Multilateral lending agency Asian Development Bank (ADB) today said it will extend a USD 200 million loan to India for installation of energy-efficient home and street lights, and water pumps. The entire exercise could save energy to the tune of 3,800 gigawatt-hours per year.
“Energy efficiency is by far the least costly option to ensure or expand energy access while still cutting deadly greenhouse gas emissions and other pollutants,” ADB said in a statement, quoting Director General of ADB’s South Asia Regional Department, Hun Kim.
“With India one of the world’s largest and fastest-growing economies, getting the country firmly on a path of low-carbon growth will have an impact not only at home but for the rest of the world too,” Kim added.
The statement said ADB will provide the funds to Energy Efficiency Services Ltd (EESL), a joint venture between four public sector bodies – the National Thermal Power Corporation, Powergrid Corporation of India, Power Finance Corporation, and Rural Electrification Corporation – established in 2009.
“EESL will use the ADB funds, alongside another USD 200 million of its own, to finance energy service activities, which often have trouble accessing commercial finance for energy-saving projects,” it added.
EESL will make loans available for installing light-emitting diode (LED) municipal streetlights, energy-efficient domestic lights and fans, and energy-efficient agriculture water pumps.
The entire USD 400 million project will install 1.5 million LED street lamps, 42 million LED household lamps, ceiling fans and LED tube lights, and 225,000 new pumps. Lending will be made available in Andhra Pradesh, Goa, Karnataka, Maharashtra, Rajasthan, Telangana, and Uttar Pradesh, as well as other states going forward, the statement said.
The Manila headquartered agency said it hopes the success of these sub-projects will attract more investment into energy efficiency.
“EESL has an ambitious longer-term target of installing 4.5 million streetlights, 700 million LED bulbs, and 6 million energy-efficient pumps by 2020 that would require investment of more than USD 12 billion,” ADB noted.
Under the recently agreed Paris climate agreement, India has committed to cutting the energy intensity of its economy by 33 per cent from 2005 levels by 2030.
A recent ADB study estimated that achieving an intermediate reduction of at least 20 per cent by 2020 would require investing about USD 68 billion in energy efficiency measures in India alone.
The statement said the Indian government’s National Mission for Enhanced Energy Efficiency has already launched several initiatives to enhance energy saving in energy intensive businesses and hopes to unlock the market for energy efficiency projects that is estimated at more than USD 11 billion, or Rs 740 billion.
Using more LED lights and fans in homes and institutions will mean energy savings of 80 per cent, LED streetlights bring savings of 50 per cent, and efficient water pumps will save 30 per cent of energy, it said.
The multilateral agency said it is also committed to doubling its annual financing for climate change mitigation and adaptation in the region to USD 6 billion by 2020.