoned
entrepreneurs and
professionals to provide
effective mentoring
Enable trusted match-
making
Bridge gap in
expectations between
entrepreneurs and
mentors
Ensure international
mentors have
understanding of doing
business in India
Build entrepreneurial &
talent capacity
Instill business and
finance knowledge to
the entrepreneurs,
who are typically
technology experts
Work with policy
makers and
government to raise
awareness
Teach soft skills to
tech-savvy one-
dimensional
entrepreneurs
Provide an avenue to
recognize and reward
„heroes‟ in the
CleanTech sector
Financing paired with
credible services
providers to ensure
symbiotic use of
funding and advisory
services
Services made
available even to
entrepreneurs who
can‟t afford them
Quality of services is
assured through an
accreditation
Why this not that? Capacity Building
See annex 7 for details on stakeholder rationale for deciding on the types of capacity and human capital building programs including more details how the center will handle IPR issues.
November 03, 2010 Page | 30
Pillar 3:
Ecosystem
Development
R&D
Coordination*
Markets
& Policy
Activities:
R&D Brokering: Facilitates and brokers
joint R&D proposals and sponsored
research both nationally and
internationally by standardizing
contractual and commercial terms.
Technology sourcing: Links with
international patent databases; builds
and updates a platform/wiki to connect
to int‟l technology partners; establishes
best known solutions for spectrum of
innovations for local needs.
R&D Competitions: Pilots applied R&D
grants (up to USD 500k) through an
international RFP process. This
competition would finance international
joint projects for highly specific technical
barriers to priority Indian technologies.
International CIC network: Develops
global partnerships with other centers
and institutions to exploit opportunities in
technology transfer, joint R&D and B2B
linkages
Analytical products: Quarterly
market reports, annual
specialized reports, annual
policy assessment reports on
sector trends, market demands
and global best practice.
Market and Product
Information: Consumer reports,
performance data on types of
technologies; product quality
reviews etc.
Policy Advocacy: Fellows work
with policy makers to provide
advice, reports and round-
tables on climate innovation
policy best practice. The CIC
will act as advocate/lobbyist
for climate innovation in India,
working to reverse perverse
subsidies and reform regulation
that supports the growth of
new industry and the roll-out of
new technologies.
Needs
Addressed:
Systematic facilitation of collaborative
R&D with focus on technologies that
create high impact solutions
Reduce fragmentation and lack of
knowledge of R&D opportunities
Standardize contractual agreements and
commercial terms with industry
A support system for global collaboration
on R&D, technology transfer and
knowledge sharing
A platform to connect innovators to
entrepreneurs - links technologies and
innovations to aspiring entrepreneurs, &
SMEs
Research and tracking of
market demands and trends
Identify market needs, and
match them to available
technologies
Provide market and
technology inputs from
industry and experts in the SME
sectors to policy makers
Provide entrepreneurs a
platform for unified voice in
the policy making
Increase market education on
potential of sector
* The four activities within „R&D Coordination‟ are specifically designed to facilitate cross-border technology
cooperation and collaboration and promote south-south and north-south technology transfer
Why this not that? Ecosystem Development
See annex 7 for details on stakeholder rationale for deciding on the types of activities the India CIC would provide to help develop an innovation ecosystem
November 03, 2010 Page | 31
Pillar 4:
Cell Network
5.2 Horizontal pillar
The Horizontal Pillar in the CIC model will build regional Innovation Cells in various cities
in India with the central facilities (vertical pillar activities) based in New Delhi. These
clustered Cells will be launched in year 2 and beyond, once the CIC has established a
strong base of operations. Conceptually, these Cells along with the central facility form
a hub-and-spoke model, as shown in the model below. It was concluded that while
Cells that group technology specialized expertise would lead to greater impact in the
long term, Cells would initially need a geographic focus to build critical mass of such
expertise. The primary role of these Cells would be to provide local support to the
technologists, entrepreneurs and new ventures through their journey to market. These
cells would be staffed with decentralized „Partnership Development Managers‟ to
coordinate the activities of the center locally, including mentor networks, local
capacity building, access to industries, and interfacing with other local centers of
excellence, institutes, and facilities. The partnership development staff would also be on
the „front line‟ to source deals and work with partners to identify potential deal-flow for
the Delhi investment team.
Interaction with existing infrastructure: The Center and Cells are designed to
complement the existing activities and infrastructure in India. Their role is to bridge gaps
between these players and „connect the dots‟ with the CIC beneficiaries.
Access to Advisory Services
Access to Facilities
Access to Industry
Activities:
The CIC accredited
service providers can
enter a regional
„Innovation Cell‟.
Verifies and ensures
quality of service providers
and links them to each-
other
Builds a critical mass of
expertise in areas where
service providers are
fragmented
Incubators: Office
space and facilities
Laboratories: Access to
key laboratories at
universities, research
institutes and
government
organizations
Testing and
Demonstration facilities:
Access to testing and
demonstration centers
Technology
Partnerships: Enables
joint development of
technologies and
products with industry
Demonstration: Access
to industry for product
demonstration
Manufacturing: Links up
with industry that could
help manufacture the
product for SMEs
Example: CIIE (Center for Innovation Incubation and Entrepreneurship) at IIMA has
established a strong clean tech network which includes mentoring and Entrepreneur-in-
Residence programs for clean energy entrepreneurs. It is also establishing a clean energy
fund for seed and early stage start-ups. Through partnering with CIEE, the CIC would
leverage CIEE‟s expertise and network. This would include using CIEE‟s existing mentor
network, EIR program, seed fund, and business plan competitions to create potential
pipeline. Their physical location in Ahmedabad could also be used to incubate some of the
CIC ventures. CIIE in return would have access to the CIC‟s capacity building programs, TA
fund and investment funds. (For more examples of how the Cells function, see Annex 6.
