The

verd

uro

us

pla

net

1

Th

e V

ati

can

's P

lan

eta

ry S

tew

ard

ship

in

itia

tive

en

vis

ag

es

eco

-re

sto

rati

on

;

Facin

g p

ag

e: P

en

gu

in 'Sir

' N

ils

Ola

v in

spe

cts

a g

uard

of

ho

no

r (R

eu

ters

im

ag

e)

King Knights Emperor

Penguin Nils Olav, an honorary

member and

mascot of the

Norwegian King's Guard, resident of

the Edinburgh

zoo, received a

regimental knighthood in August

2008. King Harald the Fifth of

Norway described Nils as a penguin

"in every way

qualified to receive

the honour and dignity of

knighthood".

The Vatican is slated to become the

first ‘carbon-neutral’ sovereign state

through the proposed Vatican

Climate Forest

to be created in

Hungary's Bükk

National Park, sized

to absorb its annual carbon

emissions. This

is over and above its

efforts to reduce its carbon

footprint through enhanced

efficiency of energy usage and the

increased use of solar power. “When

man forgets that he is a faithful

servant of this earth, it becomes a

desert that threatens the survival of

all creation.” – Pope Benedict XVI

3

Sp

read

ing

its

win

gs

an

d e

lev

ati

ng

gre

en

fir

ms

in t

he

pe

ckin

g o

rde

r: T

he

Ve

rdu

rou

s In

de

x

The Verdurous India Index

The Verdurous India Index

(“Verdurous 25”), is a modified

market capitalization based index

comprising 25 firms listed on India’s

National Stock Exchange (NSE). This

specially constituted index

comprising both, ‘pure-play’ green

stocks viz., wind energy generation,

waste-water treatment etc., as well

as ‘old-economy’ manufacturing

sectors viz., cement, automotive,

sugar etc., tracks the genuine

‘greenness’ of the Indian economy,

and is the first of its kind anywhere

in the world.

World Environment day, the 5th of

June 2009, is the base date for index

computation with a base value of

1000. The index is tracked over four

years, approximately overlapping

with the length of an entire

business cycle, and has emerged as a

low-risk portfolio, with returns

comparable to the benchmark

NSE500 index.

Periodic updates and other details

relating to the index are posted on

http://index.verdurous.in.

5

Ap

an

aro

mic

vie

wo

fth

eh

igh

est

pe

aks

inth

eH

imala

yas;

asm

all-h

yd

rop

ow

er

ge

ne

rati

on

pla

nt

inN

ep

al.

Earthly Intervention

Clean Energy Development

Bank, Nepal

Nepal is an energy resource surplus,

electric power deficient country,

further set-back by the decade-long

power struggle. The Clean Energy

Development Bank, Nepal, is

specially constituted to stimulate

the renewable energy sector in

Nepal, helping harness the

abundantly available small hydro

power and other clean sources such

as wind, solar PV, solar thermal,

biogas etc.

Verdurous has undertaken a thread-

bare analysis of the macroeconomic

and context-specific factors

impacting the viability of bank

operations: ascertained the market

opportunity, evaluated the industry

structure and mapped the bank’s

competitive positioning. The due

diligence investigation has been

carried out on behalf of FMO and

Triodos Bank, The Netherlands.

Strategies are developed to enable

the bank maintain focus on financial

intermediation for the clean energy

sector, and to differentiate its

product offering.

Client Feedback

“..your report has been quite a

pleasure to read; well informed, well

delivered; .. conclusions are very

valuable.

