Bureau of Energy Efficiency

Ministry of Power, Government of India

National Mission for Enhanced Energy Efficiency

Expression of Interest

for

Hiring of an Agency for developing new financing mechanisms for Energy

Efficiency

25/01/2018

Bureau of Energy Efficiency

4th Floor, Sewa Bhavan,

R.K. Puram,Sector-1, New Delhi -110066,

India

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Table of contents:

1. EXPRESSION OF INTEREST ............................................................................................... 2

1.1 Advertisement ............................................................................................................................. 2

1.2 Critical Information .................................................................................................................... 3

2. BACKGROUND INFORMATION ........................................................................................ 5

2.1 About BEE .................................................................................................................................. 5

2.2 National Action Plan on Climate Change (NAPCC).................................................................. 6

2.3 The National Mission for Enhanced Energy Effieicncy (NMEEE) ........................................... 6

2.3.1 Energy Efficiency Financing Platform (EEFP) ....................................................................... 8

2.3.2 Framework for Energy Efficient Economic Development (FEEED) ..................................... 9

2.4 Need for Energy efficiency Financing in India ....................................................................... 10

2.5 Scope of Work: ........................................................................................................................ 11

3. DURATION OF CONTRACT .............................................................................................. 14

4. SELECTION PROCESS ......................................................................................................... 15

4.1 Minimum Eligibility Criteria .................................................................................................... 15

5. Preparation of proposal: .......................................................................................................... 18

5.1 Disclaimer ................................................................................................................................. 19

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1. EXPRESSION OF INTEREST

1.1 Advertisement

This Expression of Interest(EOI) document is for hiring of Consultant for developing new

financing mechanism underEnergy Efficiency Financing Platform (EEFP) which is an initiative

under the National Mission for Enhanced Energy Efficiency (NMEEE). The Government of

India set up Bureau of Energy Efficiency (BEE) (Website:www.beeindia.gov.in) on 1st March,

2002 under the provisons of the Energy Conservation Act, 2001. The mission of the Bureau of

Energy Efficiency is to assist in developing policies and strategies with a thrust on self-

regulation and market principles, within the overall framework of the Energy Conservation Act,

2001 with the primary objective of reducing energy intensity of the Indian economy.

Overcoming barriers for financing of energy efficiency is a key policy goal of BEE.

The Government has approved to provide fiscal incentive of about Rs. 1,50,000 crores to

significantly scale up Energy Efficiency implementation in various sectors of the economy.

Appropriate policy and regulatory meansures have also taken up to give way to the Government

commitment for Energy Efficiency.

Interested bidders may download the EoI document from the website www.beeindia.gov.in. The

submission of the document must be accompained with the payment of bid processing fee of Rs.

5000/- (Rupees five thousand only). The payment will be accepted in the form of crossed

demand draft drawn on any scheduled commercial bank, payable at par in New Delhi in favour

of Bureau of Energy Efficiency, New Delhi.

Last Date for Submission of Proposal: 1500 hours (IST) on 26th February 2018.

Interested bidders may contact : Ms. Vineeta Kanwal, Joint Director, BEE for any

clarification.

Tel:(+91)-11-2617-9699

Fax:(+91)-11-2617-8352

Email:vkanwal@beenet.in

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1.2 Critical Information

Availability of EOI

25th January 2018

Last date for receipt of

Queries

2nd February 2018

Pre-bid meeting 8th February 2018 (Time: 11 AM)

Venue for pre-bid meeting Conference Room, Bureau of Energy Efficiency 4th Floor, Sewa Bhavan, R.K. Puram, New Delhi -110066 India

Last date for receipt of EoI

(proposals)

26th February 2018 (Time: latest by 3 PM)

Time and Date of opening

of EoI (proposals)

26th February 2018 (Time: latest by 4 PM)

(Venue: BEE’s conference hall, 4th floor, Sewa

Bhawan, Sector – 1, R K Puram, New Delhi –

110066)

