World Bank, Govt and EESL, sign $300 million pact to boost energy efficiency programme
August 28, 2018, the World Bank, EESL and the Union Government signed an agreement for the India Energy Efficiency scale-up programme, with a $220 million loan agreement and an $80 million guarantee.
Energy Efficiency Services Limited (EESL) will implement the programme and will help escalate deploying the measures for saving energy in the public as well as residential sectors. The programme will give EESL’s the access to commercial financing and will fortify its institutional capacity.
Director of World Bank India, Hisham Abdo and Joint Secretary in the Department of Economic Affairs, Ministry of Finance Sameer Kumar Khare signed the agreements.
- The programmer will mostly solve the problems of finance, technical and capacity hurdles and lack of awareness faced by the country’s energy efficiency programmes and will help strengthen UJALA programme launched by the Union Government
- It will bring a change in the pattern of participation of organizations in energy saving campaigns and will welcome the active contribution of private energy service companies
- Abiding to the norms of this programme EESL will install 219 million tube lights and LED bulbs, energy efficient ceiling fans of 5.8 million and streetlights of 7.2 million. And all these products will be sourced from private manufacturers and suppliers.
- The programs will use a large sum of the investment to evade 170 million tons of CO2 greenhouse gas emission and will avoid an projected 10 GW of extra generation capacity.
- The programme alone will increase the energy saving efficiency up to 50% of the India’s target of 19.6 GW, which was specified in India’s Nationally Determined Contributions (NDCs) under the Paris Accord.
The $220 million loan agreement with EESL by the World Bank will have a 19 years of maturity period and a grace period of 5 years.
The further investment of $80 million will moderately secure the risk of re-payment to investors or commercial lenders to help EESL raise funds effectively for its programme.
With the financial guarantee, EESL will be able to enter the unexplored markets for large scale commercial financing coordinated with the approach of maximizing finance for development by the World Bank.
To assist EESL with its rising future investment requirements and portfolio, the pact will leverage anmd additional $200 million in additional financing.
From the several steps taken by the Union Government to reduce carbon intensity by 33-35 per cent by 2030 to fulfill the climate change commitments, this energy efficiency program will play a major roll.
The pact will help the country to move forward to a resource-rich energy path and will meet the NDC commitments.
Important Modules of the Process
- Generating viable market for energy efficient LED bulbs and ceiling fans.
- Expediting appropriate and aptly structured investment program for street lighting.
- Creating reliable business models for booming market parts such as energy saving air conditioning and pumping systems for agricultural lands.
- Consolidating the institutional volume of EESL.