EESL plans change to clean energy firm

Best known for its LED lighting programme, Energy Efficiency Services (EESL), an entity under the power ministry, has seen its revenue increase 19-fold in two years. Said to be the only company in South Asia to only run energy efficiency schemes, EESL now seems set to rediscover itself as an end-to-end clean energy entity.

An investment plan is being readied of close to Rs 30,000 crore over the next three to four years — it is yet to be finalised. As it shifts gear, close to Rs 5,000 crore is being planned on solar energy solutions, especially for the agricultural sector. EESL would subsidise solar-run agri pumps and later move to a non-subsidy model as well, said officials.

Currently an experimental scheme, EESL would increase its investment in the green buildings segment to Rs 9,000 crore. It already has some projects to retrofit old buildings for making these environment-friendly and energy-efficient. "Under the new plan, the company would focus on both public sector and privately owned buildings. For instance, it is converting all offices of the Mahindra Group to green buildings," said a source.

The other move is for the municipality sector, wherein it will offer services for energy audit and replacement of water and energy meters. The investment planned is around Rs 2,500 crore. "In its new avatar," said Saurabh Kumar, managing director, "EESL would focus on last-mile energy efficiency. We would invest on efficient water and sewage pumps and in Smart Grids and Smart Meters. The base plan is the same — we invest in energy-efficient technology and get paid on the savings," he told Business Standard.

For its current programmes on LED disbursement to domestic consumers, energy-efficient fans and LED street lighting, the investment is likely to increase to Rs 10,000 crore.

For investment of this scale, EESL is looking at all financial options. It is aiming for an initial public offer of equity by the end of this financial year. Before that, it plans to raise $100 million (Rs 650 cr) through both dollar bonds and rupee-denominated ones in the UK market.

"We would look at the domestic bond market as well. At the same time, we have a sturdy line of credit from the World Bank, Asian Development Bank, KfW (of Germany) and others," said Kumar.

ADB and the World Bank would extend $500-million loans each to EESL, it appears.

EESL is the youngest corporate entity under the ministry of power, launched in 2010. Formed under the aegis of the Bureau of Energy Efficiency (BEE), it was conceived as a company to sell energy-efficient electric equipment. A key BEE executive, Saurabh Kumar, a former income tax officer, was put at the helm of affairs.

The company had an equity base of Rs 90 crore in 2010-11. The turnover in 2016-17 was Rs 1,227 crore. Its first claim to fame was in July 2014 when it completed a street lightning programme in four months in Puducherry. In November, it revamped urban lighting of Andhra Pradesh with LED streetlights in two months, after the HudHud cyclone caused havoc.

In January 2015, the government launched a Domestic Efficient Lighting Programme with LED distribution. Since then, EESL has expanded across the country. Total LED distribution had touched 240 million by last month.

The price has crashed by 90 per cent in a year to Rs 65 apiece, owing to reverse bidding and mass procurement. The power ministry pegs savings on power bills ar Rs 14.5 crore a day. The scheme has seen a name change to UJALA, with a real-time mobile app to track the progress.