ADB Grants $250 Million Loan to Expand Energy Efficiency Investments in India
The Asian Development Bank (ADB) and the Government of India on 16th December 2019 signed a $250 million loan to Energy Efficiency Services Limited (EESL) to expand energy efficiency investments in India that will benefit agricultural, residential and institutional consumers. In addition, $46 million financing will be provided from the Clean Technology Fund (CTF), to be administered by ADB.
ADB previously approved a $200 million loan to EESL, a public sector energy service company, in 2016 for Demand Side Energy Efficiency Sector Project that focused on efficient lighting and appliances.
The signatories to the loan agreement were Shri Sameer Kumar Khare, Additional Secretary (Fund Bank and ADB), Department of Economic Affairs in India’s Ministry of Finance, and Mr Kenichi Yokoyama, Country Director of ADB’s India Resident Mission, signed the agreement for EESL.
Shri Khare said after the loan signing that the project is expected to contribute to the mission of Government of India to promote energy efficiency and meet Government’s commitments to reduce energy intensity of the economy. Further elaborating on the issue, he said, introduction of energy-efficient technologies in eligible states including smart meters, distributed solar photovoltaic systems and electric vehicles will help reduce electricity network losses and reduce greenhouse gas emissions.
Talking about the deal, Mr Yokoyama said that this is one of the few ADB projects specially focused on demand-side energy efficiency targeting upstream efficiency opportunities and business models that can be scaled up in India and other ADB developing member countries. The project’s smart metering component will help address billing and collection inefficiencies.
EESL will also explore business models to generate greater public demand for e-vehicles to support India’s current push for electric vehicles.
Promoting awareness of the benefits of using energy efficient technologies is another feature of the project. Awareness campaigns will engage local organisations in knowledge-sharing and training, with a focus on women electricity consumers. Capacity building for electricity distribution, regulatory agencies, and other government bodies will also be carried out.
Accompanying the loan will be a technical assistance (TA) of $2 million to support EESL in implementing the project, including a gender action plan, mobilising private sector participation in energy efficiency services, identifying new business opportunities, and transferring knowledge about successful models.
The TA will also support the identification and development of new subprojects and pilot test some technologies. The grant comes from the Clean Technology Fund, to be administered by ADB.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty.
In 2018, it made commitments of new loans and grants amounting to $21.6 billion.
Established in 1966, it is owned by 68 members — 49 from the region.