Four power PSUs to establish energy efficiency company

Soon, there will be an energy efficiency company — the first of its kind — under the aegis of the Union government. Called the Energy Efficiency Service Ltd (EESL), the company will have equity participation from four government power companies — NTPC, PowerGrid Corporation, Power Finance Corporation and Rural Electrification Corporation.

Sources said the company was likely to be incorporated with the four government companies holding equity in proportion to their profits, implying that the bigger the profit size, the larger their holding. The combined holding is likely to be in the range of Rs 325 crore. “The ministry of power has asked the four partners to finalise the business plan for the new entity by July 15,” said an official.

The company would function as the implementation arm of the National Mission for Enhanced Energy Efficiency (NMEEE). The ministry of power would be approaching the Union Cabinet to get a clearance for the mission. Though EESL has been conceptualized by the Bureau of Energy Efficiency (BEE) that works under the ministry of power, it will have no link with the bureau that acts as the monitoring agency and policy body for energy efficiency programmes of the government.

“The purpose of setting up a separate corporate entity is to develop an energy efficiency market that is virtually nonexistent in the country,” said the official. It has been envisaged that the business profile of the new company may require a total investment of Rs 644 crore over a five-year period. The initial programme would include taking up energy efficiency planning and appliances in buildings and industrial sites, implementing Bachat Lamp Yojana (a scheme for promotion of low power consuming CFL lamps) and consultancy. This would necessitate taking debt of about Rs 320 crore.

Officials said PFC had initially shown reluctance to be part of the company through equity, since it would have restricted capability to finance its debt, but the ministry had overruled its reservations.