Syska LED has won a uniquely structured tender by Convergence Energy Services Ltd (CESL) to supply LEDs for homes in rural India, based on carbon finance.
In a first-of-its-kind structure, CESL had invited participation of bidders for co-investment on a revenue sharing basis, where costs and profits would be shared in a manner that will encourage public-private participation in climate change mitigation.
In this tender, Syska is downside-protected through a fixed price offered by CESL; upside from carbon credits is shared in equal proportion between the two parties.
Climate change goal
Commenting on the partnership Ms Mahua Acharya, MD & CEO, CESL, said, “Based on an open tender process, we are happy to announce that Syska has won the bid. I hope to see more private players participate with the government to work together for the common goal of climate change mitigation.”
The agreement
As part of this agreement, CESL will be procuring 70 lakh units of 12-W LED lamps, and 30 lakh untis of 7-W lamps. Both Syska and CESL will share 50 per cent of the cost and therefore 50 per cent of the revenue, arising from the sale of carbon credits and the opportunity to participate in nation building. LEDs will be distributed to homes in rural India at a minimal price of Rs. 10 each.
GUJ, MAH, AP, next in line
The Gram Ujala programme was launched by Minister of State for Power and New & Renewable Energy, Shri RK Singh in March 2021. As on date, distribution is ongoing in Bihar and Uttar Pradesh. The next few states are Gujarat, Andhra Pradesh and Maharashtra.
Carbon revenues
The Gram Ujala programme has been designed to support widespread distribution for rural consumers. Energy savings from the use of efficient lights will reduce households’ energy bills, whilst enabling higher disposable income and savings. Carbon revenues are the only way this program is made sustainable.
Innovative financial models
CESL as a newly established company is taking the lead in delivering clean, affordable, and reliable energy supply. It is focusing on energy solutions that lie at the confluence of renewable energy, electric mobility, and climate change by using innovative financial models. It will also prepare, monetize, and hold carbon assets arising from clean energy generation, battery energy storage and energy efficiency.
(Featured photograph for illustration only)
