How it works

HOW IT WORKS?

 

The DREEM tool conducts a holistic evaluation of any DRE enterprise in India, based on the key parameters evaluated by most financial institutions for disbursing finance. It aims to provide a systematic approach for financial institutions to evaluate DRE enterprises considering the existing limitations.

 

Three pillars/ dimensions are set forth by the DREEM tool for enterprise evaluation. These relate to risks pertaining to the - external environment, DRE space and enterprise business and financial performance. Each of these dimensions consists of parameters which are built as risk/ attractiveness scores to assess the level of risk posed by an enterprise.

 

1. External environment - External factors provide a view of the risks outside the control of an enterprise but with the potential of affecting business operations. The DREEM tool assesses the following parameters to evaluate the external environment:

 

   -- Political risks associated with a specific state, such as regulatory policies and risk of doing business, to assess the overall political suitability as well as stability of a state for an

      off-grid business

   -- Target market/ socio-economic factors to evaluate the risk associated with target customer segments in specific geographies, including  disposable incomes spent on lighting

   -- Geographic risks associated with each state, comprising damage caused by natural disasters, given topographical location of business

 

2. DRE sector - The DRE sector-related factors assess performance of the industry and the individual solutions. The sectoral parameters in the tool evaluate attractiveness of the DRE sector against other industries in India and also compares the performance of various renewable energy sources and off-grid solutions against each other by assigning risk ratings to each.

 

   -- Growth potential of the sector is evaluated by comparing the DRE sector against other industry segments

   -- Potential for the different renewable resources - solar, wind, hydro, biomass - is estimated to assess cost effectiveness of each

   -- Enterprise solutions/ offerings are evaluated to assess the competition and repayment risk associated with each solution

 

3. Enterprise Performance - The enterprise performance assessment is linked to benchmarking against industry performance numbers. The tool ealuates the enterprise growth over the last three years and compares the three-year averages with relevant industry ratios to assess how profitably the enterprise is growing; and whether the growth trend is upwards or downwards as compared to the overall industry performance.

Please refer the link to user manual & handbook "DREEM User Manual and Enterprise Monitoring Handbook"

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