EESL Issues Bonds to Fund Energy Projects

Energy Efficiency Services Limited (EESL) has made its maiden issuance of bonds in the domestic market to fund energy efficiency projects in India.

Domestic bonds worth Rs. 500 crore were issued to investors on private placement basis at a coupon rate of 8.07% per annum.

These bonds have been rated AA by ICRA and CARE.

The maturity of the bonds range from 3.5 to 7 years on STRPP basis.

Meanwhile, Trust Investment Advisors is the sole arranger of the issue.

The bonds are proposed to be listed in WDM segment of the Bombay Stock Exchange.

The issuance has been fully subscribed showcasing the faith investors have in the energy efficiency business of the company.

The access to Indian bond markets will be a key milestone for EESL to channelize more investments in the energy efficiency market.

For FY 2016-17, the capex requirement of EESL is Rs.3500 crore.

Aiding this requirement, these corporate bonds will be the first of many tranches.

EESL is also planning to introduce Green Masala Bonds worth USD 100mn (approx. Rs.700 crore) in November. The company has also tied up funding from multi-lateral agencies like KFW, AFD and ADB for funding its energy efficient projects.

Energy Efficiency Services Limited:

Energy Efficiency Services Limited (EESL), a JV of NTPC Limited, Power Grid Corporation of India Limited (PGCIL), Power Finance Corporation Limited (PFC Limited) and Rural Electrification Corporation (REC), under the administration of Ministry of Power, Government of India, is working towards mainstreaming energy efficiency and is responsible for the world’s largest energy efficiency portfolio (worth 13 BLN USD over a period of 4 years).

EESL aims to unlock the energy efficiency (EE) and demand side management (DSM) market valued at Rs. 1.5 Lakh crore, and implement large-scale EE projects.

It seeks to create market access, particularly in the public facilities (municipalities, buildings, agriculture, industry etc.), implement innovative business models, handhold private sector Energy Service Companies (ESCOs) in an effort to ensure replication.

EESL has implemented energy efficiency programs in domestic and street lighting, buildings, agriculture, etc., at a scale, which no organization has been able to achieve.