eesl: Non-payment by states, local authorities put EESL in difficulty

Energy Efficiency Services (EESL), India’s state-run clean energy company, is facing financial difficulties due to non-payment of claims by city local bodies and states. This prevents EESL from paying its suppliers on time and from continuing its operations. The Ministry of Energy is looking into the matter with the States. EESL is a joint venture – and Power Grid Corp has a major stake, followed by Power Finance Corp and .

In the last two Covid-hit years, the company’s receivables from local bodies for the implementation of the streetlights reached nearly ₹3,500 crore, almost double the company’s ₹1,670 crore income. financial year 21. Its income for the nine months ending December 2021 was ₹1,123 crore. Fourth quarter and fiscal year 2021-22 figures have yet to be released.

“It wasn’t that there wasn’t outstanding earlier, but the Covid lockdowns made it worse. It impacted our ability to pay our partners. There was a drag on this side,” a senior company official said, adding that new plans are unaffected due to funding freezes. “We are aiming to install 1.6 crore streetlights over the next two years… In about a quarter things will improve significantly,” he said.

As part of the national public lighting program, EESL is replacing conventional street lamps with LED luminaires at its own expense. Local municipalities are expected to pay EESL over a period of time out of savings in energy and maintenance costs.

Launched in January 2015, the SLNP aimed to retrofit 1.34 crore streetlights by 2019.

EESL has installed over 1.27 crore of LED street lights in local bodies and gram panchayats across India resulting in an estimated emission reduction of 5.92 million tons of carbon per year and Annual monetary savings estimated at Rs 5,400 crore on municipal electricity bills.

Almost a year ago, the company had sought Cabinet approval to deduct local body dues from the central transfer to the states as well as the monthly liquidation of dues.

The company does not install more LED streetlights in areas that owe high dues. “It’s more or less a given that if we don’t get money, we’re not in a position to invest more. But we have to maintain what we have delivered,” he said.

EESL is working to change the models of the program to deliver and pay. “We will now deliver and collect money. We are looking at partnership models for street lamp maintenance,” he said, adding that the company was also exploring tweaking terms for payment security.

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Elaine R. Knight