Energy-Efficient Street Lighting PPPs

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Street lighting is an essential public service typically provided by public authorities at the sub-national and municipal level. Cities are increasingly investing in energy-efficient street lighting systems to replace or enhance their outdated systems. While reliable and bright public lighting reduces accidents and crime and allows for economic activity after sunset, modern energy-efficient street-lighting technology can also lower energy consumption as well as operation and maintenance costs significantly. Many different models have been developed world wide to deliver energy-efficient street lighting projects, including public-private partnerships. This section looks at sample contracts, bidding documents, policies, laws and regulations, and other tools related to street lighting projects.

 

 

 

 

 

 


 

Sample Contracts, Clauses and Bidding Documents

 

Brazil

Belo Horizonte - Concessão administrativa para a prestação dos serviços de iluminação pública no Município de Belo Horizonte incluídos o desenvolvimento, modernização, ampliação, eficientização energética, operação e manutenção da Rede Municipal de Iluminação Pública – Concession for the development, modernization, expansion, energy-efficiency, operation and maintenance of the municipal lighting network. See also: Impact Story: SNTA supports street lighting PPPs in Belo Horizonte and Rio de Janeiro, PPIAF April 2016

 

Canada:

Request for Proposal – LED Streetlight Luminaire Supply of August 2014. Local Authorities Services (LAS) and RealTerm Energy developed a streetlight replacement program which resulted in 150 municipalities jointly procuring LED public lighting on a turnkey basis. This lowered transaction costs, enabled competitive procurement for the small and medium sized municipalities, and transformed the LED market in Canada. 

 

France:

MAPPP – Le clausier type “éclairage public  (Model Contractual Provisions for Street Lighting PPPs)

 

Germany:

Package of tender documents for PPP street lighting projects (Verdingungsunterlagen Beleuchtung) developed by Partnerschaften Deutschland ÖPP Deutschland AG – upon registration (German)

 

India:

Odisha, Bhubaneswar Street Lighting Project - Request for Proposal (RFP) Documents for the Selection of Energy Service Company (ESCO) to Implement Street Lighting Project in the City of Bhubaneswar of February 2013. RfP documents contain draft energy performance contract to be entered into by the local authority (Bhubaneswar Municipal Corporation - BMC) and the ESCO (Contractor). The draft contract is based on the shared savings model. The Contractor undertakes to enhance the existing street lighting infrastructure, install cost-effective modern lamp technology, feeder panels for automation and metering, and to operate and maintain the street lighting system covering approximately 20,000 light fixtures. The construction period is 8 months from the effective date of the contract. The contract is for 10 years. Minimum value of guaranteed energy savings is 30%. Payments are based on the energy savings realized. The local authority pays fee from energy savings. ESCO would receive monthly payments out of 90 % of the energy savings realized plus and operation and maintenance fee for each light pole that is taken over by the ESCO under the contract. See also PPP Stories - India: Bhubaneswar – Street Lighting, IFC December 2013.

 

Mexico:

Guadalajara – Leasing contract (Contrato de Arrendamiento) - Leasing contract of 15 April 2015 between the municipality and a partnership between the installer, Electricidad y Tecnología S.A. de C.V. (Electrotec) and the financial institution, Solucash S.A. de C.V. Sofom E.N.R. (Solucash), regarding the replacement of luminaires and the strengthening of the light network infrastructure in Guadalajara. Private partner is responsible for the installation of the luminaires. Municipality leases retrofitted lights from private partner and makes monthly payments over the 10-year lease term to be financed through cost savings. After expiry of the contract ownership of the luminaires will be transferred to the municipality. 

 

 

United Kingdom:

Street Lighting Procurement Pack - Model Documentation by the Local Partnerships (upon registration)  – Model documentation aims to provide assistance to local authorities in the procurement of street lighting projects through a public private partnership or through the Private Finance Initiative. It is not intended to be a word-for-word template.

 

Birmingham Highways Maintenance and Management Service PFI - Project Agreement & Schedules -Contract between Birmingham City Council (Authority) and Amey Birmingham Highways Ltd (Service Provider) relating to the rehabilitation, maintenance, management and operation of the roads and street lighting network in the City of Birmingham pursuant to the Government’s Private Finance Initiative (PFI). The contract was signed in May 2010. The street light component is only one part of the 25-year contract and covers the modernization and maintenance of 97,000 street lights and the upgrade of associated street infrastructure.

