PFS is sponsored by PTC India Ltd. (PTC) – the largest power trading company in India (operating since 1999). PTC currently holds a 77.6% equity stake in PFS while GS Strategic Investments Limited and Macquarie India Holdings Limited each hold a 11.2% equity stake.

IFC plans to provide long term debt to PFS of up to $50 million in the form of a senior loan, which will be used exclusively for on-lending to companies and projects in the renewable energy space in India.

50.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	50.0
Equity

* These investment figures are indicative

PFS’s registered office is in New Delhi, however the Company is expected to utilize the funding from IFC for investments in renewable energy companies and projects across the country.

Wider impact: With IFC’s support, PFS can support a wider range of clients in the RE space potentially across multiple technologies and increase the renewable energy generation base in India. Demonstration effect: PFS is a developing financial intermediary and its expansion in this space is likely to help attract other financial institutions to increase their risk appetite and invest more in these sectors. GHG Savings: The proposed investment will result in substantial savings of GHG emissions as it will encourage power generation from renewable and climate friendly fuels. This is critical in view of Government’s overall intention to reduce carbon emissions. Institution building: IFC’s support to PFS will help it to scale up its capacity to assess clean energy projects through sharing of its experience and knowledge of the sector worldwide.

Sector expertise: IFC has gained vast experience in the RE space through several transactions with its real-sector clients in India and abroad (including developing areas like geo-thermals etc). PFS has been developing a pipeline in the space on its own and with support from the parent and IFC’s presence and advisory support would aid the process. Long term commercial funding: IFC’s loan, being long term, will help PFS provide funding for long gestation RE projects. Funding to smaller private sector players: The proposed project would also help increase availability of funding to smaller private sector players. Environmental and Social Sustainability: Given IFC’s expertise in environmental and social standards, IFC is well positioned to support PFS in developing global best practice E&S standards for its clients to adopt.

This project has been classified as a Category FI project according to IFC’s Environmental and Social Review Procedure.

During appraisal, IFC analyzed the activities proposed to be supported with IFC financing for types of transactions, size, tenor and industry sectors and determined the Applicable Performance Requirements based on an analysis of the potential Social and Environmental risks associated with the FI portfolio and considering IFC’s investment. The Applicable Performance Requirements are (i) the IFC Exclusion List; (ii) the applicable National Social and Environmental Laws and regulations; and (iii) the IFC Performance Standards. IFC has reviewed the FI’s existing S&E risk management procedure. It was found that the FI:

 Undertakes E&S regulatory compliance review for all projects as part of its Social & Environment Due Diligence (SEDD) process. It reviews project related documents such as EIA, SIA, EMP, etc and undertakes site visit at the time of appraisal.
 Is in the process of developing a formal Social & Environment Management System (SEMS) for Renewable Energy projects i.e. Wind, hydro, solar, geo-thermal, waste to energy, bio-fuel and biomass based co-generation. The SEMS will be benchmarked to IFC Performance Standards and will include detailed sectoral guidelines.
 Has two officers charged with the responsibility of ensuring S&E risk assessment of projects. The S&E risk assessment is carried out by all investment officers along with project appraisal.

IFC will appraise the FI’s labor practices to ensure compliance with the IFC Performance Standard 2 on Labor and Working Conditions.

Based on the Applicable Performance Requirements and FI’s existing S&E risk management procedures and capacity review, the project will be required to:

 Develop an Social & Environmental Management System (SEMS), to the satisfaction of IFC;
 Ensure that there is adequate capacity within the FI to implement its SEMS and to ensure compliance of projects with the applicable requirements;
 Commit to implement the SEMS, to ensure that its investments/activities supported by IFC financing are in compliance with the Applicable Performance Requirements;
 Commit to applying the labor standards established by the IFC Performance Standard 2: Labor and Working Conditions; and
Submit a periodic report to IFC as per a format to be provided by IFC.