Energy Saving Street Light Projects on PPP Basis

1. Energy Saving Street Light Projects
on PPP Basis

2. Project
Objectives
Reduce Carbon Emission
Rationalize and Reduction of the
Power Consumption – Cost savings
Better O&M – Street lights and
ancillary assets
Better Visibility – Improved safety
for citizens

3. Business
Models
EPC Model – ULBs with strong financial
Annuity Model – Germany
PFI Credit (Capital Grant) Model – United Kingdom
ESCO Model – Payment through savings
EESL (India) Model – Similar to ESCO model
Lease-to-own Model – Mexico
Joint Procurement Delivery Model – Canada

4. ESCO – The Preferred Option
Smaller ULBs – May
not have financial
strength to fund
Project through its
own balance sheet
1
Smaller ULBs – May
not have O&M
expertise
2
Expected Energy
Savings – Should be
able to fund
project’s lifecycle
cost
3
Expected Positive
Cashflow – To be
utilised for funding
of other required
infrastructure
4

5. Project Structure
Authority
ESCO SPV
Escrow Account
Transfer of total
Energy Cost
% share of
Energy Savings
% share of
Energy Savings
Any other Revenue
like sale of Carbon Credits
Project
Funding
Debt/ Equity
DISCOM
Monthly
ElectricityPayment
Street Light
System
Retrofit and
O&M
Independent
Engineer
Periodic Reporting
and Monitoring
Periodic Reporting
to Authority
State Government
Support
Project
Agreement
If required

6. Key
Project
Determinants
Baseline survey – Important to establish
baseline energy consumption
Street Light Design – Under/Over Design
Issues
Power Theft – Reduced savings,
jeopardising project viability
Payment Security – Prudent and timely
transfer of the energy savings
State government support – If Required

7. Thank You
Setu Divekar
setu.divekar@wellspringadvisory.com
+91 88791 19359
Wellspring Advisory Services LLP
www.wellspringadvisory.com