Contact Person for queries Ms. Vineeta Kanwal

Joint Director,

Bureau of Energy Efficiency

4th Floor, Sewa Bhavan,

R.K. Puram, New Delhi -110066

India

Tel:(+91)-11-2617-9699,

Fax:(+91)-11-2617-8352,

Email:vkanwal@beenet.in

Contact Person for The Secretary

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submission of Proposal Bureau of Energy Efficiency

4th Floor, Sewa Bhavan,

R.K. Puram, New Delhi -110066

India

Tel:(+91)-11-2617-9699

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2. BACKGROUND INFORMATION

2.1 About BEE

The mission of Bureau of Energy Efficiency (BEE) is to develop policy and strategies with a

thrust on self-regulation and market principles, within the overall framework of the Energy

Conservation Act (EC Act), 2001 with the primary objective of reducing energy intensity of the

Indian economy with active participation of all stakeholders.The Act empowers the Central

Government and in some instances the State Governments, in consultation with BEE, to:

Notify energy intensive industries, other establishments, and commercial buildings as designated

consumers.

Establish and prescribe energy consumption norms and standards for designated consumers

Direct designated consumers to –

1. Designate or appoint certified energy manager in charge of activities for efficient use of

energy and its conservation.

2. Get an energy audit conducted by an accredited energy auditor in the specified manner

and intervals of time.

3. Furnish information with regard to energy consumed and action taken on the

recommendation of the accredited energy auditor to the designated agency.

4. Comply with energy consumption norms and standards, and if not so, to prepare and

implement schemes for efficient use of energy and its conservation.

5. Prescribe energy conservation building codes for efficient use of energy and its

conservation in commercial buildings

6. State Governments to amend the energy conservation building codes to suit regional

and local climatic conditions

7. Direct owners or occupiers of commercial buildings to comply with the provisions of

energy conservation building codes

8. Direct mandatory display of label on notified equipment and appliances.

9. Specify energy consumption standards for notified equipment and appliance.

10. Prohibit manufacture, sale, purchase and import of notified equipment and appliances

not conforming to standards.

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2.2 National Action Plan on Climate Change (NAPCC)

Realizing the growing challenge of climate change and its likely impacts on the Indian economy,

the Government of India (GOI) released the National Action Plaan on Climate Change (NAPCC)

in June 2008, with the objective of achieving a sustainable path of development that

simultaneously advances economic and environmental objectives. The NAPCC enunciates eight

key National Missions (Fig 1) guiding the country through the climate change challenge, with a

specific mission on enhancing energy efficiency.

Figure 1: National Missions of the NAPCC

2.3 The National Mission for Enhanced Energy Effieicncy (NMEEE)

NMEEE as a key component of the NAPCC reflects the GOI’s increased and renewed emphasis

on achieving energy efficiency in Indian economy. This mission by promoting innovative policy

and regulatory regimes, financing mechanisms, and business models; seeks to not only create,

but also sustain, markets for energy efficiency in a transparent and time bound manner. In

addition to the ongoing schemes and programmes, the NMEEE puts in place four new initiatives

to enhance energy efficiency.

The Mission seeks to create conducive regulatory and policy regime to foster innovative and

sustainable business models to unlock this market. As a result of implementing NMEEE, it is

estimated that at its full implementation, about 23 million tonnes of oil equivalent (MTOE) of

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fuel will be saved, a capacity addition of over 19,000 MW will be avoided, and emissions of

carbon dioxide reduced by 98.55 million tonnes annually.

Thus, in order to achieve this, the mission sets out a comprehensive strategy, consisting of the

following components:

1. Creating a demand for energy-efficiency products, goods, and services by spreading

awareness about the efficacy of these products and services, amending government

policies and programmes to integrate energy efficiency, preparing bankable projects to

stimulate the process, and offering the right incentives to cost-effective improvements

in energy efficiency in energy-intensive industries and facilities through certification of

energy savings that could be traded.

