Climate Change – Investment

Opportunities in India
November 2019
EverSource Capital – Enabled by a Unique Partnership

Leading player in Indian private equity Leading global renewables strategic

• 70+ private equity deals in India
• A pioneer in platform investment strategies
• Real asset experience with Indian context
• Indian land acquisition expertise including over 40
million sqft of logistics parks
• Strong network across India including with government,
corporates and promoters
• 290 utility scale solar projects built
• One of largest global O&M platforms
• Leader in financial innovation
• Leadership team’s broad sector experience
• BP plc role: 20 years in the renewable business, USD
8 billion investments to date in India, USD 400 mn VC
investments globally and one of world’s largest
energy traders

Sustainable advantage and higher risk-adjusted returns with integrated sustainability agenda
• USD700 mn target private fund with a cornerstone investment of USD 340 mn
• Track record of more than 100 deals, and an average exit of 2.0x MoI on over USD2.8 billion invested
• Sector focus on broad theme of decarbonisation of energy in India
• Target equity cheque of between USD 50 - 200 mn or more with a 3-7 year hold strategy
• Risk capital for greenfield and brownfield build outs

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Global Megatrends
The energy ecosystem is transforming, changing how we generate, distribute and consume
energy

Cleaner, Intermittent and Distributed Energy

Digitisation and Smart Grid

Electrification

Consumer Choice and Control

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Globally, the energy mix is shifting significantly towards Renewable
Energy, and for the first time since the industrial revolution, away
from Coal
Share of Global Electricity Generation by Fuel

Source: BP Energy Outlook, 2018

4
Power demand and capacity growth is an Emerging Markets story
that will continue through 2050
Cumulative Electricity Generation (TWh)
30,000
OECD Non-OECD
25,000

20,000
5.8% 13,716
15,000
5,219
10,000
0.7%

5,000 9,853 11,013

-
2000 2017

Source: (1) BP Statistical Review 2018

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With Electric Vehicle penetration, Indian market materiality and
Autonomous Technologies becoming the key global themes
Electric car penetration is With energy demand growth …and autonomous technologies
accelerating beyond forecasts being greatest in Indian market dramatically change behaviors
Millions of Cars Growth in MToe New mobility share of total vehicle km

Source: (1) BP Statistical Review 2018

EO 17 : BP Energy Outlook 2017 6
EO 18 : BP Energy Outlook 2018
Winners will be companies able to integrate different forms of
Smart Solutions

Smart Solutions
Low cost & easy to use
for Consumers

Smart Energy More flexible and less

Supply Models capital intensive ecosystem

Smart Financing
$ Structures
Optimised cost of capital

Smart Regulatory
Policies

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 Urgency for Climate Action in India
World Bank estimates Climate Change to impact Indian GDP per capita by ~10% by 2050

At the current rate,

avg temp could rise
Most vulnerable are to 29.1°C by 2100
the agrarian (from 25.1°C
districts in central currently)
India with limited
access to irrigation Extreme temp and
droughts shrink
farmers income by
Loss of 34 mn full- ~4-14% for key
time jobs by 2030 crops
(up from 15 mn in
1995) owing to heat According to Global
stress Climate Risk Index,
India is the 14th
most climate
affected country

IMD : Indian Meteorological Department

Source : World Bank Research, Mint (July 2019) 8
India’s Key Climate Abatement Targets Are A Key Pillar of
Government Strategy
India’s long term target is to have per capital emissions never exceed those of the developed
countries
A Paris Agreement Nationally
33% - 35% below 2005 emissions intensity of GDP by 2030 Determined
Non-fossil share of cumulative power generation capacity 40% by 2030 Contributions (NDCs)
Significant potential to achieve the 1.5˚C compatible target if India meets
190 countries
its NDC goal of 40% non-fossil-based power capacity by 2030
representing 95
percent of global
Key Targets

B emissions— submitted
Copenhagen Accord
NDCs in April 2016
20% to 25% below 2005 emissions intensity of GDP by 2020
After adopting its National Electricity Plan (NEP) in 2018, India
remains on track to overachieve its 2˚C compatible target

C India’s NDCs

Reduce the GHG emissions intensity of GDP by 33–35% of 2005 levels by 2030
Build 40% of fossil-free power generation capacity by 2030
Create additional carbon sink of 2.5 - 3 bn tonnes of CO2e by 2030
Source : Climate Tracker, IFC Research
GHG : Green House Gas 9
Developing Ecosystem for Climate Investing In India
Strong market forces enabling transition to low carbon resilient growth in India conducive to
private capital intervention
Indian Corporates Addressing Climate Change
• Developing innovative business models for sustainable growth and resilience of operations
• Incorporating environmental considerations in decision making
• Value creation through climate friendly market positioning

Strong Governance and Alignment of Political Intent

• Clear climate goals and strong regulatory framework to promote competition and innovation
• Encouraging demonstration of new business models through PPP contracts to assure
replication, capacity building and skill development

Risk Adjusted Returns in Nascent Sectors

• Bankable contracts through PPP models to attract best-in-class cost of capital
• Strong pipeline of projects to drive scale in these sectors

Technology Leadership
• Initiatives like Start-up India, National Strategy for AI and structural reforms in tax and IP
• High degree of localisation required in evolving sectors through govt. incentive mechanisms

PPP : Public Private Partnership

Climate Investment Segments in India
Potential to invest USD 3+ trillion in climate smart investments in India from 2018-30

Green Buildings and

Renewable Energy Energy Efficiency
USD 448 billion USD 1.4 trillion

Climate e-Mobility and

Waste Management
Investment Transport
USD 11 billion
Potential in India Infrastructure
USD 917 billion

Urban Water Agriculture

USD 128 billion USD 194 billion

Source : Climate Investment Opportunities in South Asia, IFC (2018)

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