November 03, 2010 Page | 32
Needs Addressed:
Reduce fragmentation of
existing incubators,
experts, mentors and
services
Local proximity to
handhold entrepreneurs
through company journey
Contracts between
service providers and
service users can be
standardized
Build a pool of seasoned
and trusted mentors
available to entrepreneurs
Enable trusted match-
making
Access to prototyping
and testing facilities to
innovators and
entrepreneurs in their
commercialization
journey
Improve credibility and
accessibility of
entrepreneurs and
companies that
leverage the CIC‟s
brand name
Standardize
contractual
agreements and
commercial terms with
facility providers
Access to prototyping
and testing facilities to
innovators and
entrepreneurs in their
commercialization
journey
Improve credibility and
accessibility of
entrepreneurs and
companies that
leverage the CIC‟s
brand name
Standardize contractual
agreements and
commercial terms with
facility providers
Innovation Cell Model:
Why this not that? Innovation Cells
See annex 7 for details on stakeholder rationale for deciding why to establish regional clusters for innovation
November 03, 2010 Page | 33
6 Implementation Plan
6.1 Implementation Plan (phase 1)
The diagram below shows the staged roll-out plan for the India CIC based on infoDev‟s
experience with implementing similar programs and centers. Year 1 will be a critical
time for securing the requisite funding, establishing the infrastructure and making key
hires. The majority of the CIC programs will be launched by Year 2, while Years 3 and 4
will be focused on the scaling of financial investments.
6.2 Management Plan
Governance
Board of Directors: Based on international good practice, the board of directors will
include nine members, including two representatives from the public sector, one to two
donors and five to six representatives from the private sector. The directors from the
private sector ideally would be leaders with sector specific expertise. Directors would
rotate every three to four years. A number of board seats may also be made available
for private sector/industry participants that sponsor the CIC center through charitable
donations. The Board, once established, will setup an advisory body that over time may
be split into specialties based on specific technology areas.
Investment Committee: The CIC will establish an Investment Committee of private
sector investment experts to screen and approve all CIC-POC pre-seed and seed
Year 1 Year 2 Year 3 Year 4 5+
Details of the setting-up, Launch
Funding: Finalize funding sources and close on
transaction, revise budget appropriately
Admin & infrastructure: incorporate the company,
establish office, create operating policies, launch
Set up Advisory Board and Investment Committee
Hire staff
Begin select programs: tech sourcing , databases market
intelligence, identify and screen partners
Programs
Launch policy advocacy
Launch additional programs: mentor training,
entrepreneurship training, develop toolkits,
Launch investment facility: Scouting, screening, selection
Launch partnerships with labs & testing centers
Launch R&D collaboration program
Launch CIC conferences
Innovation cells
Launch satellite cells
Launch partnerships with labs, testing centers & Industry
Launch Applied R&D program
Scale-up
Expansion contingent upon funding – facilities
Monitoring and Evaluation
November 03, 2010 Page | 34
investments. This committee will include 4-5 individuals with principal investment
experience in India.
Incorporation & Ownership: The CIC will be a non-profit entity, incorporated in India,
and is likely to be incorporated either as a society or a Section 25 company. Foreign
inward remittance of funds should be possible for both entities. Charitable, scientific
and institutional tax registration is possible for both entities, which gives the organization
and donors tax benefits. Section 25 may be preferable, as these entities often have
better governance, more flexibility around funding options and greater transparency.
However, upon finalizing the investor base, the CIC‟s board of directors and
implementation partners will determine the specific legal structure for the Center. The
regulation around company incorporation in India is quite complex. It would be
inappropriate to finalize an incorporation structure without involving the investors.
Organizational Structure
In accordance with this organizational design, program budgets will be managed by
the appropriate supervisors. The Investment Officer will manage the budget for funding
activities including seed and pre-seed investments with hands-on oversight provided by
the CEO. Investment syndication, working capital facilitation and the investment
database will be handled by an Investment Analyst. Individual project managers will
be responsible for their project budgets (i.e. capacity building project managers will
handle the budgets for training programs, courses, toolkit development, advisory
November 03, 2010 Page | 35
services, etc). Case managers will oversee TA fund disbursement, packaged services
and POC grants which are all interrelated. The COO will provide checks and balances
for all spending activity, as well as manage the budgets for human resources and
operational overheads. Beyond an active role in the CICs investments, the CEO also will
be tasked with fund-raising activities. Scouting, sourcing and due-diligence of potential
deal-flow will be conducted with strong support from innovation cell partnership
development staff and center affiliates
Over and above the operational oversights, the CIC‟s ownership will be managed by its
Board of Directors which will represent the interests of its key stakeholders through Board
level representation. Rules for Board level representation will be constructed in co-
ordination with major funders and key partners, such as the GoI, but, as discussed, will
balance expertise and ownership. In addition, the CIC can consider the establishment
of a Trust for housing any money donated for CIC operations. The Trust can help
protect the interests of donors by allowing them to appoint trustees who release funds
to the Board on annual basis and on the meeting of pre-determined milestones.
Staffing requirements
The illustration below outlines the staff requirement in Year 0-1 and in Years 1-4.