2. Ensuring adequate supply of energy-efficient products, goods, and services. This is

being done by creating a cadre of certified energy professionals; promoting energy

service companies (ESCOs), standards, and labelling of end-use equipment and

appliances; and preparing structured programmes to leverage international financing

instruments including the Clean Development Mechanism (CDM) to reduce transaction

costs to attract private investment, etc.

3. Creating and promoting the energy efficiency financing platform, setting up Partial Risk

Guarantee Fund for Energy Efficiency, and developing innovative financial derivatives

of performance contracts and fiscal and tax incentives for investment in this sector.

4. Creating and adopting robust and credible monitoring and verification protocols to

capture energy savings from all energy-efficiency activities in a transparent manner.

5. Taking necessary steps to overcome market failures by appropriate regulatory and

policy framework to support the measures mentioned above.

Efforts of the government to create a market for energy efficiency need to be supplemented with

appropriate fiscal instruments, which must be designed to address the following objectives.

a) Leadership in the public sector on energy efficiency.

b) Promoting energy Reassuring lenders by providing a guarantee for performance

contracts.

c) Providing a venture capital fund from the Government to provide equity for energy-

efficiency projects.

d) Promoting efficiency in public procurement based on life cycle cost analysis.

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e) Promoting regulatory incentives to state utilities through electricity regulatory

commissions for DSM projects.

f) Offering concessions on taxes and duties to attract investment.

2.3.1 Energy Efficiency Financing Platform (EEFP)

To provide a platform to interact with financial institutions and project developers for

implementation of energy efficiency projects the Energy Efficiency Financing Platform (EEFP)

was launched as one of the initiatives under NMEEE. Under this programme, MoUs have been

signed by BEE with M/s. PTC India Ltd, M/s. SIDBI, HSBC Bank, Tata Capital and IFCI Ltd to

promote financing for energy efficiency projects.

For capacity building of FIs, BEE signed MoU with Indian Banks’ Association for the Training

Programme on Energy Efficiency Financing. Till date four Training of Trainers workshops were

organized and more than 100 banking/NBFC officials have been trained on EE financing. BEE

launched a booklet on “Success Stories for Energy Efficiency Projects Financed in India” and a

“Training Manual for Energy Efficiency Financing in India”. This booklet of 50 success stories

of Energy Efficiency projects financed by SIDBI covers 20 industrial sectors across the country

to adopt energy efficient technologies and processes. The training manual covers all the training

modules/presentations required for the understanding of energy efficiency projects and their

characteristics, and it aims to help in technical/financial evaluation of EE projects.

Under EEFP, awareness workshops for financial instruments available for EE financing are

being organized, and market assessment for PRGFEE and VCFEE was done in 2016 on which a

report was also published.

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2.3.2 Framework for Energy Efficient Economic Development (FEEED)

FEEED focuses on developing appropriate fiscal instruments to promote energy efficiency

financing. In this context, two programmes have been commenced i.e. Partial Risk Guarantee

Fund for Energy Efficiency (PRGFEE) and Venture Capital Fund for Energy Efficiency

(VCFEE).

a. Partial Risk Guarantee Fund for Energy Efficiency (PRGFEE)

Under NMEEE, BEE has institutionalized PRGFEE for addressing the debt related issues in

financing EE projects. PRGFEE is a risk sharing mechanism to provide Participating financial

institutions (PFIs) with a partial coverage of risk involved in extending loans for EE projects.

PRGFEE guarantees 50% of loan amount or Rs. 10 crore per projects, whichever is less.

PRGFEE support has been provided to government buildings, private buildings (commercial or

multi-storey residential buildings), municipalities, SMEs and industries. This guarantee is

extended to financial institutions which will extend loans to ESCOs for implementing EE

projects.

