Power Finance Corporation looks to fund Energy Efficiency’s purchase of 10,000 electric cars

Faced with a near-dry thermal power generation market which it funded so far, Power Finance Corporation (PFC) is exploring ways to fund purchase of 10,000 electric cars by Energy Efficiency Services Limited (EESL), according to an official familiar with the development.

This will be a first for the power sector-focused lender which has so far funded only thermal and renewable energy generation projects.

“PFC has talked to EESL on funding the purchase of the cars. Nothing has been finalised yet but it is under discussion,” the official said.

EESL has floated a tender to buy 10,000 electric cars which will then be used by various government agencies. It’s a two-phase tender under which 1,000 cars will first be deployed in the in the National Capital Region of Delhi and 9,000 cars put into service in the rest of the country later.

 The cars will be air conditioned with both base and high-end models part of the project. The last date for bidding under the tender is September 26.

The overall size of energy efficiency market is estimated to be Rs. 74,000 crores. Till now, only 5 percent of this market has been tapped through energy service companies, mainly in the areas of lighting and some industrial applications. Large-scale implementation of energy efficiency is constrained by a number of regulatory, institutional and financing barriers.

PFC and REC are two power sector-focused lenders. Efforts of the current government notwithstanding, the fortunes of the power sector in the country have not really revived. While the governments UDAY programme has gone some distance in alleviating the pain of the state-owned distribution companies, the woes of the stuck private sector projects are yet to be mitigated, thus putting stress on the balance sheets of the lenders.

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