India, World Bank sign $300 million agreement to scale up India’s energy efficiency program

The Program, to be implemented by EESL, 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 investments under the Program 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 Program will help tackle the financing, awareness, technical and capacity barriers faced by new energy efficiency programs and support the UJALA and SLNP programs of the Government of India,” said Sameer Kumar Khare, Joint Secretary, Department of Economic Affairs, Ministry of Finance. 

“This is one of the several steps being taken by the Government of India to meet its climate change commitments to reduce carbon intensity by 33-35 percent by 2030,” he added.

The agreements for the Project was signed by Sameer Kumar Khare, Joint Secretary, Department of Economic Affairs, Ministry of Finance, on behalf of the Government of India; S Gopal, Chief General Manager (Finance) EESL on behalf of EESL, and Hisham Abdo, Acting Country Director, World Bank India, on behalf of the World Bank.

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. Moreover, the Program will help to increase private sector participation in energy efficiency, including through private sector energy service companies.

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.

Commenting on the agreement, Saurabh Kumar, Managing Director, Energy Efficiency Services Limited said: “We are delighted to receive financing for the India Energy Efficiency Scale-up Program. EESL has already achieved measurable progress in initiating the transformation of India’s energy efficiency landscape with our globally-renowned UJALA and LED street lighting programs, but a lot more can, and needs to be, done in order to enable India to achieve its development and climate change objectives."

"This program provides us a valuable opportunity to build upon our past efforts while providing necessary impetus for replicating and magnifying our success across India with other energy efficiency technologies and programs, and with other ESCOs and stakeholders across the spectrum,” said he.

As an integral part of the operation, the first-ever IBRD guarantee in India will help 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.

“This energy efficiency Program for Results will help India meet its NDC commitments and move further towards a more resource-efficient growth path,” said Hisham Abdo, Acting World Bank Country Director in India.

“The additional guarantee from the World Bank will support EESL to access new sources of commercial funding, diversify its investor base, and establish a track record for future access to financial markets,” he added.