In a first of its kind initiative, Indian Railways is awarding a contract to a US-based agency to replace 26 lakhs (2.6 million) incandescent bulbs with energy-efficient CFLs in railway households free of cost.

"Railways have issued the Letter of Intent to International Resources Group to implement the CFL project in its colonies," said a senior Railway Ministry official.

IRG will provide four CFL bulbs to each house in railway residential colonies free of cost and earn carbon credits by registering itself with the UN Framework Convention on Climate Change under Clean Development Mechanism project.

Railways have total 6,50,000 houses across the country. "It is win-win situation for us.

"We are earning three per cent of total carbon credits earned from the CFL project without investing anything in it," said the official.

IRG, which is to deposit bank draft worth Rs 50 lakhs (Rs 5 million) as security deposit, will earn 97 per cent of total carbon credits for the project.

According to experts, compact fluorescent lamps are four times more energy efficient and railways are expecting to save 130 million units of power per year from the project.