Case Manager Oversee individual companies, making linkages
between partners, packaging services (1.50) (3.00)
Investment Officer Oversee financial products of center, vet and conduct
due diligence on investments (0.50) (1.00)
Investment Analyst Support functions of financial products of center (0.75) (1.00)
Project Manager Overseeing capacity building and other projects (0.25) (2.00)
Partnership Dev‟t
Manager
Makes linkages with strategic national and international
partners, accredits service providers (1.50) (4.00)
Technology
Analyst
Support functions relating to technology databases and
sourcing services (0.50) (1.00)
Fellows Experts / thought leaders affiliated / on assignment with
center (1.00) (1.00)
Chief Executive
Officer
Leader, reports to board, oversees investment & case
mgrs, oversees budget / fundraising (1.00) (1.00)
Chief Operating
Officer
Oversees operational aspects of center: projects in
capacity building, IT systems, events, courses (0.00)
(1.00)
Marketing /
Comm. Officer
Coordinate branding, marketing, communications and
outreach for center (1.00) (1.00)
Support Staff Includes administrative staff, HR, IT (1.00) (2.00)
TOTAL: (9.00) (18.00)
Role Description Year 0-1 Per Year (1-4)
November 03, 2010 Page | 36
7.0 Financial Plan
7.1 Budget Year 1-4
The included graphics illustrate the budget allocation for the CIC‟s first four years of
operations which totals USD 16 million and includes the implementation, launch and
scale-up of the CIC over the first four years. The first year primarily will be dedicated to
establishing the CIC infrastructure and will require a budget of USD 1.48 million. The
subsequent years will require a budget of USD 4.0-5.7 million in Years 2-4 to support the
CIC‟s investment and capacity building programs. For more details on the financial
plan, see Annex 10.
7.2 Second round funding: Years 5+
The CIC‟s second round of funding will depend on two critical factors: (i) institutional
performance and impact in Years 1-4, and (ii) availability of climate finance to fund the
center in the longer term. Assuming that the CIC meets or exceeds performance
expectations, infoDev is projecting two scenarios for capital requirement. In a business-
as-usual scenario, the CIC India will raise USD 11 million in Years 5-10 to cover its per year
operating and investment budget. In a scenario in which international climate
financing scales up significantly, the CIC India could raise up to USD 150 million over the
5 year period to fund the center at approximately USD 30m per year. While these
projections are based on valid cost assumptions, it is assumed that as a center for
innovation, the CIC will need to be flexible to evolve along with the market.
Realistically, the CIC will go through a rigorous reassessment in Years 3-4 to refine the
strategy and understand the funding requirement.
Projected Budget 5 to 10 years: Business as usual
The projected 5 year+ budget assumes that the CIC will successfully achieve all
objectives and outcomes over a four year period and adopt a per year operating cost
$0
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
Y 1 Y 2 Y 3 Y 4
CIC Budet: Years 1-4
Implementation
Facilities
Investments
Programs
Staff
$4.55M
$4.22M
$1.48M
$5.71M
Staff
15%
Program
s
20%
Investme
nts
55%
Facilities
2%
Impleme
ntation
8%
Percentage Allocation to 4
Year Budget
November 03, 2010 Page | 37
12%
18%
68%
2%
Budget breakdown per year after year 4
Staff
Programs
Investments
Facilities
equivalent to its fourth year budget (USD 5.7m). This budget will be offset by revenue
derived from investment exits and other revenue flows as decided by the management
team. Net operating costs for the center are calculated as follows:
Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Total
Operating costs $5.71M $5.71M $5.71M $5.71M $5.71M $5.71M $21.49M
Revenue
(investing only) 0 0 ($1.66M) ($1.8M) ($3.46M) ($3.55M) ($10.46M)
Net operating
costs $5.71M $5.71M $4.05M $3.91M $2.25 $2.16 $11.03
This will require the CIC
management team to raise
additional funds in year four,
totaling approximately USD
11 million for the entire
operations for year 5 to 10.
This will produce the
following impact over the full
ten-year period:
Enterprises
created
Jobs
generated
Cost per
job
Center
Sustainability
Collaborative
R&D projects
Impact 105 36,000 USD 900 69% 10
Projected Budget 5 to10 years: Eligibility for international climate finance
It is envisioned that future CICs could become eligible for international climate finance
under the technology mechanism of the UNFCCC climate change negotiations. If
eligible, such funding would contribute to the significant scale-up of the CIC‟s
operations after the fourth year including increasing staffing, program budgets,
investment and applied R&D funding. At this scale, the CIC would cost approximately
$30m per year and generate revenues of $15-20m per year (at an expected cost
recovery of 50-70%) from years 5 to 10.
Pending such funding, the center would increase in both scale (size of current
programs) and scope (additional programs). Additional programs to be considered
include:
Strategic Applied R&D Funding: The CIC could scale up the pilot Applied R&D
funding program. This includes increasing both the number and the amount of
the grants for international collaborative research projects that solve highly
Years 5-10
Impact at year 10
November 03, 2010 Page | 38
specific technical barriers to technologies that have a wide-reaching impact on
Indians.
Demonstration Project Funding: The CIC may provide larger-scale financing than
currently offered to assist in the financing of demonstration projects and field
tests. Such activities would involve highly innovative technologies that may
require large capital intensive investments.
End-user finance: Funding in the form of risk guarantees could be used to reduce
the risk of end-users adopting new products and services. For example funding
the installation of energy efficiency technologies that are available but not
widely deployed.
