The Energy Efficiency Services Limited (EESL) and the Global Environment Facility (GEF) have partnered to launch a $454 million project called the “Creating and Sustaining Markets for Energy Efficiency” with a target of mitigating 60 million tons of CO2 equivalent and enabling total direct energy savings of 38.3 million GJ (1 GJ = 277.778 kWh) by 2022 and 137.5 million GJ by 2032.

The project will receive a composite funding of $454 million comprised of the GEF grant of $20 million and co-financing of $434 million in the form of loans and equity, including a $200 million loan from the Asian Development Bank (ADB), according to a government release.

The EESL has also proposed forming the Energy Efficiency Revolving Fund (EERF) for sustainable funding mechanism of energy efficiency projects in the country as part of the project, according to the government release.

The EERF mechanism will support the ‘proof of concept’ investments for the new technologies of super-efficient ceiling fans, tri-generation technologies & smart grid-applications and ultimately scaling up energy efficiency financing and program development to help cover initial investment costs of identified energy efficiency programs like street lighting, domestic lighting, five-star rated ceiling fans and agricultural pumps, in the country. This unique model will help in addressing the upfront risks of new technologies. Further, the accrued savings from these technologies can then be used to finance additional projects, which will allow capital to revolve as a sustainable funding mechanism.

The overall size of energy efficiency market in India is estimated to be $23 billion. Initiatives like these seek to tap that market by implementing an innovative business model that is scalable, flexible, embraces different and emerging technologies and has incentives for all stakeholders, said Anil Kumar Jain, Additional Secretary Ministry of Environment, Forests, and Climate Change.

With the strong leadership of EESL and the Government of India, the penetration of these clean energy technologies will help India leapfrog to a more sustainable future while helping reduce local and global emissions, said Naoko Ishii, Chairperson and CEO, GEF.

ADB will partner with EESL to implement energy efficiency projects in India to facilitate sustainable growth by addressing climate change issues, boosting the economy and generating greater employment in the country, said Kenichi Yokoyama, Country Director of India Resident Mission of ADB.

Geordie Codville of the UN Environment said that the project is aimed at scaling up energy efficiency efforts to achieve India’s Intended Nationally Determined Contribution (INDC) goals and ultimately the UN Sustainable Development Goals (SDGs).

The United Nations (UN) Environment’s ‘District Energy in Cities’ Initiative has identified $600 million of energy efficiency projects across five cities in India.

This is not the first time, the GEF has ventured into clean energy and efficiency projects in India. The GEF in partnership with United Nations Industrial Development Organization (UNIDO) and Ministry of New and Renewable Energy (MNRE), India, set up the GEF-UNIDO-MNRE program to help remove barriers associated with concentrated solar thermal (CST), its awareness, capacity building, market, and financial barriers through innovative technical and financial support.

The EESL is at the forefront of government’s plans to reduce carbon emissions and increase energy efficiency. Recently, the EESL tendered 10,000 electric vehicles (EVs) for the government. It also issued tender to procure 5,000,000 smart meters to be installed in Uttar Pradesh and Haryana.