LED Streetlight Deployment Model for ERP - for Specific Technologies
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On this page: LED Streetlight Deployment for Specific Technologies leveraging an Existing-Refurbish-Finance-Bulk-Fees model - Model 5 in the ERP Project Guidelines. Read more below, or visit Strategic Guidance for Country System Assessments, Guidance for Countries in Assessing ERC Projects, or Mobilizing ERC Finance.
Project Type: Energy efficiency
Sector: Power
Applicable Project Methodology: AMS-II.C. Demand-side energy efficiency activities for specific technologies
The project activity type seeks to improve the energy efficiency of building lighting systems by substituting existing luminaires with lighting fixtures that use Light Emitting Diodes (LEDs), which are more energy efficient. The reduction in energy consumption will reduce the amount of greenhouse gas (GHG) emissions emitted.
The project will be leveraging an Existing-Refurbish-Finance-Bulk-Fees model. This will involve the Town Councils, supported by the local municipal governments, contracting an experienced private sector entity to replace the existing lighting in the target locations. The private sector entity will be raising financing given that the assumed payment arrangements from the Town Councils will be a percentage of the power consumption savings resulting from the project through a 10-year period. Table 1: Model Attributes Proposed risk allocation of the Public Private Partnership Model Key features of PPP structure Expected ERC end use Key considerations/risks for proposed project Figure 1: Financing and Activity Flows for the Model Project description The project aimed to enhance the energy efficiency of building lighting systems by replacing current luminaires with more energy-efficient "Light Emitting Diodes" (LEDs) lighting fixtures in the corridors, staircases, and void decks of numerous existing buildings situated across 12 Town councils throughout the country. To be specific, the project will involve replacing of 668,723 existing luminaires by LED luminaires in the corridors, void decks, and staircases of the existing Housing & Development Board (HDB) buildings. By replacing the current luminaires with LED lighting fixtures, it is possible to achieve a reduction of GHG emissions. Impact Expected annual ERCs credits generated from the program will be 13,158 tonnes through a 10- year crediting period. The financing from the voluntary carbon markets was judged to be essential to overcoming the investment barrier of a lower-than-benchmark equity internal rate of return (IRR) if relying solely on the payments provided by the Town Councils, as assessed by DTZ Facilities & Engineering (S) Limited. Figure 2: Structure of Case Study PPP A contract has been signed between the 12 Town Councils and DTZ Facilities & Engineering (S) Limited, which outlines the terms and conditions of the project and confirms the ownership of the project to DTZ. DTZ Facilities & Engineering (S) Limited has the rights to manage the project, which means that they are responsible for overseeing the implementation and execution of the project. As the project developer for this project, DTZ is responsible for ensuring that the project meets Verified Carbon Standard (VCS) requirements. Assuming a similar scale as the case study of replacing ~690,000 luminaries in total, the project’s Net Present Value (NPV) without ERC in- and outflows – only considering non-ERC inflows through other revenue streams or cost savings enabled by the project – is positive at $ 0.01 Million (M)1. With ERC cashflows, the NPV improves substantially to positive NPV of $ 0.4M, which provides added value to make LED lightbulb projects more financially attractive. There is also substantial NPV value for users that benefit from this projecting approximately $ 0.3M for net user benefit. This accounts for the estimated annual net electricity consumption savings. Table 2: Summary of sources of inflows and outflows and key assumptions Table 3: Net cashflows summary (in USD) Footnote 1: All prices are expressed in United States Dollars (USD)Proposed Structure of this Public Private Partnership (PPP) Model
Dimension
Attribute
Description
Business New This model assumes that a competitive bidding among experienced project companies will take place Existing Construction Build The model involves the project company taking over and refurbishing current lighting infrastructure Refurbish Private Funding Finance The project company will be tasked with raising the funds for the installation of the LED lighting Service Bulk The project company will be collecting payments from the Town Councils for the service of replacing the current lighting User Revenues Fees Revenues in this model will originate from the pre-agreed payments of the Town Councils to the project company for the service of replacing the current lighting Tariffs 
Case study: Replacement of existing luminaires with LED lighting luminaires in several buildings across 12 Town Councils, Singapore
Summary of the model financials
Value component
Assumptions
Sources
ERC revenues or inflows Average price of Energy Efficiency project in Asia, VCS Non-ERC revenues or inflows DTZ case study benchmark Project investment and implementation cost DTZ case study benchmark ERC generation Verra Fee Schedule Components
Sum of initial outlays
Sum of in- or outflows from crediting period
Total cashflow
ERC Component Revenues/Inflows 0 1,031,587 1,031,587 Costs/Outflows 0 -73,421 -73,421 Net value 0 958,166 958,166 Primary/Non-ERC Component Revenues/Inflows 0 54,675,579 54,675,579 Costs/Outflows -37,500,000 0 -37,500,000 Net value -37,500,000 54,675,579 17,175,579 Total Net Value NPV $375,754 NPV (ERC Component) $362,948 NPV (Non-ERC Component) $12,806 NPV (Net user benefit) $7,089,985
TABLE OF CONTENTS
UNLOCKING GLOBAL EMISSION REDUCTION CREDIT
Guidance for Countries in Assessing ERC Projects
1. Introduction to Emission Reduction Credits
• The World Bank's Emission Reduction Program
•Classification of Emissions Reduction Credit
• Policy Context of Emissions Reduction Credit
2. Objective of the Guidance for Countries in Assessing ERC Projects
• Objective of Project Preparation Guidelines
• Introduction to the Project Assessment Framework
• Process to Conducting Assessments
• S1: Green Economy Priorities
• S3: Article 6 Readiness and Eligibility
4. Conducting the Initial Profiling and Making a Preliminary Decision
• F2: Additional Value Enabled by Project
• C1, C2, and C3: Carbon Integrity and Environmental and Social Risk Management
5. Conducting the Project Assessment and Making the Final Decision
• F1: Project ERC value and F2: Additional Value Enabled by Project
• Q2: Marketing, Sales, and Pricing
• Q3: Project Governance and Structure
• C2: Environmental Risk Management
• C3: Social Risk Management and Benefits
6. Further Guidance for Application
• Country Context-driven Factors
• Considerations for Future Scope
Abbreviations: Guidance for Countries in Assessing ERC Projects
• B: Project Assessment Template
- Model 1: MRT Energy Efficiencies Model for ERP
- Model 2: Rural Electrification Model for ERP
- Model 4: Rooftop Solar Installation Model for ERP
- Model 5: LED Streetlight Deployment Model for ERP - for Specific Technologies
- Model 6: E-bus Deployment Model for ERP
- Model 7: EV Charging Systems Installation Model for ERP
- Model 8: Biodigesters Deployment Model for ERP
- Model 9: Waste-to-Power Model for ERP
- Model 10: Waste Treatment Facility Model for ERP
- Model 11: Climate Smart Farming Deployment Model for ERP
This section is intended to be a living document and will be reviewed at regular intervals. The Guidelines have not been prepared with any specific transaction in mind and are meant to serve only as general guidance. It is therefore critical that the Guidelines be reviewed and adapted for specific transactions. Unless expressly stated otherwise, the findings, interpretations, and conclusions expressed in the Materials in this Site are those of the various authors of the Materials and are not necessarily those of The World Bank Group, its member institutions, or their respective Boards of Executive Directors or member countries. For feedback on the content of this section of the website or suggestions for links or materials that could be included, please contact the Public-Private Partnership Resource Center at ppp@worldbank.org.