Workforce Training: The Center could look to expand its current capacity
building courses to sponsor and fund larger workforce development activities in
India.
Physical Facilities: The CIC could look to build its own facilities and open the use
of such facilities to the wider community based on a „pay-per-use‟ model. Such
a facility would house a range of prototyping and manufacturing equipment,
including office and networking space.
Direct Industry Funding: The Center could look to expand its current proof of
concept program and deliver commercialization grants at a larger scale to
industry and MNCs.
7.3 Sustainability
The CIC will work for partial self sustainability, largely through its investment activities,
which are anticipated to cover 69% of operating costs from year 10 onwards, and by
introducing other revenue streams, once a strong value proposition has been achieved
in the early years. The detailed assumptions driving this revenue are shared in Annex 12.
It takes time to realize investments in early stage companies and it will take from 6 to 8
years to achieve exits and, therefore, revenues. Growing from USD 1.66 million in Year 7,
the anticipated investment returns will reach to a steady state of USD 3.93 million in
Years 11 onwards.
Financial Projections
Years 1-6 7 8 9 10 11 Total
Total
Investment
Return (USD)
0 1,660,114 1,799,314 3,458,141 1,124,571 1,512,857 9,554,996
November 03, 2010 Page | 39
The revenue model strategy has two distinct benefits for the CIC and the ventures that
it assists.
1. The ambitions of both are aligned, sharing the common objective of building a
significant business. Actions that benefit the venture also maximize return to the
CIC.
2. Importantly, the success-sharing model builds a sustainable future for the CIC,
using a model that is scalable and replicable. Returns from successful
investments can be used for incentives to management, mentors and innovation
cells providing crucial support.
7.4 Co-investment and leverage
Co-investment will be sought from affiliated financiers, some of whom will be on the
investment panel. At this stage, only modest co-investment is anticipated in terms of
30% of the seed fund portfolio attracting 1-to-1 co-investment. As the value proposition
of the CIC grows, this figure will increase over time. At the moment, investors do not
have the appetite to invest as early as the CIC would. Again this should be revisited in
years 3 and 4, by when there may be more interest based on the CIC‟s track record. It
is estimated that in addition to leverage from direct investments, the center would seek
to leverage 100% or $16m of the cost of the Center from other cash contributions, in-
kind donations and discounts such as free office space, access to facilities, equipment
and other services.
Other revenue potential:
infoDev has investigated other potential revenue sources based on experiences across
its global incubator network, which may be developed over time. These revenue
streams will be evaluated and developed in years 3 and 4, once a strong value
proposition has been achieved. It is projected that via the below revenue mechanisms,
the CIC can aim to cover a portion, if not all, of the remaining 39% of the budget at
year 10, potentially making the center wholly self-sustainable. It is assumed that
$0
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
Year 1 Year 4 Year 7 Year 10
Revenue Model: Almost 70% self-sustaining after 10 years
Total CIC Annual
Budget
CIC Annual
Investment Budget
Annual Investment
Return
November 03, 2010 Page | 40
management would periodically revisit the business model of the center to identify
sources of funding where appropriate. Such sources of revenue could include:
Financial advisory services: By brokering finance as a service in its own right, the
CIC can generate revenue as a percentage of the finance secured, which may
be taken in cash or re-invested in the investee business. There is a clear market
gap here for the ecosystem, but this will not be revenue-generating for the CIC
at this time, because the target companies can‟t afford the services and there is
a conflict of interest for financial advisory services for any CIC portfolio
companies. The revenue potential here should be revisited in the future.
Sponsorship: The CIC will recruit corporate sponsors that will attract private sector
participation. Industry / private sector will benefit from this affiliation by gaining
access to SME activity, tech innovation, market research, etc.
Tailored Training: In later years, the CIC may be able to monetize its market and
technical knowledge. The Capacity Building team will develop training models
that can be provided to industry at a fixed fee. This option will be explored in
years 3-4.
Brokered R&D: Brokering R&D to address industry needs might be a source of
revenue, if a small percentage of the value of the brokered R&D is taken as a
royalty. However, large corporations in India already do this themselves and the
market is unclear, so no revenue has been included in the early years, although
this should be re-assessed in years 3 and 4.
IP licensing and royalties: The CIC will pilot 3 collaborative research grants over
the first four years, ideally resulting in intellectual property that can be leveraged
for a fee.
7.5 Funding/Fundraising plan
For the CIC‟s operations in Years 1-4, an investment of USD 16 million is required. In
order to provide the best opportunity for success, it is important to secure commitments
for 100% of the required capital in advance of launching the CIC. This is to ensure that
the CIC remains adequately resourced throughout its maturation period. .
Investment in the Indian CIC presents a clear value proposition to prospective investors:
Pipeline: CIC investors will be exposed to an on-going stream of climate
technology ventures that will be screened through the finance and capacity
building activities of the CIC. While the CIC will use its own criteria to select SMEs,
the CIC investors will have the opportunity to learn from and potentially
collaborate with any enterprises that have contact with the CIC.
November 03, 2010 Page | 41
Knowledge: CIC investors gain considerable knowledge from their association
with the Center. In addition to the CIC published research and market analysis,
CIC investors will have access to in-depth R&D and technical activities, as well as
cutting-edge information on India‟s climate tech sectors.
Partners: CIC investors gain access to the complete network of the CIC partners
and stakeholders from R&D facilities and universities, as well as from industry and
government. These relationships will be particularly valuable to any investor with
programs related to climate change, clean technology, national resources, and
sustainable development.