Status of Implementation / Activities of PRGFEE:

i. Under PRGFEE, MoP has constituted Supervisory committee for monitoring the

implementation of PRGFEE.

ii. BEE has appointed a consortium of RECPDCL-REC-EESL as Implementing Agency

(IA) for operationalization of PRGFEE in July 2015.

iii. Operation Manual for PRGFEE has already been approved.

iv. PRGFEE rules have been notified in May 2016.

v. Four FIs have been empanelled under PRGFEE which are Andhra Bank, Yes Bank,

Tata Cleantech Capital Ltd. and IDFC Bank till date.

b. Venture Capital Fund for Energy Efficiency (VCFEE)

To encourage equity investment in EE projects, BEE has institutionalized Venture Capital Fund

for Energy Efficiency (VCFEE) in India. Venture Capital Fund for Energy Efficiency is a fund to

provide equity capital for energy efficiency projects. The Fund shall provide last mile equity

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support to specific energy efficiency projects, limited to a maximum of 15% of total equity

required, through Special Purpose Vehicles or Rs. 2 crores, whichever is less. The support has

been provided to only government buildings, private buildings (commercial or multi-storey

residential buildings) and municipalities.

Status of the Implementation of VCFEE:

i. The VCFEE has been constituted under the provisions of Indian Trust Act

1882. The trust deed was registered with jurisdictional sub-registrar

Government of Delhi.

ii. Board of Trustees for VCFEE has been constituted.

iii. Fund Manager for operationalization of VCFEE has been identified. VCFEE

Rules have been notified on 31st March 2017.

2.4 Need for Energy efficiency Financing in India

In its Nationally Determined Contributions (NDC), India has declared a voluntary goal of

reducing the emissions intensity of its GDP by 33 to 35% by 2030 from 2005 levels. To achieve

this goal, investments in energy efficiency (EE) are being increasingly recognized as the most

cost-effective options, in the short to medium term, to reduce costs, deliver increased economic

productivity and competitiveness, increase energy security, and mitigate emissions of greenhouse

gases.

Recognizing the need for finance to achieve the above goals, the United Nations Framework

Convention on Climate Change (UNFCCC) has constituted a fund called the Green Climate

Fund (GCF) with an aim to assist developing countries in adaptation and mitigation practices to

counter climate change. It will be the centre piece of efforts to raise climate finance of $100

billion a year by 2020 and will support projects, programmes, policies and other activities aimed

at climate change adaptation and mitigation in developing country parties.

The Asian Development Bank (ADB) estimated that one to 4% investment in EE, as a share of

overall energy sector investment, can meet as much as 25% of the projected increase in primary

energy consumption in developing Asian countries by 2030. India clearly has a huge potential

for cost-effective investments in EE, and this potential has been well documented in recent

reports. For instance, using data from 1999 to 2004, two studiesconcluded that the potential for

investment in EE measures in India was between USD 3.0 and 3.5 billion. Despite this vast

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potential and need for EE investment, and the growing importance placed by national and state

policymakers on EE, the rate of investment in EE technologies and projects is lagging far short

of its potential. This is due to a number of well-documented technical, institutional and financial

barriers.

2.5 Scope of Work:

The agency is expected to provide the following services:

1. Study on existing fiscal/monetary policies globally and proposing new innovative

replicable models

2. Assessment of the energy efficiency funding requirement for next 10 years in India, in

due consultation with all the stakeholders. (e.g. BEE, State Designated Agencies, ESCO

and Financial institutions). An online survey is expected on this assignment, which will

cover all the major stakeholders, and a survey report shall be submitted to BEE with

database and analysis sheets of all responses.

3. Study of the financing mechanisms introduced by the following funding agencies in field

of energy efficiency or similar area:

a) International Lending Agencies

b) Scheduled commercial banks

c) Non-banking financial companies and Public financial institutions

4. To carry out an exhaustive review of national and international experience on financing

EE projects. This should include all type of mechanisms used, the success or otherwise

of these mechanisms and the impact they had on financing EE projects nationally and

globally.

