July 2012 | tata.com

Seeding a greener future

Tata Capital made its foray into the area of climate change with the formation of Tata Cleantech Capital (TCCL) a joint venture with the International Finance Corporation. Avijit Bhattacharya, CEO, TCCL, talks to tata.com about the company's activities in the energy efficiency sector.

What is the objective of the cleantech business?
TCCL is a joint venture between Tata Capital and the International Finance Corporation (IFC). Globally, IFC supports numerous cleantech projects by providing funding (debt and equity) and advisory services. Tata Capital has developed very strong relationships in the Indian market over the last four years by providing similar services to corporates across industries. The joint venture brings together IFC’s global expertise in cleantech with Tata Capital’s experience in the local market to serve firms in the area of renewable energy, energy efficiency and water management. TCCL has applied to the Reserve Bank of India for a non-banking financial company (NBFC) license. Post receipt of the NBFC license, we will commence lending activities.

How does Tata Capital fit into the value chain for a green venture?
The energy sector is one of the most important drivers of the Indian economy and the availability of reliable and affordable power is essential to sustain GDP growth rates of over 8 percent. At TCCL, we are focusing our efforts on energy efficiency and renewable energy generation projects such as wind, solar, hydro and biomass projects. We are also looking at other projects that aid in reduction of carbon footprint such as water management.

TCCL would like to straddle the entire cleantech value chain. We are working not only at the project level with independent power producers, but also with equipment manufacturers, engineering, procurement, construction (EPC) contractors, operation and maintenance (O&M) service providers, technology providers, carbon traders and consultants.

What are the opportunities you see in the cleantech space?
Cleantech projects are capital-intensive in nature. We have seen that in the past this space has been largely driven by government policies and regulations; however, availability of finance is also an enabler. TCCL’s objective is to address specific challenges faced by this industry (long-term project level funding, bridging the knowledge gap related to technologies, etc) and develop the cleantech finance market within India.

What are your other initiatives in this area?
We have recently signed an MoU with the Bureau of Energy of Efficiency to promote energy efficiency projects in India. We have started hosting round table conferences with designated consumers (DCs) who have been mandated to reduce their energy consumption under the recently notified Perform Achieve and Trade scheme. At these conferences, we facilitate discussions between DCs and energy-saving companies on various financial mechanisms available to implement energy efficiency projects. We are actively working on developing a number of such projects.

Tata Capital has an MoU with Tata Consulting Engineers and MITCON to provide advisory and consultancy services to our clients. We are in the process of building relationships across the entire value chain – independent power producers, equipment manufacturers, technology providers, EPC contractors, O&M service providers, power purchase utilities, financial institutions, carbon traders and government bodies.

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