Revolving fund for energy efficiency launched; five cities to benefit

Major portion of GEF financing would come from Asian Development Bank; 5 cities to get global help for cooling, heating systems

Global Environment Facility (GEF), with Energy Efficiency Services (EESL), have launched a revolving fund for three efficiency areas. 

EESL, under the ministry of power, is a joint venture of four state sector undertakings. Washington-based GEF would also be funding EESL’s district energy initiative in Bhopal, Pune, Coimbatore, Thane, and Rajkot.

The major portion of GEF’s financing, $200 million, for the revolving fund would come from Asian Development Bank (ADB). It would get $454 million, comprising the GEF grant of $20 million and co-financing of $434 million in the form of loans and equity, including the ADB loan.

Naoko Ishii, chairperson and chief executive of GEF, told Business Standard the fund would be based on an innovative model, under which savings from the efficiency programmes are to be ploughed back, for scaling up energy efficiency efforts to achieve the country’s commitments under the climate change pact, termed INDCs (intended nationally determined contributions). 

The GEF-6 fund, launched on Wednesday, would support two projects — ‘Creating Markets for Energy Efficiency’ and ‘District Energy in Cities’. 

An Energy Efficiency Revolving Fund (EERF) will boost four of EESL’s existing technologies. These involve street lighting, domestic lighting, five-star rated ceiling fans and agricultural pumps, said Bhawanjeet Singh, chief general manager (technical) at EESL. The funding will also help EESL promote three new technologies, on 'super-efficient’ ceiling fans, tri-generation and smart grids/meters. 

Through GEF, many technical and financing partners, including United Nations Environment Programme (UNEP), ADB and Kreditanstalt für Wiederaufbau would come together. 

According to David E Rodgers, senior climate change specialist, GEF, a significant portion of the funding would be in technical assistance and advisory services. “GEF is the grant making organisation and a portion of the resources will be flexible. This allows the government of India to direct resources where they are more catalytic,” he said.

EESL’s district cooling systems aims to reduce energy demand for cooling by up to 50 per cent. EESL has partnered with UNEP's District Energy in Cities Initiative, which has identified $600 million of projects across five cities in India.

GEF has 183 countries, global institutions, civic organisations and the private sector. 

The EERF mechanism will help cover the initial investment cost of energy efficiency programmes. Savings from these technologies can be used to finance additional projects.   

According to the World Resources Institute, this country accounted for about 6.7 per cent of global carbon emissions in 2012. The energy sector accounts for 71 per cent of the country’s greenhouse gas emissions, mainly carbon dioxide. Energy efficiency programmes are aimed at reducing this. The energy efficiency market in India is estimated to be $22.8 billion.