7

Sm

all

hy

dro

po

we

ro

ffe

rsh

op

efo

rb

rid

gin

gth

ee

ne

rgy

de

ficit

inSo

uth

Asi

a:

A2

MW

small

hy

dro

po

we

rp

lan

tin

sou

the

rnIn

dia

Large

PE investments in

small hydro power

Verdurous

has developed a pipeline

of investment projects, primarily in

the small-hydro-power, for a Dutch /

Swiss private equity fund seeking to

invest in clean energy projects in

emerging markets in south Asia. In

addition, to Indian projects,

Verdurous personnel have

conducted

detailed due diligence

investigations

on investment

opportunities

in Nepal and Sri Lanka

covering several technology

packages including waste to energy,

biomass based power generation,

sugarcane cogeneration, large scale

wind energy, solar thermal systems

etc.

9

Atr

iballa

dy

co

okin

gw

ith

fire

wo

od

(pic

ture

co

urt

esy

Dr.

M.G

.Sati

sh);

ten

de

rco

co

nu

td

isp

laye

dalo

ng

an

inte

r -st

ate

hig

hw

ay.

The roads less straddled:

Rural Energy Initiatives

Verdurous

personnel have

undertaken

an independent

assessment of rural initiatives,

essentially

involving the set-up of

supply

chains

for energy technology

and

sources, viz., solar PV, LPG

bottles,

etc., and for energy

efficient

devices and gadgets viz.,

LED

based

lighting systems, lanterns,

pressure

cookers etc. Three distinct

investments are analyzed: the

constitution

of a dedicated clean-

energy

private equity fund, an

energy service company and a

financial intermediary focussing on

grass-roots initiatives.

A detailed assessment report was

prepared

for the Vienna, Austria

based

Renewable Energy and Energy

Efficiency

Partnership (REEEP),

containing

inter alia, a synthesis of

the

lessons

learnt from each

initiative

and an estimation of the

sustainability

of each of the

projects.

Client Feedback

“..thank you sincerely for your

efforts and assistance with this

project.” “..the impact assessments

look good..thanks for doing a good

job.”

11

Ver

duro

us

pe

rso

nn

eld

iscu

ssin

g t

ech

no

log

yre

late

d iss

ue

sw

ith

on

-sit

est

aff

at

aw

ind

-farm

in

So

uth

ern

Ind

ia

Sailing Upwind

PE Investments in Wind

Farm Consolidation

In the capacity of resident partner,

Verdurous has forged an

investment partnership between a

reputed US based private equity

fund and a large Indian business

group. The investment envisages

consolidating the wind energy

generation capacity in the country

by acquiring wind energy

generators currently owned by

disparate entities. The venture is

slated to grow through green-field

expansion and brown-field

acquisition.

Verdurous has also undertaken

detailed due diligence of the first

lot of wind farms, aggregating over

75MW of capacity employing

traditional as well as contemporary

techniques including the valuation

of ‘real’ options for growing the

venture. The detailed business case

for the venture was developed.

13

Co

nce

rnfo

rth

en

atu

rale

nvir

on

me

nt:

Kin

gP

ari

left

his

ch

ari

ot

tosu

pp

ort

aw

ild

jasm

ine

cre

ep

er

Lo

go

de

sig

nco

urt

esy

:C

he

nn

ave

era

mm

aN

oo

lvi,

Nid

hi

Varm

a,

An

nie

Varg

he

seC

he

rian

,B

hara

thU

rs,

Arc

han

aU

rs,

Pra

mo

dn

ath

D.

The Verdurous Logo

The 9th Century Chola King from

southern India, “Vallal” (literally

patron or benefactor) Pari, was

renowned for his sense of fairness

and justice and above all his

generosity towards and care for all

things living. On one of his journeys

through the forest, he observed

that the tree hitherto supporting a

creeper had been chopped. Legend

has it that he offered his chariot to

support the wild jasmine creeper in

place of the tree. This is by far the

most magnanimous gesture in

recorded history, on the part of any

king, in caring not just for humans

but for mute creatures and plants as

well.

Verdurous draws inspiration from

Vallal Pari’s concern for the natural

environment.

