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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


Copyright

©2010 Information for Development Program (infoDev)/The World Bank

1818 H Street NW

Washington DC 20433

Internet: www.infoDev.org

Email: [email protected]

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To cite this publication:

Climate Innovation Center Business Plan: India. An infoDev publication, November 2010.

Available at: www.infodev.org/climate


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


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


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


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


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.


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.


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


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


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.


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.


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


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


Technology 4: Solar


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


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


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


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


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


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


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.”


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


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


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


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.


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.


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


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


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.


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


and trends

Identify market needs, and match them to

available technologies

Entrepreneurs too tech-focused with

no consideration to market needs


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


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.


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.


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.


CIC Model: India


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


knowledge of funding options

available


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


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


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.


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


knowledge of R&D opportunities


commercial terms with industry

A support system for global collaboration

on R&D, technology transfer and

knowledge sharing


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


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.


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


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


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


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)


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


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


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


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


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.


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


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


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.


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


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


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.


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.


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


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.


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


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

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