Contribution to State Energy Conservation Fund

Section 16 (1) of the EC Act requires State Governments / UT Administrations to constitute a fund called State Energy Conservation Fund (SECF) for the purpose of promotion of efficient use of energy and its conservation within the State. In this context, a scheme titled Contribution to SECF was approved by the Ministry of Power during the XI plan and continued during the XII plan. It has also been approved by the Ministry of Power for the period 2017-20.

The SECF can facilitate to overcome the major barriers for implementation of energy efficiency projects. It is intended to be used as an instrument to facilitate implementation of energy efficiency projects through market transformation. For undertaking energy efficiency projects through SECF, major part of the funds disbursed under SECF is to be earmarked separately as Revolving Investment Fund (RIF). This RIF may be used to finance implementation of energy efficiency projects in public buildings including those of Central Government, State Government and Central or State Government undertakings’ / agencies’ buildings, energy efficiency street-lighting or common area lighting projects, energy efficiency projects in public drinking water pumping stations and in agricultural pumping, energy efficiency projects in various industrial sectors and MSME clusters etc.

The contribution under SECF is made to those State Governments / UT Administrations who have created their SECF and finalized the rules and regulations to operationalize the same. The scheme is for contribution to all the State/UTs with a maximum ceiling of Rs. 4.00 crore for any State/UT provided in two installments of Rs. 2.00 crore each. The second installment of Rs. 2.00 crore under contribution to SECF is released only after the states have provided a matching contribution to the first installment of Rs. 2.00 crore provided by BEE. It may be mentioned here that the matching contribution by the State Government for North Eastern States and the UT Administrations is relaxed to Rs. 25.0 lakhs instead of Rs 2.0 crore