The Malacca Road Lighting project plans to install over 100,000 smart light-emitting diode road lamps across the state using a digital networked lighting system.

The project, which is expected to cost about USD50 million, will improve lighting, lower energy costs, reduce carbon dioxide emissions and enhance road safety.

It will support Malaysia’s drive to cut its greenhouse gas emissions by 40 per cent by 2020 and will be an important initiative under the Sustainable Urban Development Programme for the Indonesia-Malaysia-Thailand Growth Triangle.

The project will be financed using private capital.

“We are very pleased to support the initiative of the state of Malacca to improve the efficiency of public services with advanced technology and PPP.

“We hope that this project will become a leading new business model for energy efficiency that can be replicated in other parts of Asia and the Pacific,” ADB President Takehiko Nakao said in a statement issued here following the signing of the agreement today.

The agreement was signed by ADB Head of the Office of Public-Private Partnerships (OPPP) Ryuchi Kaga and Melaka Green Technology Corporation Chief Executive Officer Kamarudin MD Shah.

It was witnessed by Nakao and Malacca Chief Minister Idris Haron.

The project is being supported by OPPP, which was established in September 2014, to provide independent transaction advice on specific deals and to develop broader PPP knowledge in the region.

Under the advisory agreement, ADB will carry out a detailed project study, develop a bankable PPP structure, design a procurement strategy to identify and select a suitable private sector partner, and advise on the selection of and negotiation with the private sector partner.

A key feature of the project is a planned “pay through savings” model with the financing costs to be reimbursed over time as a result of reduced spending on lighting through the replacement of older, more energy-intensive lamps.

The Manila-based ADB is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration.

Established in 1966, ADB, which is owned by 67 members, including 48 from the region, will mark 50 years of development partnership in the region in December 2016.

Last year, ADB assistance totalled USD27.2 billion, including co-financing of USD10.7 billion.