The Asian Development Bank (ADB) said it has approved a loan of USD 250 million (about Rs 1,775 crore) as part of an assistance package to EESL to expand energy efficiency investments in India.
The new ADB project is a sector loan guaranteed by the Government of India, allowing for undertaking of sub-projects with high readiness and inclusion of newer sub-projects as they are developed, the multilateral agency said.
Activities to be undertaken by the Energy Efficiency Services Limited (EESL) in eligible states include energy efficiency opportunities not targeted by traditional energy service company investments, such as smart meters, distributed solar photovoltaic systems, and e-vehicles.
EESL was established in 2009 as a joint venture of four public sector undertakings of the Ministry of Power to pursue large-scale energy efficiency investments, providing a comprehensive package of project design, implementation, monitoring, and investment.
The total cost of the project is USD 592 million, of which the Clean Technology Fund will provide USD 46 million to be administered by ADB, and the EESL will contribute USD 296 million.
Accompanying the loan will be a technical assistance (TA) of USD 2 million to support EESL in implementing the project, due for completion in March 2025.
The project will adopt proven energy efficient technologies to reduce electricity network losses and reduce greenhouse gas emissions, ADB Principal Energy Specialist Jiwan Acharya said.
"India's energy efficiency potential is largely untapped - amounting to possible energy savings of about 17 per cent of the country's total power generated in financial year 2019," the official said.
The multilateral lending agency said India has seen strong economic expansion over the last decade-and-a-half, a period in which carbon dioxide emissions from fuel combustion have outpaced economic growth, reaching more than 2 billion tonnes in 2016, compared to 890,000 tonnes in 2000.
The country is still largely dependent on fossil fuels, particularly coal power, it added.