5. To short list top five innovative financing mechanisms with potential to enhance

financing of EE projects in India which may be implemented by BEE. It is proposed that

these new schemes shall be operational after FY19-20. These financing mechanisms

should include all types of models i.e. interest based, capital based, tax based, etc. with

following details:

i. Details of mechanism with SWOT analysis.

ii. Brief operational structure with funding cost to BEE

iii. Assess market potential for the demand of such financing mechanisms

iv. Financial, technical and environmental impact (with estimates of energy

savings) of proposed financing mechanisms

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v. Estimated timeline with required steps to operationalise these financing

mechanisms

vi. draft tender documents for hiring implementing agencies and empanelling

financial institutions for short listed financing mechanisms

vii. To provide legal, technical and financial advice for further improvisation in

PRGFEE and VCFEE schemes.

These new and innovative financing schemes shall be formulated with stakeholders

meetings, and subsequently operational structure shall be prepared. The tentative

list of financing mechanisms is as follows:

1. Capital Subsidy Scheme (CSS):

The objective of this capital subsidy scheme is to partially support DCs in making investment to

meet their SEC targets in each PAT cycle. To give limited financial support to MSME likely to

be covered under PAT scheme and those semi-government/government/PSU DCs, it is proposed

to launch a capital subsidy scheme for EE projects to cover capital cost of maximum 75% of the

EE equipment/ technology installed or Rs. 20 lakhs per DC, whichever is minimum. The

eligibility criteria and operational structure of this scheme shall be formulated by conducting

stakeholders workshops and hiring outside Agency/Consulting Agency for this scheme.

2. Refinance scheme for EE loans:

For this project, BEE proposes a tie up with any Public financial institution, which shall be the

Implementing Agency (IA) for this fund. If the lending bank/NBFC wanted to refinance its

existing loan on EE projects through IA then this facility may be allowed for individual loans or

bouque of loans for individual banks upto the limit of Rs. 50 crore per Bank/NBFC for

individual loans or bouquet of loans for providing refinance up to 80% of the loans outstanding

to eligible borrowing institutions. BEE proposes to create a revolving fund of Rs. 1000 crore that

may be placed with Implementing Agency and it shall be asked to utilize it as per the rules. For

refinancing of EE loans the rules shall be formulated by IA with approval of BEE and MoP. The

IA shall use the interest accrued on the fund corpus to meet the administrative expenditure

(including marketing cost) and shall transfer 1% of this fund corpus annually to BEE for meeting

administrative expense related to monitoring of regular activities of this fund. This fund shall

have life of 20 years and at the end of 20 years the remaining balances shall be returned to

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Government of India. BEE shall send proposal for this ‘Refinance scheme for EE Loans’ to

allocate fund of Rs. 1000 crore through NCEF for this scheme.

3. Interest Subvention Scheme :

It is proposed to include EE projects under Interest Subvention Scheme, so as to provide direct

benefit to ESCOs and MSMEs.

Note: Apart from the above 3 financing mechanisms the bidders are supposed to suggest 2 more

financing mechanisms.

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3. DURATION OF CONTRACT

The duration of the contract is 2 years from the date of signing of contract with the final bidder.

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4. SELECTION PROCESS

4.1 Minimum Eligibility Criteria

The Agency interested in being considered for this assignment must fulfill the following criteria:

1. The applicant should be a registered organisation or consortium of organisations with a

formal intent to enter into an agreement. Consortium would be limited to two bidders only

(i.e. one lead partner and consortium member). The organization registered under Companies

Act or Societies Registration Act shall be eligible to apply. Subcontracting after award of

EOI is not allowed. The organisation (in case of consortium, the lead-member of the

consortium) must be registered/incorporated in India, with at least 10 years of experience in

the field of consultancy services/research area.

2. Experience of providing consultancy/ transaction advisory in field of energy efficiency/

energy/ power sector in the last five years on at least 5 projects, preferably with Central/State

government or Multilateral agency.

