Copyright 2005 The Press Trust of India

April 24, 2005 Sunday

Nationwide International News

527 words

Beijing, Apr 24

In an attempt to increase investment in the energy sector, experts from India, China and Brazil have discussed developing a "viable" Energy Service Company (ESCO) industry in order to substantially lower economic, social and environmental costs in the field.

The official estimates show emissions of carbon dioxide and other greenhouse gases rising by 3 per cent between 2002 and 2003, almost double the year-over-year increase in gross domestic product of 1.7 per cent.

The meeting, under the '3 Country Energy Efficiency Project (3CEE)', aims to hike investments in energy efficiency by financial sectors in the world's three largest developing countries -- Brazil, China and India, Senior Energy Planner with Denmark-based UN Environment Programme Risoe Centre, Jyoti Prasad Painuly told PTI here.

The 3CEE Project, a partnership between World Bank, UNEP Risoe Centre and institutions in Brazil, China and India, is a unique effort at learning by sharing the best practices among the three countries with very high Greenhouse Gas (GHG) reduction potential.

"The potential for cooperation between India, China and Brazil is tremendous and we are making all-out efforts so that energy conservation experts from the largest developing nations can join forces to find ways to reduce energy consumption as well as help save the environment," he said.

"If present trends continue, these countries will more than double their use of energy and greenhouse gas emissions in the next 20 years," Koshy Cherail, Consultant to India Secretariat World Bank-UNEP 3-CEE Project under the Indian Renewable Energy Development Agency (IREDA), said.

By pursuing cost effective investments in energy efficiency, they can reach development with substantially lower economic, social and environmental costs, Koshy said. India has a small but growing community of ESCO entrepreneurs like Asian Electronics Limited, Sri Shakti Alternative Energy Limited and Elpro Energy Dimensions (P) Ltd which have emerged over the last few years, Koshy said.

"As energy costs are a steeply rising share of production or operating costs in all industrial and business activities, managing energy costs has become a critical factor in profitability," he said.

"Some of India's early entrants in ESCO business have implemented projects in China, Pakistan, Indonesia, Kenya etc and their project planning and financial structuring skills are highly sought after in the global market", Chairman and Managing Director of Asian Electronics Ltd, Suresh H Shah said.

Koshy said ESCOs in India did not have large assets as their operations had begun only recently. "Therefore, while they have the technical capability to identify and custom-design projects which deliver energy savings and have a short payback period of a year and half or two, they often are unable to convince their clients and investors about the certainty of delivering the savings", he said.

A significant achievement for the 3CEE project in India was that State Bank of India, Canara Bank and Union Bank of India, which have been participating in the programme, have designed and launched schemes targeted at energy efficiency projects, Koshy said. However, such efforts by banks have to be coupled with initiatives to strengthen the ESCO business so that available funds can be tapped and projects multiplied, he said.

April 25, 2005