Measured outcomes and impact: CIC investors benefit from clear visibility to the
outcomes of the Center‟s activities. In addition to providing investors with regular
performance reports, the CIC will provide synthesized data and evidence on
economic and social returns to the investors‟ contributions.
Influence: In addition to directly measureable impact, CIC investors will be
responsible for facilitating real transformations in India‟s climate technology
sectors. It is expected that this will be in alignment with the investors‟ core
mission. These are the types of broader ecosystem impacts that only a well-
funded, holistic institution like the CIC can provide.
Stakeholder “In-Kind” Support
Various government and private stakeholders have showed strong demand and
support for the CIC. When established, stakeholders have offered their support for the
center in various forms - either financially or in-kind. The complete table in Annex 11
summarizes these potential offers from some of the key stakeholders. A summary table is
included below.
Direct funding support could be provided by Indian government agencies such as BEE,
MNRE, DST-NSTEDB and SIDBI, as well as international development agencies, such as
UK-DFID.
Co-investment in CIC ventures has been offered by several stakeholders. MNRE‟s clean
energy fund through CIIE, SIDBI, India Angel Network and I2India are a few of these
potential stakeholders. I2India could also offer its technical expertise from its experience
of operations in India.
The private sector will be crucial partners in the formation and functioning of the CIC.
Some large corporations, such as Tata Power, GE, Moser Baer, and IBM have offered in-
kind support such as use of facilities, support for technology demonstration, and
November 03, 2010 Page | 42
assistance in distribution. Similarly, venture capital firms have expressed interest in co-
investing on a case-by-case basis.
Academic and research institutes have been equally enthusiastic and supportive of the
CIC. These institutions are willing to provide technical support, as well as in-kind support
such as hosting the center and allowing the use of research labs and facilities. Support
has been offered by IISc, IIT Kanpur, IIM Ahmedabad and IIT Mumbai. Research
institutes like TERI, CSIR, ICAR, and ICRISAT are ready to assist with their technical
expertise as well.
International organizations such as IRG/USAID‟s ECO-III group have created centers of
excellence in energy efficiency and would provide support from these centers. And
lastly, WRI‟s New Venture organization in India, NVI, will work hand-in-hand to not only
facilitate investments but also build capacity through training and mentor networks.
Partner Technical
assistance
Co-Investor in
funds
Sponsorship Direct funding Other in-kind
Number of
Stakeholders
offering
support
18 institutions 6 institutions 5 institutions 6 institutions 14 institutions
Type of
Stakeholders
GoI, industry,
R&D /
incubators
GoI, investors industry GoI, investors GoI, industry,
incubators,
research centers
7.6 Implementation oversight and governance
Based on infoDev‟s track record and experience in implementing such projects in over
50 developing countries, the implementation of the CIC would be managed by the
trustee of the funds. This oversight is critically important to ensure that fiduciary
responsibilities are maintained, timelines and project plans are followed, management
and oversight are established and that the required expertise and global best practices
are available at all times. Implementation partners would ideally be sort via a RFP
process and include at least one local partner.
Hosting of CIC
infoDev does not advocate the hosting of the Indian CIC in one institution over another.
However, based on infoDev‟s international experience in project implementation of PPP
initiatives, it is recommended that the institution be governed at arm‟s length from the
government and have a majority of board participation from the private sector (as
discussed in the governance section of this report). Nevertheless, government will play
a crucial role in the center‟s success, and throughout implementation all relevant
ministries will be consulted and informed of progress.
Offers of support
November 03, 2010 Page | 43
Other implementation issues to consider:
Outstanding governance questions including board membership, management
structures and ownership of the CIC which will be addressed in detail when
founding members are identified.
Investment governance and structuring including design of financial
mechanisms, oversight, staffing and partnerships with existing financial
institutions.
Staffing review including reassessment of in-house versus outsourced staffing
requirements for each business line.
Technology priorities including understanding which sectors have the greatest
demand for the CICs services and how the Center‟s technology specializations
and expertise will evolve over the first four years of operations.
Intellectual property rights including addressing ownership issues amongst the
Center, affiliates, partners and investees.
Performance metrics including the priority impacts and objectives the CIC will
measure over the first 4 years.
Exit Strategy:
While donor money will be necessary to seed the CIC over the first phase, it is expected
that the CEO and management team will seek contributions (both cash and in-kind)
from local stakeholders for operations after year five. The aim for donor funding is to act
as a catalyst to establish the CIC as a proof point, generate successes and
demonstrate that it is a valuable program for both the Indian government and private
sector to fund in the long term. This way, donors will exit as major funders of the CIC
after the first five years, with the private sector and local public sector supporting
operations thereafter.
November 03, 2010 Page | 44
8.0 Outcomes and Impact
8.1 Technology impacts
The CIC aims to accelerate the growth of innovative climate technologies in India and
its main social, economic and environmental impacts will result from the technologies
that the Center supports. The table below highlights the indicative impacts and
outcomes of the potential products and services developed by the CIC. A base case
assumes a low level of innovation and signifies impact if technologies were rolled out as
of today‟s standards/prices/complexity. Higher levels of innovation (and best case
scenarios) assume a more radical level of innovation and, as a consequence, higher
impact levels. The center will aim to support innovations across this spectrum of risk and
sophistication depending on the market opportunity and deal flow.
