The government, World Bank and state owned EESL today inked a $220 million loan agreement and a $80 million guarantee pact to push energy efficiency programme in India.
The Program, to be implemented by the Energy Efficiency Services Limited (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 Agreement for the Project was signed by Mr. Sameer Kumar Khare, Joint Secretary, Department of Economic Affairs, Ministry of Finance, on behalf of the Government of India and Mr. Hisham Abdo, Acting Country Director, World Bank India, on behalf of the World Bank.
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.
Speaking on the occasion, Mr. Sameer Kumar Khare, Joint Secretary, Department of Economic Affairs, Ministry of Finance said that the Program will help tackle the financing, awareness, technical and capacity barriers faced by new energy efficiency programs and support the UJALA program of the Government of India. He said that 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.
The $220 million loan, from the International Bank for Reconstruction and Development (IBRD) to EESL, has a 5-year grace period, and a maturity of 19 years. 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.
