CESL issues a first of its kind, tender; seeks private participation in a unique partnership for rural LED scheme

Convergence Energy Services Limited (CESL), a wholly-owned subsidiary of Energy Efficiency Services Limited, has issued a first-of-its-kind tender to procure 1 crore LED bulbs for its Gram Ujala program. Through this tender CESL intends to invite the participation of bidders for co-investment on a revenue-sharing basis. Under the Gram Ujala program, CESL will distribute high-quality LED bulbs, at an affordable cost in rural areas.

Explaining the tender Ms. Mahua Acharya, MD & CEO of CESL, said, “The objective is to involve private companies in the delivery of climate change mitigation in rural India and create an example of innovative public-private participation. Through this tender, we are asking private companies to share 50 percent of the cost, and therefore 50 percent of the revenue, arising from the sale of Carbon Credits and the opportunity to participate in nation-building. With CESL’s new and innovative business model, we will be able to maximize the reach of the LED bulbs, and also contribute to climate action.”

CESL will be procuring 70 lakh 12-watt LED lamps, and 30 lakh 7-watt lamps. As per the last discovered prices of these LED lamps, the 12-watt lamp will be considered at Rs 75 per bulb and Rs 42 for the 7-watt bulb. Under this procurement, the costs and revenues will be split. CESL will guarantee payment of 50% of the last discovered price, giving private companies assurance of a floor price. The bidder will have to quote a differential price per bulb, that is, the price that the bidder wants to receive for their LED over and above the floor price. The differential will be called the participation price. The bidder will need to quote a participation price for both types of bulbs separately. L1 will be determined on the basis of the least participation price in each type of bulb.

Ms. Mahua Acharya, MD & CEO of CESL, added that “This scheme can be particularly valuable for companies with emissions reduction targets. It can also be strategic for companies to participate in a collaboration with the government.”

Convergence Energy Services Limited (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.