MoU Between BEE and PTC

Bureau of Energy Efficiency, BEE and PTC India Ltd. (formerly known as Power Trading Corporation of India Ltd.) today signed a Memorandum of Understanding which intends to leverage the financial and technical strength of PTC and also provide financial support to carry out the contract audit. The MoU provides a framework for partnership between BEE and PTC for implementing programmes by provision of technical expertise in the form of energy audits and finance by PTC, without any financial burden on BEE. The MoU will also establish the Energy Efficiency Financing Platform (EEFP) that seeks to overcome barriers of financing by sharing of risks, capacity upgradation of financial institutions, etc. Under the MoU, PTC will undertake energy efficiency projects on performance contracting model to demonstrate its effectiveness as a viable business model. PTC will leverage its technical and financial strength to undertake these projects in various sectors like Government buildings, commercial buildings, hospitals, municipalities, agriculture, etc.

The MoU was signed by Dr Ajay Mathur, DG, BEE and Shri Tantra Narayan Thakur, CMD, PTC, in the presence of Shri. Anil Razdan, Secretary, Ministry of Power in New Delhi.

The objective of EEFP is to create a mechanism to mainstream financing of energy efficiency projects. EEFP will provide the necessary instruments like aggregated energy efficiency projects, bankable DPRs and other risk mitigation measures to enhance the comfort for tenders. It would also help in sharing of best practices and experience learning, particularly about the performance contracting model. EEFP is being positioned as a platform to overcome barriers that have stunted financing to the energy efficiency projects. BEE will facilitate, apart from providing overall guidance, bankable projects in areas like energy efficiency improvements in commercial buildings, municipalities, Small and Medium Enterprises (SMEs), agriculture, etc. The overall energy efficiency investment market size under ESCO system of performance contract in India has been estimated by the ADB Study project team at Rs 140 bn (Rs. 14000 crores)

BEE is also encouraging Energy Service Companies (ESCOs) to facilitate implementation of energy efficiency projects. This is being done by creation of mechanisms that would help finance demand side management programmes in all sectors by capturing future energy savings. This is a thrust area identified in the National Action Plan on Climate Change released by the Hon’ble Prime Minister on 30th June, 2008.

In order to improve credibility of ESCOs, BEE is undertaking accreditation by assessing their market delivery capabilities. Such assessment will be carried out by independent third party agencies like CRISIL and ICRA.

Source: Press Information Bureau
Date: July 09, 2008