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Government-owned leading energy efficiency solutions company Energy Efficiency Services Limited (EESL) is looking to set up a one-stop marketplace to provide all energy-efficiency solutions, products, and government schemes executed by the company.
Referring to it as an “Amazon meets Urban Company” model, EESL Chief Executive Officer Vishal Kapoor told Business Standard that the marketplace would have standardised agreements for both products and services, which would help scale up the energy-efficiency market.
This would be a first-of-its-kind marketplace, which Kapoor said would be completely information technology-integrated and allow mega-scale projects to get fast-track approval.
“It will be a combination of Amazon, IndiaMART for products, and an Urban Company model of service delivery. It will encompass everything we do on one portal. And these products and services will be provided through the same standardised agreements that we already use,” said Kapoor. He spoke with the paper on the sidelines of the Clean Energy Ministerial in Goa this month.
He said a basic marketplace would be in place in the next three months.
“We will keep on developing it. What we are aiming for is that even project deliveries will happen digitally. Any kind of project appraisal will also happen digitally, for both the entity and the project,” said Kapoor.
Entity appraisal will include their goods and services tax performance, application programming interface-based integration, and self-appraisal of the firm, which will all be integrated on the portal. The marketplace will follow an automated process integrated through systems, applications, and products in data processing (SAP). It will integrate vendor payments, finance, and everything involved in the product or service delivery supply chain.
EESL runs some of the largest energy-efficiency programmes such as the centrally-sponsored Unnat Jyoti by Affordable LEDs for All (UJALA) for light-emitting diode lights, Street Lighting National Programme with several state governments, smart metering projects, and electric mobility in public transport (e-buses).
“There needs to be a binding factor. We have done all these projects through aggregation, but there are other factors. Even bundling of finance is very important. The only thing we can do at scale is that the delivery mechanism has to be very stringent,” said Kapoor.
He said that currently, the transaction cost for scaling up energy-efficiency projects is huge.
“For instance, there is a Rs 100 crore pipeline in the micro, small and medium enterprise space with close to 600 projects. We are trying to bind them through a common stream of finance for five years. I will have to go and sign 600 agreements. This is probably not feasible,” said Kapoor, adding that the transaction cost can only come down through an energy-efficiency marketplace and would apply not just to selling products but also services.
He said that if most energy-efficiency projects are standardised, a green finance channel can be created for it.
“The idea is to deliver projects with standardised terms. It is the only way to scale up. The money will be ours to say begin with, but will also facilitate private funding. It is only a question of where this finance will come from. We will enable this energy-efficient marketplace, private debt funds, and own investments," he said.
Since its inception, EESL has been running various projects for sale of energy-efficient equipment such as lights, fans, refrigerators, air conditioners, etc. It recently ventured into super-efficient fans and plans to start a cold-chain vertical soon, said Kapoor, adding all these would also be subsumed into the marketplace.