15

Cool guy

The ‘Ice Man’ of Ladakh

Over the past 22 years, eco-activist

and Civil Engineer, Chewang

Norphel has ‘built’ over 12 glaciers

by diverting melt-water through a

network of pipes into artificial lakes

in the shaded side of mountain

valleys. He is in the process of

building at least 5 more glaciers. A

dam or embankment is built to

retain water, which freezes at night

and remains frozen in the absence

of direct sunlight. At the start of

summer, the glacier melts and

releases water into the rivers below.

Norphel has also designed

instruction material to ensure that

his valuable knowledge would

survive him.

16

-.

Ph

oto

©A

nd

rée

Marie

Du

ssau

lt

Ch

he

wan

gN

orp

he

le

xp

lain

sh

ow

the

stream

from

ag

lacie

rw

illb

ed

ive

rted

into

the

shad

eb

yth

ech

an

ne

l.

Client Feedback

“..your study covers all that we

want quite comprehensively. We

acknowledge the speed and quality

of work which you have produced.”

Enr-on or off?

Renewable Energy for

Maharashtra

Verdurous was invited by

GREENPEACE International to

undertake an assessment of the

Renewable Energy potential in the

western Indian state of Maharashtra.

Resource availability, realizable

potential and commercial viability

were studied item-wise for each

technology option. The project

culminated in putting forth

plausible solutions for the power

crisis afflicting the state. The effort

was intended at pre-empting the

rejuvenation of the moth-balled

Dhabol Power Project originally put

up by the Enron Corporation.

18

Win

dfa

rmin

rura

lM

ah

ara

shtra

, Ind

ia. P

ictu

reco

urte

syR

ech

arg

eN

ew

slette

r, Re

ch

arg

eA

S, N

orw

ay.

Research Projects

Broad-basing ‘green’ stock

market indices: a concept note,

Int. J. Green Economics, Vol.2,

No.4, 2008.

True environmental performance of

an economy is indexed by the eco-

sensitivity of mainstream

businesses. Broad-basing green

stock-market indices could help

recognize and reward superior

environmental performance and

ensure adequate representation in

emerging markets with few ‘pure-

play enviro’ companies listed.

Verdurous has constructed a ‘green’

index for the Indian market and has

tracked it over the length of a

business cycle. Ambitious

extensions of the index are in the

works.

The Persistence of Green

Goodwill, forthcoming issues of

Environment, Development &

Sustainability, Springer BV

Verdurous has observed that

investor concern for the

environment differs across industry

sectors and the correlation between

environmental credentials and

valuation is, at best, weak and short-

lived. Periodic release of

environmental performance reports

by credible, independent agencies

would help investors take

cognizance of such information.

20

It istim

efo

rb

usin

esse

sto

focu

so

n“g

ree

ng

oo

dw

ill”

Research Projects

Food V. Fuel: Renewable Energy,

34 / 4, April 2009 (Official Journal

of the World Renewable Energy

Network)

The Environmental impacts of

biofuels are determined

substantially by the agricultural

practices during cultivation. In each

market, the pricing of liquid biofuels

– ethanol and biodiesel – is

determined by the administered

prices of gasoline (petrol) and diesel

they respectively seek to

supplement.

Verdurous has concluded that

relative pricing of agricultural

produce viz., oil-yielding seed could

be managed so as to ensure that

food-crop land is not encroached

upon in favor of fuel plantations.

Reciprocal monopoly, asymmetric

payoffs and exit options in the

Indian sugarcane cogeneration

sector:

Power generated from bagasse at a

sugar mill cannot prop up an

otherwise unviable sugar operation.

Verdurous has studied the incentive

structures faced by various

constituents of the value chain and

has observed that complementary

product pricing (“razor and blade

pricing”) cannot be applied to this

setting and that sugar cycles can be

eliminated by managing the relative

terms-of-trade of substitute crops.

22

Co

co

nu

tco

ir/

she

llsb

ein

gtra

nsp

orte

dfo

ru

seas

fue

l

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