World Bank Approves $300 Mn to Scale Up India’s Energy Efficiency Program

The program will be implemented by the EESL, to help scale up the deployment of energy saving measures in residential as well as public sectors, strengthen EESL’s institutional capacity, and enhance its access to commercial financing.

The World Bank has approved a USD 220 million loan and an USD 80 million guarantee for the country’s energy efficiency scale-up program.

The program will be implemented by the Energy Efficiency Services Ltd (EESL), to help scale up the deployment of energy saving measures in residential as well as public sectors, strengthen EESL’s institutional capacity, and enhance its access to commercial financing.

India’s climate change commitments to reduce carbon intensity by 33-35 percent by 2030 from 2005 level will require a significant focus on energy efficiency improvements.

Moreover, 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% 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.

Further, 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.

Additionally, 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.

The India Energy Efficiency Scale-Up Program will help EESL expand UJALA’s deployment of efficient ceiling fans, LED street lights and LED tube lights, along with its already-successful LED bulbs procurement and distribution.

Meanwhile, the USD 220 million loan has a 5-year grace period, and a maturity of 19 years. On the other hand, the USD 80 million IBRD guarantee will partially cover re-payment risks to commercial lenders or investors, to enable EESL to raise funds for its program.