The primary objective of the Global Environment Facility programme (GEF) is to reduce greenhouse gas (GHG) emissions and address global environment issues. With EESL’s successful deployment of large-scale energy efficiency programmes like UJALA, GEF will be funding our programmes to scale up our energy efficiency programs and new technology applications.

The period of funding - GEF 6 - will provide financing support of $454 million to EESL from various multilateral and bilateral agencies. The Asian Development Bank (ADB) and the United Nations Environment Programme (UNEP) will be the implementing agencies for the GEF Project. This funding will be channelized to mitigate 750 million tons of CO2 through EESL-executed programs.

This project aims to further support and create enabling conditions for EESL’s growth strategy, targeting $300 million investments across seven technologies, i.e. Street Lighting; Domestic Lighting; BEE 5 Star Ceiling Fans; Agricultural Pumps; Super- Efficient Ceiling Fans; Tri-Generation; and Smart Grids and Meters.

The project aims to achieve its targets through both investment and technical assistance by:

  • 1. Expanding and Sustaining investments in existing market sectors: Support certain portion of EESL’s existing target for installation of Street Lighting, Domestic Lighting, 5-star ceiling fan & Agricultural pumps
  • 2. Building Market Diversification: Development & implementation of new ESCO business models through installation of new technologies of super-efficient ceiling fans, tri-generation technologies & smart-grid applications
  • 3. Replication & Scaling Up: Developing a long-term growth strategy based on collected lessons, experiences etc. from the components
Energy Efficiency Revolving Fund (EERF)

As a part of continued support for the cause of energy efficiency, an Energy Efficiency Revolving Fund (EERF) is proposed to be established with the initial corpus of $13 million from ADB (as part of the GEF Trust Fund). During the project, the EERF shall be used for supporting the three new technologies of super-efficient ceiling fans, tri-generation technologies, and smart grid-applications.

The main objective of this fund is to scale up energy efficiency financing and programme development to help cover the initial investment cost of identified Energy Efficiency projects in India. The GEF Grant and technical assistance resources will help address some of the upfront risks in such investments. All profits generated by EESL after loan repayments will be reinvested in their Energy Savings business through the EERF, which in turn would be able to create sustainable funding mechanism for energy efficiency investments.

GEF-5 (Global Environment Facility-5)


PromotingMarket Transformation for Energy Efficiency in Micro, Small & MediumEnterprises

The GEF-5 project focuses on improving energy efficiency in the MSMEindustrial sector of India via continued capacity building, informationdissemination, and establishment of standard operating procedures forimplementing energy efficiency (EE) investment projects. Due to the evolvingneeds of the market, the Indian Government and UNIDO have decided that it willbe more beneficial to the sector to change the focus of support mechanisms forenergy efficiency in the MSME industry in order to stimulate longer-termsustainable change in market mechanisms and behaviour.

To be more precise, the overall project objective is to promote theimplementation of energy efficiency in the MSME sector; to create and sustain arevolving fund mechanism to ensure replication of energy efficiency measures inthe sector; and to address the identified barriers for scaling-up energyefficiency measures and consequently promote a cleaner and more competitiveMSME industry in India. Here, GEF being the funding agency has partnered withUNIDO as implementing body, Ministry of MSME as leading executing agency andEESL as the main Executing partner, in order to achieve the desired objectivein a time span of 36 months. Total cost reserved for this project is 31.3million USD.

The proposed project has 3 substantive components:

  • Component 1: Programme to identify energy intensive clusters and replicable technologies.
  • Component 2: Demonstration projects and aggregation of demand for demonstrated technologies in the clusters; and
  • Component 3: Financing models to support replication of energy efficiency projects in MSMEs.

Incomponent 1, a total of 10 energy intensive clusters have already beenidentified based on the mentioned objective criteria. The list of the clustersshortlisted include- Jodhpur-Limestone, Varanasi-Brick Kiln,  Vapi-Chemical & Dyes, Surat- Textile,Morbi-Ceramic, Vellore-Rice Mill, Jorhat-Tea, Odisha-Sponge Iron, andBatala/Jalandhar/ Ludhiana-Casting & Forging and Pali Textile cluster.Also, 33 technologies have been singled out that have maximum impact on thecluster as a whole.

Forcomponent 2, the project will short-list 100 LSPs and unit level technicalpersonnel in installation, operations and maintenance of the technologiesdemonstrated. This will be done through cluster level workshops on thetechnologies being demonstrated and a LSP coordination mechanism shall beestablished through the PMU. Furthermore, a peer to peer network will beestablished to analyze and validate the energy savings information from thedemonstration projects. This network will include local technology experts,LSPs, representatives of MSME Associations at the cluster level, etc. This willnot only enhance the credibility of the results, but also foster informationexchange amongst industrial enterprises and encourage new enterprises. The networkwill be an interactive platform managed by the EESL PMU engaged experts.Results from the project demonstrations will be developed into case studies andshared through the established network. The network will also be used to enlistMSME units for replication and scaling up activities. What’s more- MSME units will be shortlisted to implementtechnology demonstration of the identified technologies. The units will beselected based on their availability and willingness to share technicaland commercial data, provide access to other units for technologiesimplemented, etc. The demonstration will include customization of thetechnologies to suit the requirements of the units. The demonstration oftechnology shall involve replacing the energy inefficient systems with the mostenergy efficient system. Following the demonstration activities, EESL willaggregate the demand with a target to reach out to about 400 units in theclusters where implementation of technical proposals is possible. Theinvestments in these units will be done by EESL through its own funds (equityfrom its own sources) or commercial loans from SIDBI and/or other banks, or byan ESCO which will be arranged/facilitated by EESL with financial assistancefrom schemes of the Ministry of MSME.

In the final component i.e. 3, sustainable and effective financing mechanismswill be established to support the replication of Energy Efficiency projects inMSMEs. In order to achieve this objective, officials from government agencies(Ministry of MSME, MOEF, MOP, etc.) and private banks/financial institutionswill be sensitized on promoting EE equipment and trained on evaluating andinvesting in industrial EE projects. And, to ensure that the replication of theEE projects in the MSME sector continues beyond the GEF project, a RevolvingFund will be set up to sustain the activity. The EESL MSME Revolving Fund(EMRF) will be seeded with the GEF grant, to be disbursed to industrial MSMEUnits and will be accredited by a portion of the returns that EESL will receivefrom implementing the project. The objective of this model will be to reducethe transaction costs of MSME units, to be undertaken by the SMEIP-E; for this,financial arrangements with FIs/banks will be worked out by EESL. The modelswill work on the principle of “Pay-As-You-Save” (PAYS) where regular paymentsto EESL/ESCO will be done by the units after installation of the technology.

Presently, 7 Baseline Surveys , 5 videographic studies have be conductedin the shortlisted clusters. The sole purpose of these studies was to capturethe present scenario and the pulse of the industry for the upcoming project. Inaddition to this, 5 insightful workshops have been conducted in Surat, Vapi,Jodhpur, Odisha and Ludhiana clusters to generate maximum awareness among the targetgroup of beneficiaries.

This project will prove to be a boon for the MSME units who have beenwaiting long to switch over the Energy Efficient alternatives.

Download GEF-5 Project Brochure