Hyderabad: Financial crisis hits EESL as GHMC fails to clear Rs 144.48 Cr dues

Hyderabad: Energy Efficiency Services Limited (EESL), a joint venture under the Ministry of Power, is grappling with a financial crunch as the Greater Hyderabad Municipal Corporation (GHMC) has yet to clear Rs 144.48 crore dues.

Energy Efficiency Services Limited (EESL) is a joint venture of NTPC Limited, Power Finance Corporation, Rural Electrification Corporation, and POWERGRID, established under the Ministry of Power, Government of India.

Despite the payment delays, EESL continues to maintain 5.48 lakh LED streetlights across Hyderabad, ensuring the city’s public lighting needs are met.

Pending Payments and Annuities

In addition to the Rs 144.48 crore outstanding, GHMC has also withheld Rs 57.10 crore in regular annuity payments for the past six months.

EESL’s contract with GHMC remains valid until April 2025. The corporation has recently issued a tender for 15,000 new streetlights for Rs 3 crore, even as it continues to delay payments owed to EESL.

EESL’s financial woes are not due to performance issues. The company has consistently maintained the streetlights, attended to complaints, and ensured public safety.

“Despite the significant financial challenges posed by GHMC’s delayed payments, EESL remains steadfast in its commitment to the people of Hyderabad. However, the long-term sustainability of this project requires GHMC to honor its contractual obligations,” said S Ramesh T, State Head, EESL.

He also urged GHMC to release the pending dues promptly to support the ongoing streetlight project.

High Performance Amid Financial Strain

Operating under the Energy Service Company (ESCO) model, EESL took on the full upfront investment, expecting monthly repayments from GHMC to cover both capital and operational expenditures. Despite the financial strain, EESL has resolved 98.9% of the 2,18,422 complaints it received over the past eight months. The company has replaced 44,753 faulty streetlights and continues to repair between 600 and 700 defective lights daily. Additionally, EESL has installed 3,600 new streetlights in the past two months to accommodate the city’s needs.

From September 2018 to December 2023, 10,655 LED streetlights in GHMC areas were damaged due to lightning strikes, high voltage, unauthorized handling, and accidents—issues beyond EESL’s contractual obligations, which only cover manufacturing defects. These damages were jointly verified by GHMC and EESL, but the issue remains unresolved.

Broader Impact Across Telangana

EESL’s reach extends beyond Hyderabad, with the company having installed over 1.72 million streetlights across 140 municipal bodies in Telangana. These efforts have resulted in an estimated 193 MW of peak power savings and reduced carbon emissions by 0.81 million tons annually. However, across various projects in the state, Telangana owes EESL Rs 314 crore, with payments delayed by 19 to 24 months.

EESL’s streetlight contract covering 74 municipal bodies will expire in April 2025. While the company sees potential for extending the project, it is contingent on timely payments and improved financial arrangements with the Telangana government. “The long-term viability of this project depends on GHMC clearing its dues,” Ramesh T added.

Future of the Project

Despite the financial strain, EESL has maintained its operations, ensuring Hyderabad’s streetlights continue to function efficiently. However, continued delays in payments are jeopardizing the project’s future.

“We urge GHMC to release the pending dues promptly, as this will enable us to further enhance the city’s lighting infrastructure and meet the growing demands,” Ramesh T reiterated.

About Energy Efficiency Services Limited (EESL)

EESL is a Super Energy Service Company (ESCO) that aims to unlock the energy efficiency market in India, estimated at Rs 74,000 crore, with potential energy savings of up to 20% of current consumption. It also serves as a resource center for capacity building for State DISCOMs, ERCs, SDAs, and financial institutions.