CIF Funding for Efficient Ceiling Fans in India Facing Challenging Market

Climate Investment Funds2 August 2013: The Climate Investment Funds (CIF) has posted an article outlining funding-access, and consumer willingness to pay, challenges facing a CIF-funded project aiming to introduce super-efficient ceiling fans in India.

The story outlines how the 12 per cent annual increase in electric fan sales led the Indian Bureau of Energy Efficiency (BEE) to create a programme to reduce their energy consumption. A US$50 million loan from the CIF's Clean Technology Fund was then negotiated to support Indian manufactures in switching to super-efficient models. It notes that this funding for BEE functions under the Indian Ministry of Power, and since India's major source of power is fossil fuels, any energy-efficiency improvements could play a major role in addressing climate change.

They indicate that there is uncertainty regarding the willingness of consumers to pay an up-front premium for the more expensive fans, even though they will eventually save money via avoided energy costs in the long run. The article continues by noting that smaller manufacturers have complained because government criteria for funding favor larger manufacturers, and also that government processing delays have led to challenges in making the funding available to the manufacturers and distributors.

The CIF is a collaborative initiative of the African Development Bank (AfDB), the Asian Development Bank (ADB), the European Bank for Reconstruction and Development (EBRD), IDB and the World Bank. [CIF article]