CONTEXT

Street lighting is an essential source of energy consumption in many countries. Most street lighting is still supplied by High-Pressure Sodium-Vapor (HPSV) lamps, Mercury Vapor (MV) lamps or incandescent lamps. These technologies tend to consume a lot of energy and do not always provide for optimal street lighting quality. Light-emitting diode (LED) lamps have a high potential to reduce energy consumption, increase the quality of street lighting and also reduce operating expenses.

PROJECT

In partnership with the Inter-American Development Bank (IDB) and the Colombian National Development Bank (Findeter), BASE developed mechanisms to support municipalities to upgrade their old, inefficient street lighting to more efficient technologies, and save energy. BASE did this by investigating the main barriers municipalities face in upgrading their old inefficient street lighting to more efficient technologies and designing strategies to overcome those barriers.

In Colombia, BASE developed a trust to finance the street lighting, supported municipalities to create or renegotiate contracts at adequate terms for private sector engagement, designed risk mitigation instruments (such as insurance) and helped IDB and Findeter to structure the fund.

OUTCOME

As a result of the mechanisms, Findeter put in place a USD 120 million credit line, with the aim of replacing 300,000 old inefficient lamps with new efficient technologies. The project produced 86 GW hours of energy savings per year. In addition to reducing electricity consumption and greenhouse gas emissions, the projects supported by this solution are expected to reduce the energy costs for Colombian municipalities, generating important cash flows that could eventually support the expansion of the street lighting network in those sub-national entities.