EESL raises Rs500 cr in domestic bonds to fund energy efficiency projects

Energy Efficiency Services Limited (EESL) has made its maiden issuance of Rs500-cr worth of bonds in the domestic market to fund energy efficiency projects in India. The bonds were issued to investors on private placement basis at a coupon rate of 8.07 per cent per annum.

These bonds have been rated AA by ICRA and CARE. The bonds have a maturity ranging from 3.5 to 7 years on STRPP (separately transferable redeemable principal parts) basis.

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, says an EESL release.

The access to Indian bond markets will be a key milestone for EESL to channelise more investments in the energy efficiency market. For FY 2016-17, the capex requirement of EESL is Rs3500 crore. These corporate bonds will form the first of many tranches for raising funds.

EESL is also planning to introduce Green Masala Bonds worth $100 million (approx Rs700 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.

''Our requirements from the markets is quite high; however, we are confident of a great response from investors looking at our unique model,'' Saurabh Kumar, managing director, EESL said.

Energy Efficiency Services Limited (EESL), a joint venture 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, is working towards mainstreaming energy efficiency and is responsible for the world's largest energy efficiency portfolio (worth $13 billion over a period of 4 years).

EESL aims to unlock the energy efficiency (EE) and demand side management (DSM) market valued at Rs1,50,000 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.

For the year ended 31 March 2016, the company reported total revenue of Rs715.65 crore and profit before tax (PBT) of Rs48.12 crore compared to total revenue of Rs71.10 crore and a PBT ofRs13.57 crore in the previous year.

EESL has implemented energy efficiency programmes in domestic and street lighting, buildings, agriculture, etc, at a scale, which no organization has been able to achieve. The growth of the company during FY 2015-16 has been 10 times in terms of turnover as compared to FY 2014-15. The growth is built on careful design of projects in consultation with stakeholders, robust business models, structured strategy of market aggregation, transparency in operations, addressing barriers for different programme.

With strong linkages to national policies such as NMEEE, UDAY, 24X7 Power for All, EESL seeks to create market access for energy efficiency, particularly for domestic consumers and public facilities like municipalities, buildings, agriculture, industry, etc.