States asked to clear dues of street lighting bodies

EESL supplies technology and energy efficient products to local bodies.

As part of this exercise, the Union Power Ministry has asked Andhra Pradesh, Maharashtra, Rajasthan, Telangana and Uttar Pradesh to clear dues of EESL for installation of LED street lights.

The Ministry of Urban Affairs is devising a mechanism where states can deduct dues from the Central Grants-in-aid dues from future allocation of funds to municipal bodies.

Power minister Raj Kumar Singh said his ministry was taking the matter forward with the states.

“EESL tied up with the municipal bodies. Despite getting huge grants, many municipal bodies are in poor financial condition, so they were not able to meet their needs. They were unable to pay EESL what they were due. The model that EESL followed was to use upfront funds to replace the lighting and pumping systems. And the municipal bodies were to pay in installments from the savings in the cost of electricity. There is a huge savings in electricity cost—around 40-50%. The model was fine, the only thing was the lack of discipline in the civic bodies.” Peppermint,

“So whatever savings there was in power cost, it was not transferred to EESL. Hence, EESL has not received the payment and is owed approx. 3,000-odd crore,” he said.

As on December 31, 2022, its trade receivables from various government bodies and urban local bodies stood at 4,036.05 crore as per its financial results for the quarter ended December.

As of December 2022, the company estimated that it has made ‘Expected Credit Loss (ECL)’ 32.44 crore in the October-December quarter and 76.21 crore during the April-December quarter.

In its financial results, the company said: “The company is actively pursuing the recovery of dues under trade receivables with the support of various stakeholders including the administrative ministry and is confident of recovery of these dues as these are the main are from various government agencies.”

The company did not respond to queries till press time.

Energy minister Singh also said that the ministry has asked EESL to enter into agreements with state government departments instead of municipal bodies.

EESL is a joint venture of state-run power sector majors NTPC, Power Grid Corp, Power Finance Corp and REC Ltd.

Under the Street Lighting National Programme, EESL has replaced conventional street lights with LEDs at its own cost (without the need for municipalities to invest) and the resulting reduction in energy and maintenance costs of the municipality has been utilized by EESL over time. – is made to repay on time.

The contracts that EESL has entered into with municipalities are for about seven years, where it not only guarantees minimum energy savings (typically 50%), but also free replacement and street lighting at no additional cost to the municipality. Also provides maintenance of the light.

Till date, Energy Efficiency Services Limited has installed over 11 million LED street lights across urban India.

According to the company’s website, this has resulted in an estimated energy savings of 7.72 billion kWh per year, with 1,286 MW of peak demand avoided, CO2 emissions reduced by approximately 5.32 million tonnes per year and an estimated annual savings of 5,395 crore in electricity bills of municipal bodies.