 

United States:

Michigan, Detroit Metro Region - Metro Region Freeway Lighting Public-Private Partnership - Delivery of Freeway Lighting as a Design-Build-Finance-Operate-Maintain (DBFOM) Project. Project Agreement with Schedules between the Michigan Department of Transportation (MDOT) and Freeway Lighting Partners, LLC (Project Company) of 24 August 2015. Contract term 15 years. Project Company to design, build and finance the improvements on existing freeway and tunnel lighting systems during a two year construction period and to operate and maintain the existing and improved lighting system for the remaining operating and maintenance period of 13 years. Private partner to hand back the lighting system to MDOT at the end of the contract term. MDOT to make Milestone Payments to the Project Company during the design and construction period and Service Payments to Project Company for performance of services during the operating and maintenance period.  The Service Payment takes account of energy savings achieved by the Project Company. 

 

 

Policies and Legislation

 

France:

The Code général des collectivités territoriales (French law for regional and local authorities) provides that municipalities have the responsibility for lighting. PPPs (or délégations de service public) are common in this field.

 

Mexico:  

Relevant legislation on street lighting (Normatividad aplicable al alumbrado público) (Spanish) 

 

 

Toolkits and Reports

 

PPP in Germany: street-lighting and other sustainability projects, Partnerschaften Deutschland ÖPP Deutschland AG December 2010 explains key elements of the PPP street lighting model.

 

Lighting Brazilian Cities: Business Models for Energy-Efficient Street Lighting (Modelos de Negócio para Eficiência Energética em Iluminação Pública), World Bank, June 2016 (English and Portuguese) - Based on city studies and surveys in more than 300 municipalities, the report identifies business models and innovative financial structures that match the needs and capabilities of different sized cities. It also provides recommendations to governmental institutions on developing effective new policies and mechanisms to help Brazilian cities take ownership of their public lighting.

 

Prefeasibility Study Municipal Energy-efficient Public Street Lighting Project in the City of Rio de Janeiro, World Bank Group August 2014 - The objective of this study is to provide city officials in Rio de Janeiro with (a) a brief overview of the global trends in EE public street lighting; (b) a review of the relevant regulatory, institutional and legal frameworks that would have an impact on an investment in energy-efficient public street lighting; and (c) recommendations for financing structures that achieve scale by bundling/aggregation. See also: Impact Story: SNTA supports street lighting PPPs in Belo Horizonte and Rio de Janeiro, PPIAF April 2016

 

Proyecto Nacional de Eficiencia Energética en Alumbrado Público Municipal (PNEEAPM – National Project for Energy Efficiency and Public Municipal Lighting) This program was established by Mexico’s national government. It aims to provide technical assistance and financing to municipalities intending to implement better and more efficient street lighting systems. 

 

 EESL Toolkit for Street Light Energy Efficiency, Energy Efficiency Services Limited (EESL) December 2013. The toolkit is based on analysis of the practical situation in Indian municipalities, and experience gained through the implementation of its ongoing street lighting projects.

 

Further Reading and Resources

 

Lighting Brazilian Cities: Business Models for Energy-Efficient Street Lighting (Modelos de Negócio para Eficiência Energética em Iluminação Pública), World Bank, June 2016 (English and Portuguese) - Based on city studies and surveys in more than 300 municipalities, the report identifies business models and innovative financial structures that match the needs and capabilities of different sized cities. It also provides recommendations to governmental institutions on developing effective new policies and mechanisms to help Brazilian cities take ownership of their public lighting.

 

Proven Delivery Models for LED Public Lighting, ESMAP 2016 - Case studies covering super-ESCO, PPP, ESCO, Lease-to-own, Municipal Financing and Joint Procurement LED Lighting Delivery Models, and a synthesis of the six case studies

 

Guide practique de léclairage public, L’Association des Petites Villes de France and citelum, November 2014

 

Street Lighting Toolkit – How to assess the impact of an energy efficiency investment in the street lighting asset, Scottish Futures Trust, March 2013 - The toolkit and the two accompanying business cases aim to assist local authorities to assess the impact of investing in energy efficiency measures within their street lighting asset. It draws on best practice and learnings from local authorities who have already implemented successful energy efficient street lighting schemes and provides clear guidelines and a structured approach and process for councils to work through to deliver energy efficient street lighting initiatives.

 

Republic of India, Energy-Efficient Street Lighting - Implementation and Financing Solutions, World Bank, June 2015  - This reports serves as a manual for the implementation of LED lighting programs based on the experiences from India. Among other things it provides templates for investment grade audits, procurement and contracting, tools and matrices. The manual has been designed according to the requirements and constraints specific to India. However, many of its recommendations may be applicable across urban local bodies (ULBs) and municipalities in other countries.

 

Energy-efficient street lighting, European PPP Expertise Centre (EPEC) June 2013 (English, Italian, Polish, Romanian) - This fact-sheet summarizes the rationale behind the imperative to improve the energy efficiency of street-lighting, including financial, legislative, technological and environmental drivers. The fact-sheet explores the role of ESCOs in street-lighting and references select examples of successful street-lighting projects, and sources for further reading on the topic.

 

 

 

 

 

 

 

 

Last Updated : Tue,2016-12-06