The energy-savings thus achieved are estimated to be 3800GWh per year.
The bank will provide funds to Energy Efficiency Services Ltd (EESL), a joint venture of four public sector bodies including National Thermal Power Corporation, Powergrid Corporation of India, Power Finance Corporation and Rural Electrification Corporation.
EESL will use ADB’s funds and will also mobilise another $200m funds of its own for the program. EESL will provide loans to install light emitting diodes (LED) for municipal street lights, energy efficient domestic lights and fans and energy efficient water pumps for agricultural farms.
The aim is to install about 1.5 million LED street lamps, 42 million LED household lamps, ceiling fans and LED tube lights and 225,000 new pumps.
The Indian states which will receive loans will include Andhra Pradesh, Goa, Karnataka, Maharashtra, Rajasthan, Telangana and Uttar Pradesh. Remaining states will also be included going forward.
ADB South Asia regional department director General Hun Kim said: "Energy efficiency is by far the least costly option to ensure or expand energy access while still cutting deadly greenhouse gas emissions and other pollutants.
"With India one of the world's largest and fastest-growing economies, getting the country firmly on a path of low-carbon growth will have an impact not only at home but for the rest of the world too."
ADB says that successful completion of the project can attract more investment in the field of energy efficiency.
By 2020, EESL aims to install at least 4.5 million streetlights, 700 million LED bulbs and 600 million energy efficient water pumps which require more than $12bn.
In line with its commitment at the Paris climate summit, Indian government has recently launched several initiatives under the National Mission for Enhanced Energy Efficiency.
The initiatives will focus on energy efficiency in energy intensive businesses and hopes to unlock the market for energy efficiency projects with an estimated value of $11bn.
The government has plans to save 80% energy with LED lights at home and institutions, 50% energy with LED streetlights and about 30% savings with energy efficient water pumps.
