Professional Risk Opinion
Accreditation of Channel Partners under
Jawaharlal Nehru National Solar Mission
for Off Grid and Decentralized Solar
Applications
CARE’s Grading is aimed towards categorizing
Renewable Energy Service Companies (RESCOs)
& System Integrators into grades based on their
performance capability & financial strength to
undertake off-grid solar projects
Background
Ministry of New and Renewable Energy (MNRE) has
launched Jawaharlal Nehru National Solar Mission
with an objective to promote the use of renewable
sources of energy and setting up an environment
which will facilitate increased penetration of solar
technology in the country. The mission envisages
providing capital and interest subsidy to make the
solar off-grid projects commercially viable and
workable on a sustainable basis.
To scale up the said program, increase participation
of capable entities and reduce transaction time, the
mission has envisaged that RESCOs and System
Integrators obtain an accreditation from a rating
agency like Credit Analysis & Research Ltd.
(CARE) so as to enable them to submit project
directly to MNRE.
Grading Framework
CARE‘s grading will reflect “The performance
capability and financial strength of channel partner to
undertake off-grid solar projects.”
Grading Parameters for RESCO
• Promoter Track Record
Performance
Capability
• Project Management Capability
• Customer Concentration, Quality
and ability to manage receivables
• Networth
Need for Grading
• To enable participation of only credible channel
partners in the project implementation.
• To act as a powerful tool for effective promotion of
best practices in the sector
• Tool to monitor performance capability over time
and incentivize the efficient channel partners.
Financial
Strength
• Bankers Feedback
• Financial Flexibility
• Project Related Assessment
Grading Parameters
for System Integrators
• Promoter Track Record
Advantages of Grading
Performance
Capability
• To enable channel partners to submit the project
proposal directly to MNRE thereby reducing
transaction time
• Scope for Self Correction and improvement on
capability performance and financial soundness.
• Encourage participation of startups and innovative
entrepreneurs with requisite technical skills.
• Quality of Suppliers and Tie-Ups
• Customer And O&M Network
• Sales
• Grading would enable the channel partners to
showcase their capability in executing projects to
various stakeholders.
• Facilitates faster access to capital and interest
subsidy
• Technical competence and
Adequacy of Manpower
• Networth
• Return on Capital Employed
Financial
Strength
• Current Ratio
• Outside Liabilities/Tangible
Networth
• Interest Coverage
• Bankers feedback on conduct of
account & integrity
Professional Risk Opinion
Grading Process
A flowchart depicting the grading process to be adopted by CARE is given below
Channel Partner
CARE
Assigns grading team
Request for Grading
Submits information and
detailed schedules
Team interacts with the channel partner, undertakes visit,
analyses data Submitted
GRADING COMMITTEE awards grading. Grading is
conveyed to client along with Key Grading Considerations
Grading
Accepted
Yes
Detailed Report issued; Notification in Press
Revalidation of grading at the end of the validity period
No
Appeal for Review
of grading
Grading Validity
Grading Scale
The Grading would be done on 5 X 3 matrix, which would
asses the company on performance capability & financial
strength.
FINANCIAL STRENGTH
PERFORMANCE
CAPABILITY
High
Moderate
Low
Highest
SP 1A
SP 1B
SP 1C
High
SP 2A
SP 2B
SP 2C
Moderate
SP 3A
SP 3B
SP 3C
Weak
SP 4A
SP 4B
SP 4C
Poor
SP 5A
SP 5B
SP 5C
The grading will be valid for a period of two
years for entities with the highest performance
capability (Graded 1A/1B/1C), while for all
other entities the grading will be valid for a
period of one year.
Why CARE Ratings
Ø
Regulatory Recognition
Credit Analysis & Research Ltd. (CARE) is recognized
by Government of India and all regulatory agencies in
India like SEBI, RBI, NABARD, NHB and NSIC. RBI
has also recognized CARE as an eligible external
credit rating agency for the purpose of Basel II
implementation in India. CARE is also recognized by
Bureau of Energy Efficiency for ESCO Gradings and
Ministry of New & Renewable Energy for Grading of
Channel Partners under Off-Grid Solar scheme.
Independent
Ø
CARE is an independent rating agency promoted by
major banks and financial institutions in India. The
three largest shareholders of CARE are IDBI Bank,
Canara Bank and State Bank of India. CARE is the only
rating agency in India which operates with an
independent Rating Committee comprising senior
and reputed professionals.