3. Annual turnover of minimum Rs. 50 crores in any of the last three years. i.e. FY 2014-15, FY

2015 - 16, and FY 2016 - 17.

4. Should have a team of at least 50 personnel on permanent payrolls of the bidding

organization in the last financial year. The Consultant shall have following as minimum team

strength of 7 personnel:

S.no Work

Profile Area of expertise No.

Minimum

years of

experience

1 Team Leader Financial expert 1 15

2 Team

Member

Financial Analyst (C.A/C.S/CFA) or MBA (Finance) 2 10

3 Team

Member

BEE's Accreditated Energy Manager/Auditor 1 10

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4 Team

Member

Legal Expert (Law graduate from a recognized

University)

1 5

5 Team

Member

Economist (M.A./M.Sc. in Economics, Master in

Business Economics)

1 5

6 Team

Member

Banking 1 5

5. The team should be led by a member with over 15 years of extensive experience of

Financial Feasibility, Due Diligence in energy sector/ infrastructure projects.

6. One team member with Economics/Finance background should be reporting to BEE

every alternate working day for atleast four hours during first 12 months of the

contract.

7. Should not be involved in any major litigation that may have an impact of affecting or

compromising the delivery of services as required under this contract.

8. Should not be blacklisted by any Central/ State Government / Public Sector

undertaking.

9. In addition to above, interested firms are required to provide the following details :

i. Name of the entity:

ii. Type of Organization: Govt./ Semi Govt./ Autonomous/private

iii. About the Organization (Including Brochures or Corporate Literature)

iv. Broad organizational Structure of starting from Ministry/deptt of central or State

Government to senior management level

v. Details/ Outline on experience in similar assignments undertaken in the past

vi. Copies of the last three audited financial statements

vii. Details of accreditations and certifications in India.

10. All supporting documentary evidence aforementioned above.

11. Experience of sub-contractor including parent company may be stated only if the

relevant Memorandum of Understanding (MoU) is submitted. After issuance of work

order to the selected agency, this MoU needs to be registered as agreement.

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Any other additional information that the interested firm believes is relevant to expressing their interest in and commitment to the Project.

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5. Preparation of proposal:

Subsequent to this announcement, BEE intends to follow a Request for Proposal (RfP) process

for selection of the Agency for the Project. This request for EoI does not constitute an offer

for award of contract. However, a response to this EOI is mandatory to become eligible to

participate in the subsequent RfP process. Evaluation and selection criteria will be prescribed as

a part of the RFP.

The response to this EOI is to be submitted to Secretary (BEE) in Original + Two (2) copies. All

the pages of the proposal must be duly signed by the Head of the Organization/ Department or

the authorized nominee with company seal. Expressions of Interest must be delivered in a written

form to the address below [in sealed covers superscripted with “Expression of interest (EoI) for

Hiring of an Agency for developing new financing mechanisms for Energy Efficiency” by 3

PM on 26th

February 2018.

The Secretary

Bureau of Energy Efficiency

Sewa Bhavan, 4th Floor,

R.K. Puram, Sector 1

New Delhi 110 066

Tel: 011-26179699

Fax: 011- 26178352

BEE reserves the right not to invite any person/entity that has not made an application pursuant

to this announcement, for the bid process. BEE also reserves the right to reject or accept any EoI

from any person/entity and further reserves the right to modify, cancel, suspend or terminate any

aspect of the selection process at any time, for any reason and without giving prior notice. This is

not to be considered as an offer.

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5.1 Disclaimer

BEE and its officers, employees disclaim all liability from any loss or damage, whether

foreseeable or not, suffered by any person acting on or refraining from acting because of any

information including statements, information, forecasts, estimates or projections contained in

this document or conduct ancillary to it whether or not the loss or damage arises in connection

with any omission, negligence, default, lack of care or misrepresentation on the part of BEE

and/or any of its officers, employees.