The government, World Bank, and state-owned EESL inked a $220 million loan agreement and $80 million guarantee pact to push energy efficiency programme in India.
To be implemented by EESL, the programme will help scale up the deployment of energy saving measures in residential and public sectors, strengthen EESL’s institutional capacity, and enhance its access to commercial financing.
The $220 million loan, from the International Bank for Reconstruction and Development (IBRD) to Energy Efficiency Services Ltd, has a 5-year grace period, and a maturity of 19 years.
The investments under the programme are expected to avoid lifetime greenhouse gas emissions of 170 million tons of CO2 and contribute to avoiding an estimated 10 GW of additional generation capacity.
This would be over 50 percent of the National Mission for Enhanced Energy Efficiency target of 19.6 GW indicated in India’s Nationally Determined Contributions (NDCs) under the Paris Accord.
The key components of the operation include: creating sustainable markets for LED lights and energy efficient ceiling fans; facilitating well-structured and scalable investments in public street lighting; developing sustainable business models for emerging market segments such as super-efficient air conditioning and agricultural water pumping systems; and strengthening the institutional capacity of EESL.
Under the Program, EESL will deploy 219 million LED bulbs and tube lights, 5.8 million ceiling fans, and 7.2 million street lights, which will be supplied by private sector manufacturers and suppliers.
As an integral part of the operation, the first-ever IBRD guarantee in India will help the EESL access new markets for commercial financing in line with the Bank’s approach of maximizing finance for development. The guarantee is expected to leverage some $200 million in additional financing, to help EESL with its growing portfolio and future investment needs.