Technology Impacts:
Outcomes after 10 years based on 4 years of CIC investment and operations21
Level of Innovation
(multiplier)
1-3 (1X)
worst case
4-6 (2X)
base case
7-10 (3X)
best case Assumptions
Access to energy
kWh produced 345,000,000 690,000,000 1,035,000,000 Based on $0.2 per kWh
MW installed 31 62 94 Based on $4.4m per installed
MW
Access # of people 315,000 630,000 945,000 Based on 5240 kWh
household consumption
Access # of households 63,000 126,000 189,000 Based on 5 people per
household
Access to water
Increased access to
clean water in KL 311,250,000 622,500,000 933,750,000 Based on $0.11 per KL
Access # people 518,250 1,036,500 1,554,750 Based on 25 KL consumption
per household per month for
10 years
Access # of households 103,500 207,000 310,500 Based on 5 people per
household
Decreased # of deaths
from diarrhea 300 600 900
Based on % increase access
and 700k incidence deaths
from diarrhea per year
Access to food
Number of households
with access to cheaper/
better quality food 144,000 288,000 432,000
Based on % food
expenditure per household
Reduction in agricultural
water through waste to
energy innovations 360,000 720,000 1,080,000
Based on price of
agricultural waste per ton
21 Technology impacts have been calculated by aggregating the 10 year projected revenues of CIC ventures that have
received financing over the center‟s first four years of operations. These cumulative revenues have been divided into 3
sectors. This model assumes that 50% of the products/services sold by CIC ventures are energy related, 25% water and
25% agriculture. CO2 mitigated has been calculated based on energy access figures including an additional %
attributed to mitigation benefits from clean water and food access. Levels of innovation have been used to multiply the
impact of the technologies on the communities based on the three scenarios of the sophistication of the
products/services produced by the CIC.
Indicative Impact & Outcomes
November 03, 2010 Page | 45
Improve agricultural
efficiency in small farms 18,750 37,500 56,250
Based on % of households
that are small holder farmers
Mitigation potential
CO2 mitigated (tons) 718,250 1,436,500 2,154,750
Based on coal CO2
emissions at 1.47 kg/kWh
Comparative carbon
price (USD) 22 11 7
Compare to market rate
of approx. USD 17 per ton
8.2 CIC performance Indicators:
The graphic below presents a snap shot of the performance outputs to be achieved by
each program over the CICs first four years of operation.
Output 1.1: Financing and SME Development
Create a value chain of risk investment instruments to bridge 'valley of death' funding gaps and syndicate existing
sources of finance to create a pipeline of investible and scalable enterprises that deliver climate mitigating and
adapting solutions both locally and internationally
Proof of concept grants
delivered 40
Increased innovative activity in universities and
communities
Better commercialization rates of domestic
R&D
Data from CIC
Annual Report
Pre-seed investments
made 25
Increased jobs and economic output in
surrounding communities including access to
innovative products and services
Data from CIC
Annual Report
Seed investments made 7
Total financing disbursed $8,780,000
Survival rate of enterprises 75% at pre-seed
85% at seed
Number of enterprises
created 45
Leverage amount
achieved
up to 100% on
30% of portfolio
Increased presence of early-stage investors in
market
Data from CIC
Annual Report
Other potential leverage
sources
In-kind: Up to
$3m
Sponsorship: Up
to $3m Private
sector: $7m
Total leverage:
USD16m or 100%
Crowd in other sources of investment and
ensure local ownership
Data from CIC
Annual Report
Financial service provider
partnerships built 35+
Creation of new investor networks - increased
investment opportunities
Annual investor
focus groups and
interviews
Additional funding sources
identified 175+
Increased access to funding opportunities and
success rates of entrepreneurs Database statistics
Output 1.2: Capacity building and human capital
Enhance local capacity to innovate in the climate technology space through programs that provide access to critical
know-how and expertise and build new workforce capacity and entrepreneurial culture where needed.
Training programs
delivered
42 workshops
500+ mentors
trained
50 mentors
accredited
1,800 businesses
trained
Increased skills, knowledge and know-how
available in the market to help support and
promote the scale-up of innovative enterprises
Training program
surveys
Courses attended 36 courses
900 participants
Increased workforce capacity and
entrepreneurial culture to build and develop
new industries
Course surveys
Indicator (Direct) Target Spill-over effects Verification
November 03, 2010 Page | 46
Toolkit accessed by 500 users per
week
Increased knowledge of climate tech
company formation outside main cities Toolkit statistics
National event attended
by
100-200 national
and 50
international
guests
Raised profile of climate activities in-country
and promotion of local innovations to export
markets
Event survey and
data collection
Specialized services
delivered to 72
Increased aggregation of specialized service
providers operating in climate space
Data from CIC
Annual Report
Number of service
providers accredited 50+
Increased number and quality of existing
service providers in community
Focus groups and
interviews of
mentors
Output 1.3: Ecosystem including enabling environment and policy reform
Facilitate the development of an innovation ecosystem through forging relationships and partnerships between key
ecosystem members and supporting the innovation process through supply side (technology) interventions and
demand side (market and policy) initiatives.
