July 29, 2016: With the aim to expand LED scheme in India, Energy Efficiency Services Ltd (ESSL) is planning to raise $174 million in 2016 by means of selling bonds in India as well as abroad, according to a chief ESSL spokesperson. ESSL is the government agency responsible that buys and distributes LED bulbs across India. And up until now, the agency has distributed 140 million LED bulbs out of 770 million, which are likely to be distributed by 2019, the spokesperson added.
Further, he said that as of now $386 million has been already invested to buy 800,000 LED street lights and 180 million bulbs. 80% of the LED scheme will be funded through debt and ESSL is to issue the primary tranche of local bonds of five billion rupees with a drift of five years in September 2016.
Green Masala bonds
EESL, which is a joint venture of ministry of power, NTPC Ltd., Rural Electrification Corp., Power Grid Corp. of India Ltd., Power Finance Corp. and the Bureau of Energy Efficiency, is preparing to issue green Masala bonds in November 2016 for $100 million on the London Stock Exchange, the spokesperson said.
ESSL to raise $174 m bonds to expand LED scheme in India
The spokesperson also informed that through a spirited bidding procedure, the company has engaged Mumbai-based Trust Investment Advisors Pvt. as the manager and advisor for the local issue, and also added that a ratings agency is soon to be finalized for the international bonds in the near future.
ESSL will keep on tapping many-sided financing and it is planning to sign a new line of credit with German bank KfW Group for $220 million, totaling to a 50 million euro credit line accessed earlier, the spokesperson said.
EESL, whose yearly revenue boosted 10-fold to 7 billion rupees in the year ended in March 2016 as against 2015, doesn’t rule out the likelihood of an exchange listing. In the first quarter of 2016, the revenue of ESSL is half of 2015 already and the company is looking to forward to sustain this growth prior to looking at an IPO in 2017-18.
EESL is looking forward to double the distribution of LED bulbs for home lighting across India from 140 million at present by the end of first quarter of 2017.