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Better street lights boost business and improve lives in India

This story is part of a series on IFC’s work to help create markets that give new opportunities to people in developing countries. These innovative approaches have helped solve some of the largest problems in countries or, sometimes, entire regions.

 

Rashmita Khattoi was born and raised in Bhubaneswar, the capital of India’s Odisha state. After starting her career as an elementary school teacher, she decided to pursue her true love—cooking—and opened her own food truck.

But her business selling local delicacies to people returning home from work got off to a slow start. Bhubaneswar’s roads were so poorly lit that potential customers, worried about their safety, hurried on their way rather than linger after sunset.

“It was so dark that people were unable to see things or gather, and women were afraid at night,” Khattoi remembers.

That was before an innovative public-private partnership (PPP) helped resolve a chronic problem affecting cities across India  —old and ineffective public street lights  .

 

Bhubaneswar’s outdated and poorly maintained street lighting used huge amounts of power, strained the city’s finances, and caused safety concerns for residents and entrepreneurs like Khattoi. It was an ongoing issue for local officials, who searched for solutions to India’s high energy use. India’s 35 million street lights consume 1.5 percent of the country’s energy—equal to all the energy consumed by Costa Rica every year.

“We faced a lot of problems, like very high energy costs, and frequent replacement of the street lights,” says G. Mathi Vathanan, Commissioner and Secretary of Odisha’s Department of Housing and Urban Development. “But we realized we didn’t have the capacity to implement a program” that would resolve so many challenges at once.

 

Part of a broader push

The Bhubaneswar project is just one example of the private sector’s potential to make positive impacts on the climate, which is the focus of the IFC Climate Business Forum 2017 in New Delhi this week. The forum brings together governments and private companies to look at innovative climate-smart projects that are improving infrastructure and services in cities like Bhubaneswar.


Laxman Das sells his flowers at a local street market in Bhubaneswar. © Samarendra Dash/IFC

In the street-lighting project, the Bhubaneswar Municipal Corporation asked IFC to design a PPP that would reduce energy consumption, improve visibility, and make Bhubaneswar safer for its residents.

IFC’s key innovation was to link the private partner’s revenue directly to the amount of energy it saved the city. The more energy the company saved the city, the more it would earn. In 2013, the city partnered with Shah Investments, which proposed to reduce by 80 percent the energy being consumed by street lights.

Today, almost 20,000 street lights in Bhubaneswar have been retrofitted. A centralized control and monitoring system is helping the city save on its energy bill while transforming city streets into brighter and safer places.

The PPP has also helped boost business for Khattoi and the city’s thousands of other urban entrepreneurs. “Due to good lighting, the gathering around my food truck has increased remarkably,” Khattoi says.

For Laxman Das, who has sold flowers on Bhubaneswar’s street for many years, the well-lit streets have helped his sales, too.

Before the city installed new lighting, “I used to shut down my shop in the evening and go home,” Das says. Now, customers notice his shop and buy flowers. “It has helped my business grow.”

 

Lighting the way for India’s cities

Bhubaneswar’s partnership with IFC helped transform the city—and forged a path that other areas of India are now following  . IFC has helped the cities of Jaipur, Berhampur, Cuttack, Rourkela, and Sambalpur improve their street lights through PPPs. Together, these projects will reduce greenhouse gas emissions by nearly 50,000 metric tons per year, bring in over $20 million in private sector investment, and make city streets safer for citizens.



Customers gather at Rashmita's food truck in Bhubaneswar. © Samarendra Dash/IFC

For Khattoi, who owns the food truck, the results of such an effort are much more personal.  She is doing what she has always wanted to do: be her own boss and provide for her family. Better street lights are making it possible for her to achieve these goals, and watch her fellow entrepreneurs achieve theirs, too.

“Business has definitely prospered, not just for me, but for very small egg, nut, and almond shops also selling under the street lights. Now, because of the better lighting, anyone can set up and expand their business,” she says.

Read more about IFC’s work in PPP at www.ifc.org/PPP

Follow the conversation: #IFCmarkets

Published in November 2017