Technologies sourced
internationally (North-
South)
18 Increased efficiency in conducting
international technology transfer
Data from CIC
Annual Report
Technologies sourced
internationally (South-
South)
7
Increased efficiency and experience in
conducting south-south international
technology transfer
Data from CIC
Annual Report
Technology database
accessed by
500 users per
month
Increase entrepreneurial opportunity and
awareness of technologies in climate space Database statistics
Number of R&D
partnerships facilitated 10
Decrease in domestic and international R&D
fragmentation
Data from CIC
Annual Report
Number of R&D proposals
received 30
Increased supply of quality, high-impact
applied R&D
Data from CIC
Annual Report
Breakthrough patents
produced from R&D pilots 3
Potential to dramatically increase the quality
of life for BOP through access to radically
innovative new technologies
Vetting of R&D
applications
Number of international
CIC partnerships
developed
5
Increased formation of R&D and B2B linkages
globally, transfer of knowledge, know-how and
experience
Data from CIC
Annual Report
Number of analytical
reports produced per year
12 Market
summaries
4 Trend reports
1 Annual market
report
More active market due to increased
information including new products launched,
companies created, industrial activity and
trade sales
Customer
satisfaction surveys
Market info database 1000 users per
month
Increase market and product intelligence,
facilitating commercial activity Database statistics
Number of MOUs signed
with cell partners 50+
Increased number of ecosystem members and
decreased fragmentation of existing members
Feedback and
interviews with cell
partners
CIC Internet visitors per
month 50000
Increased awareness and knowledge of CICs
products and services
Internet usage
statistics
Policies reformed 3 Creation of new markets and acceleration of
scale-up of new technologies Government data
Output 1.4 Jobs and social dimensions
To create and maintain the growth of high quality sustainable jobs, the increasing of disposable income and enhance
the livelihood of BOP, especially marginalized demographics including women and youth.
Center FTE (full time
equivalent) Jobs created 18 Creation of high quality & professional jobs
Data from CIC
Annual Report
Direct jobs 971 Creation of higher paying sustainable jobs
which increase economic output of
surrounding communities
Data from CIC
Annual Report Indirect jobs 388422
22 Spill-over jobs are calculated at 4 times direct jobs. This an average that has been benchmarked from various sources
of data on indirect jobs created in high-tech sectors.
November 03, 2010 Page | 47
Total jobs 4873
Youth jobs created 1218 Increased participation of women and youth
in higher paying and better quality/condition
jobs
Data from CIC
Annual Report
Women jobs created 1116 Data from CIC
Annual Report
Short-term cost per job $3,283 Creation of new jobs at an increasingly lower
cost versus other forms of public spending
Data from CIC
Annual Report
8.3 Monitoring and Evaluation
The CIC will have both direct and indirect social/environmental impacts, as described
in the impacts and outcomes section of the report.
The CIC will have an annual budget from year 1 to build rigorous monitoring and
evaluation structures which will track both the direct and spill-over effects that the
Center‟s programs and services are having on beneficiaries and surrounding
communities. This will be achieved through:
Internal databases and data collection
Yearly annual report
Focus groups and stakeholder follow-up
Surveys and other quantitative measurements where possible.
Third party M&E assessments
Other M&E performance metrics can be found in Annex 14.
November 03, 2010 Page | 48
9.0 Risks Along with expected successes, it is clear that a broad range of risks are associated
with a new and innovative approach such as a CIC, both in terms of the Center‟s
implementation and the external operating environment. These risks offer differing
degrees of complexity and require various mitigation strategies. The stakeholder
outreach conducted provides an indication of the major risks that will be encountered
and potential management strategies. However, a key role of the Center‟s board and
management team will be to examine, evaluate and manage risks over time. Included
below is an overview of the key risks identified:
Risk Description Potential Mitigation
Finance Securing initial finance for center
implementation.
Securing post year 5 finance.
Accepting/ dispersing finance in
an efficient and transparent
manner.
Budget outlined in business plan
is insufficient to execute current
model.
Ongoing discussions with numerous donors,
government & investors.
Financial sustainability as an explicit aim of
the Center post year 5 with a clear focus on
revenue generation.
Clear governance structure and strong
implementation partners.
Close monitoring by trustee of financing
decisions including flexibility in reallocating
program budgets and assistance in further
fundraising.
Stakeholder support Continued support and buy in
from government, industry and
partner institutions.
Partnership managers to maintain and
develop relationships, board seats for key
stakeholders.
Management team and
staff
Identification and recruitment of
appropriately skilled board
members, management
professionals and staff.
High profile initiative with remuneration in
line with market.
Market Demand Demand for center services.
Reputation/Brand of center.
Center continually adapts to market gaps
and reallocates budgets as necessary
Emphasis on customer feedback, quality
control and M&E.
Risk Description Potential Mitigation Finance Ability to leverage market investors. Include investors on board and investment
committees.
Continue to engage financial stakeholders.
Market Supply Ecosystem of investable companies. Services respond to market gaps and
affiliates should aid the identification of
potential investments. Ability to offer
financing in a market where it is lacking
should be a major draw to the Center.
Market Demand Demand for services provided by
companies in center.
Investment decisions will be based on clear
demonstration of market demand and
adapt as necessary.
Improving
regulatory/ policy
environment
Business environment.
Climate policy/ regulation focus.
The center aims to play an active role in
providing evidence and advocating the
development of climate technology
conducive regulations and policies.
Competition from
other innovation
centers/initiatives
Overlap with other initiatives
Change of focus of donor/ government
spending.
Additional innovation centers.
Close coordination with existing initiatives
and focus on center visibility.
Demonstrable support from stakeholders
and local government.
Center Implementation Risks
Market Risks
November 03, 2010 Page | 49
10.0 Conclusion India represents an extensive market, fast growth rates, increasingly progressive policies
on sustainability and a pipeline of innovative companies. However there are clear
gaps in institutional support and financing for scaling up the potential for a robust
climate innovation ecosystem.
