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India, Odisha Public Street Lighting

Structuring a public private partnership to deliver efficient LED street lighting

odisha street lighting

Context

A lack of efficient, high quality street lighting in key urban centres has been identified as a major concern by the Government of Odisha in eastern India.  Existing street lighting systems are inefficient and expensive to operate whilst residents have safety concerns regarding poor lighting on roads and pedestrian routes.  The Government of Odisha has expressed its commitment to the Government of India’s national smart cities mission, an initiative designed to ensure that India’s cities can grow sustainably and provide good quality of life for residents.  As has been demonstrated in other Indian cities such as Jaipur, upgrading lighting systems has the potential to cut carbon emissions and improve the safety of residents whilst delivering significant savings for municipal authorities.

Project

The International Finance Corporation (IFC) was approached by the State’s Housing and Urban Development Department to structure a public private partnership (PPP) to address inadequate street lighting across five municipalities. With US$230,000 of vital funding from DevCo, technical, legal and analytical due diligence was undertaken to develop a suitable structure for a public street lighting PPP for the cities of Bhubaneswar, Berhampur, Cuttack, Sambalpur and Rourkela. Following a competitive tendering process, a consortium comprised of Danish company, Novalume A/S and domestic lighting company, Neev Energy LLP, were awarded the project contract. The consortium signed an eight year agreement with the municipal corporations of the project cities and the Government of India’s Energy Efficiency Services, committing US$5m to transform Odisha’s street lighting.   

Impact

The project will replace around 40,000 bulbs with high quality, energy efficient LED bulbs, significantly reducing the economic and environmental burden of street lighting for city authorities. CO² equivalent emissions are expected to fall by 12,500 tons annually.  The new systems will have automated monitoring and adequate staffing to reduce downtime.  The initiative will improve access to public lighting for up to 400,000 people, enabling them to go about their daily activities in safety and security.

Funding support from DevCo to structure an effective PPP agreement was a key enabler for the Odisha Street Lighting project.  The project mobilised US$5m of private sector investment, attracting international involvement from consortium lead, Novalume. Building the capacity of local officials to negotiate PPPs at state and municipality level, coupled with the development of an effective, bankable PPP structure for delivery of public street lighting, makes the project highly impactful.