Cities are among the world´s largestconsumersof electric energy, accountable for two-thirdsoftotal electricity consumption and for over 70 percent ofglobal greenhouse gases emissions. Publicstreet lightingsystems contribute significantly toa city´s energyconsumption. In Brazil, the cost of energy for publiclighting already represents thesecond most expensive item ofmost municipalities’ budgets, surpassed only by payrollexpenditures.Furthermore, new regulations require allthemunicipalities to own the city’s public lightingassets,making public lighting one of the few sectors in which localauthorities have direct control over energy-consuming assets(contrastedwith other high energy-consuming sectors such astransport). As a result, the local authorities willhaveevery incentive to invest in and implementlighting projectsby themselves.In Brazil, the current public street lightinginventory primarily consists of mercury and HPS lamps, whichover time will tend to be replaced by more efficienttechnologies such as Light-Emitting Diodes (LEDs). This newtechnology is already in operation in some major cities inother countries. The availability and increasing spread ofLED technology offers a unique opportunity for Braziliancities to reduce their energy consumption. This isespecially important and beneficial to cities, consideringthe sharp increase in energy prices in recent years.In spiteof the substantial benefits associated with the conversionof the installed public lighting network in Braziliancities, major economic financial and institutional obstaclesstill need to be overcome.In order to reap the benefits ofconversion to LED,it is necessary to design and implementbusiness models that can enable the necessaryinvestments.These business models must take into account thediversity of Brazil’s municipalities.Furthermore,consideration must be given to designingfinancial solutions that can raise private sector capitalwhile mitigating municipal credit and project performance risks.
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