The establishment of the Climate Innovation Center model in India will serve to plug
these critical gaps and accelerate the development, deployment and transfer of
climate innovation. The services and programmatic offerings of the center include;
Finance, Capacity Building, Ecosystem Development and the creation of a Network of
Innovation Cells. Coordination among existing local and global market players is a key
success factor and will be one of the main objectives of the CIC.
The projected cost to implement, launch and operate a CIC as designed by Indian
stakeholders is USD 16 million over a four year period of which approximately two-thirds
are investment products and the rest, programmatic and staffing. Initially, public funds
are required for the Center; however the CIC aims to be between 70-100% financially
sustainable after 10 years.
The stakeholder engagement process has already built a strong coalition of partners
and identified a pipeline of potential investees that will allow the CIC to hit the ground
running and produce tangible impacts over the first four years. Pending the success
and outcomes of the CIC’s programs, the direction, scope and scale of the Center
(and business plan) will evolve with guidance from a strong management team and
board.
The timing is right to capture the momentum that stakeholders have expressed towards
establishing the CIC in India. Such a leading and world-class institution can catalyze
transformation in India‟s climate technology space and help develop new industries,
create jobs and produce products and services that equip the country and its people
to respond to the challenges of climate change.
November 03, 2010 Page | 50
ADB Asian Development Bank
AEEE Alliance for an Energy Efficient Economy
ATREE Ashoka Trust for Research in Ecology and the Environment
BEE Bureau of Energy Efficiency (Ministry of Power, Government of India)
BEL Bharat Electronics Limited
BHEL Bharat Heavy Electricals Limited
BITS Birla Institute of Technology & Science
BTI Biotechnology Incubator
CDM Clean Development Mechanism
CEL Central Electronics Limited
CEPT Center for Environmental Planning and Technology
CIC Climate Innovation Center
CIETEC Centro de Inovacao, Empreendedorismo e Tecnologia
CIIE Centre for Innovation, Incubation & Entrepreneurship (IIM Ahemdabad)
CNG Compressed Natural Gas
CPCB Central Pollution Control Board
CSIR Council of Scientific & Industrial Research
C-STEP Center for Study of Science, Technology and Policy (private, non-profit)
CWET Centre for Wind Energy Technology
DBT Department of Biotechnology
DCE Delhi College of Engineering
DFID Department for International Development, UK
DFJ Draper Fisher Jurvetson
DST Department of Science & Technology (Government of India)
E&Y Ernst & Young
ERG-III Energy Conservation & Commercial Program
ESCO Energy Service Company
FITT Foundation for Innovation & Technology Transfer (IIT Delhi)
FTE Full Time Equivalent
GDP Gross Domestic Product
GEF Global Environment Fund (PE firm)
GOI Government of India
IAN Indian Angel Network
ICRISAT International Crops Research Institute for the Semi-Arid Tropics
IFC International Finance Corporation (World Bank)
IIM Indian Institute of Management
IISc Indian Institute of Science
IIT Indian Institute of Technology
IREDA Indian Renewable Energy Development Agency (Public Sector Unit under Ministry of New &
Renewable Energy)
IRG International Resources Group
ISRO Indian Space Research Organization
IV Intellectual Ventures
KPCB Kleiner Perkins Caufield & Byers
Abbreviations
November 03, 2010 Page | 51
MNRE Ministry of New & Renewable Energy (Government of India)
MOA Ministry of Agriculture (Government of India)
MoEF Ministry of Environment and Forests (Government of India)
MOT Ministry of Tourism (Government of India)
MSME Ministry of Micro, Small & Medium Enterprises (Government of India)
NABARD National Bank for Agriculture and Rural Development
NAL National Aerospace Laboratories
NASSCOM National Association of Software and Servicing Companies (India)
NEA-IUV NEA-Indo US Ventures
NEN National Entrepreneurship Network
NIT National Institute of Technology
NRAI National River Authority of India
NRDC National Research Development Corporation (Department of Scientific and Industrial Research,
Ministry of Science & Technology, Government of India)
NSRCEL N S Raghavan Centre for Entrepreneurial Learning (IIM Bangalore)
NSTEDB National Science & Technology Entrepreneurship Development Board (Department of Science &
Technology, Government of India)
NVI New Ventures India
ONGC Oil and Natural Gas Corporation Limited
POC Proof of Concept
PSU Public Sector Unit
PwC Price Waterhouse Coopers
R&D Research & Development
REEEP Renewable Energy and Energy Efficiency Partnership
SEC-MNRE Solar Energy Center – Ministry of New & Renewable Energy
SEWA Self-employed Women's Association
SIDBI Small Industries Development Bank of India
SINE Society for Innovation and Entrepreneurship (IIT Bombay)
SME Small & Medium Enterprise
SPRERI Sardar Patel Renewable Energy Research Institute
SSS-NIRE Sardar Swaran Singh National Institute Renewable Energy
STEP Science & Technology Entrepreneurs‟ Park (IIT Kharagpur)
TERI The Energy and Resources Institute
TiE The Indus Entrepreneurs
TIFAC Technology Information, Forecasting and Assessment Council (DST)
TIFR Tata Institute of Fundamental Research (Mumbai)
TREC - STEP Tiruchirappalli Regional Engineering College – Science & Technology Entrepreneurs‟ Park
UNDP United Nations Development Programme
UNEP United Nations Environment Programme
UNIDO United Nations Industrial Development Organization
USAID United States Agency for International Development
VTU Visvesvaraya Technological University
WISE World Institute of Sustainable Energy