Loan agreement between EESL and AFD
Finalization of the Loan agreement between EESL and AFD of a 50 million euros Credit Facility for energy efficiency in Indian municipalities
New Delhi, April 16th, 2015
During the recent visit of the Honorable Prime Minister to France, the French Development Agency (AFD), represented by Mr Pascal Pacaut, Asia Director, and the Government of India, represented by Mr Arun Kumar Singh, Indian Ambassador to France France, signed a Guarantee Agreement which covers a loan of 50 million euros to Energy Efficiency Services Limited (EESL) for the financing of Energy Efficiency investments in Indian municipalities. The signing took place in the Ministry of External Affairs in Paris. On the same day, AFD and EESL signed in New Delhi the loan agreement for this financing. The operational arrangements of this loan have been done during a meeting organized by EESL today, in the presence of officials from DEA, MOP, BEE and AFD.
A financing in favor of energy efficient investments in Indian municipalities
During international climate negotiations, the Indian government offered the prospect of reducing its emissions of Green Housing Gas by 20% to 25% (compared to 2005) per rupee of gross domestic product by 2020. In doing so, India aims to combine continued strong economic growth and international climate protection. To achieve this objective, in 2010 a comprehensive strategy was adopted for the first time, the "National Mission for Enhanced Energy Efficiency", to reduce the consumption of energy across the country – primarily in public infrastructure and public buildings, as well as in industry and agriculture. "Energy Efficiency Services Limited" (EESL), founded in 2010, aims at dismantling institutional barriers and implementing this national energy efficiency strategy.
AFD is providing a 50 million euros loan to EESL to establish its business and support investments which will allow energy savings by Indian municipalities, more specifically in the public lighting and buildings. A guarantee from the Government of India has also been granted for this financing.
This operation is deployed in accordance with the mandate of AFD in India, defined with the Indian authorities in 2008, which is focused on green and inclusive growth.
A public ESCO to support energy savings in Indian municipalities
Given the forecasted evolution of the demography and its economic development, energy demand shall double in India by 2035. Energy savings from Indian municipalities, allowed by energy efficiency investments, will contribute to reach the county’s energy security and energy access objectives. Being an Energy efficiency Services Company (ESCO), EESL will help them structure, finance and implement specific projects for enhanced energy efficiency.
This project confirms the willingness of the Government of India and France to strengthen their partnership in the clean energy sector.
Agence Française de Développement (AFD), a public financial institution that implements the policy defined by the French Government, works to combat poverty and promote sustainable development. AFD operates on four continents via a network of 71 offices and finances and supports projects that improve living conditions for populations, boost economic growth and protect the planet. In 2014, AFD earmarked EUR 8.1bn to finance projects in developing countries and for overseas France.
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