Government inks $300 million agreement with World Bank to scale-up Energy Efficiency Program
Union Government (Finance Ministry) has inked $220 million Loan Agreement with World Bank to scale-up Inida’s Energy Efficiency Program. It also signed $80 million guarantee agreement with World Bank.
The loan will be provided to EESL by World Bank through its lending arm International Bank for Reconstruction and Development (IBRD). It has maturity of 19 years and 5-year grace period. The $80 million IBRD guarantee will partially cover re-payment risks to commercial lenders or investors to enable EESL to raise funds for its program.
Energy Efficiency Program (EEP)
It will be implemented by Energy Efficiency Services Limited (EESL). It will help to scale-up deployment of energy saving measures in residential and public sectors, strengthen EESL’s institutional capacity and enhance its access to commercial financing. Under it, 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.
Key Components of Program
- Create sustainable markets for LED lights and energy efficient ceiling fans.
- Facilitate well-structured and scalable investments in public street lighting.
- Develop sustainable business models for emerging market segments such as super-efficient air conditioning and agricultural water pumping systems.
- Strengthen institutional capacity of EESL.
- Increase private sector participation in energy efficiency, including through private sector energy service companies.
Significance
The World Bank investments under this program are expected to avoid lifetime greenhouse gas emissions of 170 million tons of CO2. It will also contribute to avoiding an estimated 10 GW of additional generation capacity. This will help to achieve 50% of National Mission for Enhanced Energy Efficiency target of 19.6 GW indicated in India’s Nationally Determined Contributions (NDCs) under 2015 Paris Agreement (India has committed to reduce carbon emissions by 33-35% by 2030 under NDC). Thus, help India to move further towards a more resource-efficient growth path. It will help tackle financing, awareness, technical and capacity barriers faced by new energy efficiency programs and also support Unnat Jyoti by Affordable LEDs for All (UJALA) program of Central Government.
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Month: Current Affairs - August, 2018