Professional
Ø
Analyst team of CARE includes qualified and multifaceted professionals from diverse backgrounds such
as; financial analysts, engineers, economists, sector
specialists, chartered accountants, chartered financial
analysts and financial risk managers. CARE is a
founder member of the Association of Credit Rating
Agencies in Asia (ACRAA) and is actively in dialogue
with Asian and International rating agencies.
Credit Analysis & Research Ltd.(CARE), was promoted in 1993
by some of the leading Indian banks and financial institutions.
Major shareholders of CARE include lDBI Bank Ltd., Canara
Bank and State Bank of India. CARE is amongst the premier
credit rating agencies in India and provides credit rating,
research and information services. CARE Ratings is well
equipped to rate all types of debt instruments including
commercial Papers, Fixed Deposits, Bonds, Debentures, Hybrid
Instruments, Preference Shares, Loans, Structured Obligations,
Asset Backed Securities, Residential Mortgage Backed
Securities etc. CARE's rating methodologies are in line with the
best international practices. CARE has also been empanelled
with Bureau of Energy Efficiency (BEE) for grading of Energy
Services Companies (ESCOs).
For More Information, Please Contact
CREDIT ANALYSIS & RESEARCH LIMITED
Website: www.careratings.com
HEAD OFFICE
Mr. P.N. Sathees Kumar
Tel: : +91- 022- 67543555, Cell: 9820416004
e-mail: sathees.kumar@careratings.com
Ms. Meenal Sikchi
Tel: : +91- 022- 67543455, Cell: 9819009839
e-mail: meenal.sikchi@careratings.com
4th Floor, Godrej Coliseum, Somaiya Hospital Road,
Behind Everard Nagar, Off Eastern Express Highway,
Sion (E), Mumbai 400022.
TEL : 022-67543456, 9820416004/ 9819009839
FAX : 022-67543457, e-mail: care@careratings.com
REGIONAL OFFICES
NEW DELHI :
Ms. Swati Agrawal,
710 Surya Kiran,19 K.G. Road, New Delhi - 110 001.
Tel: +91- 011- 2331 8701/ 2371 6199 Cell: 98117 45677
e-mail: swati.agrawal@careratings.com
KOLKATA :
Mr. Sukanta Nag, 3rd Floor, Prasad Chambers (Shagun Mall Building),
10A, Shakespeare Sarani, Kolkata - 700 071
Tel: +91-033- 2283 1800/ 1803, 2280 8472 Cell: 98311 70075
e- mail: sukanta.nag@careratings.com
AHMEDABAD :
Mr. Mehul Pandya,
32, Titanium, Prahaladnagar Corporate Road, Satellite, Ahmedabad - 380 015.
Tel: +91-79-40265656 Fax: +91-79-40265657 Cell: 98242 56265
e-mail: mehul.pandya@careratings.com
CHENNAI :
Mr V.Pradeep Kumar,
Unit No. O-509/C, Spencer Plaza, 5th Floor, No. 769, Anna Salai, Chennai 600 002
Tel: 2849 7812/2849 0811 Cell: 9840754521 Fax: 2849 0876
e-mail: Pradeep.Kumar@careratings.com
Disclaimer
CARE’s Grading reflects CARE’s opinion on the ability of the Graded channel partner’s
performance capability & financial strength based on the information provided by the entity
or obtained by CARE from sources, it considers reliable. CARE does not guarantee the
completeness or accuracy of the information on which grading is based. A CARE grading is
not a recommendation to use the services of the Graded channel partner, or to make
investment in any financial instrument issued by Graded channel partner.
CARE has the right to revise gradings as and when circumstances so warrant. CARE does
not make itself liable for any errors of omission, commission or judgement and specially
states that it shall have no financial liability whatsoever to the subscribers/users/
transmitters/distributors of its grading.
BANGALORE :
Mr. G. Sundara Vathanan.
Unit No. 8, I floor, Commander's Place, No. 6, Raja Ram Mohan Roy Road,
(Opp. P F Office), Richmond Circle, Bangalore - 560 025. Karnataka.
Tel:+91-(080) 2211 7140 Cell:98860 24430
e-mail: Sundara.vathanan@careratings.com
HYDERABAD :
Mr. Ashwini Kumar Jani,
401, Ashoka Schintilla 3-6-520, Himayat Nagar, Hyderabad,500029,
Tel: - +91-040-40102030/1 Cell: 9176647599,
e-mail: ashwini.jani@careratings.com