Inside cleantech India: Kal, Aaj aur Kal!

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Venture capital and private equity

Bihar, India-based Husk Power Systems (HPS), with operations in the United States, raised an undisclosed amount of second round funding from Shell Foundation to expand its operations for its biomass electrification technology, which converts rice husks into electricity. Previously, the company raised $235,000 from a number of business plan competitions (Massachusetts Institute of Technology, Dell, University of Virginia and Texas) as well as an additional $250,000 from Draper Fisher Jurvetson and Cisco. HPS currently owns and operates 35 to 100 kilowatt mini plants that generate electricity for 2,000 to 4,000 villagers in Champaran, Bihar. HPS’s five pilot projects—which electrify five villages with three power plants—became profitable within six months. HPS is also working with the Indian government on receiving a Clean Development Mechanism certification for selling carbon credits generated at its plants.

Hyderabad-based power generation company Ind-Barath Power Infra raised $100 million in private equity funding from Citi Ventures, Sequoia Capital, and Bessemer Venture partners in its second round of private equity funding. These investors now hold a total 18 percent stake in the company, valuing it at $448 million. Motital Oswal Investment Management drove the deal mandate. In an initial round of fundraising in 2007, Citi Ventures and UTI Bank invested $64 million in the company. Ind-Barath Power, which is setting up around 3,000 megawatts of capacity, has a current operating capacity of 375 MW with five plants in Tamil Nadu, Maharashtra and Karnataka. The company is also setting up a 450 MW power project in Karnataka.

Public markets

Avesthagen, a Bangalore-based life sciences company, is planning to revisit its postponed IPO plans by March 2010 to raise up to $149 million for funding its various projects. The company deferred its IPO plans mainly because of market volatility during the global financial slowdown. The company’s current private equity investors include ICICI Ventures, Fidelity, and the New York Investment Management India Fund (see India’s Avesthagen teams with Limagrain on seed tech).

Other deals

Bengal Engineering and Science University (BESU) is set to become the state’s first university to undertake environmental initiatives within the campus, if a $4 million green technology center receives approval. The green technology center is expected to “introduce, practice and expand a sensible comprehensive strategy of green technology (including green energy and sensor systems), education and research in phases to improve lifestyle in environmentally-friendly and non-polluting ways,” according to officials. The university expects to save $10 million in electricity in four years, when the campus goes solar. The university is also working with IBM on a green building expected to use clean technologies and software, with solar energy being the main contributor to this initiative.

Russia-based energy efficiency consulting company GCE Group has shown keen interest in venturing into the Indian market through acquisitions worth $32 million in the consulting and design space. The company recently announced it expects to bring in $100 million in revenue in the next five years by operating in the oil, gas, power, and cement sectors, and plans to recruit 1,000 Indian employees in the initial phase.

Funds

Private equity firm Olympus Capital Holdings successfully raised $250 million for its Asian Environmental Fund, which is expected to invest in India and China. The fund is to target 10 to 12 specific profitable opportunities in the $20 million to $50 million range in energy efficiency, clean energy distribution infrastructure, renewable energy projects, clean technologies, waste management, water quality treatment infrastructure and pollution control (see Inside Cleantech India: Kal, Aaj aur Kal!).

The fund made its first investment in India last year, putting $35 million into Orient Green Power, a renewable energy firm (see Orient Green Power gets $55m for Indian Renewables).

Innovation

For the first time in Tamil Nadu, non-recyclable plastic waste was successfully converted to energy by the manufacturing unit India Cement (BOM:530005) at Sankar Nagar. According to The Hindu newspaper, the non-recyclable plastic waste, with a thickness of less than 20 micron, is expected to be transported to India Cement in its first phase, where it will be finely chopped and mixed with cashew shells to be used with coal in the rotary kiln as a supplement fuel.

Other news that caught our eye

Three Indian companies, Tata, SUN Group, and Praj Industries, were among 40 global firms surveyed that said they support the thesis that addressing challenges associated with climate change could be profitable for their businesses. A recent report by Dalberg, an international consulting firm, titled "Champions of the Low Carbon Economy—Why CEOs are ready for a global climate agreement," surveyed global companies and concluded that businesses are looking for a successful deal at Copenhagen to open opportunities in the "green economy."

Praj Industries Chairman Pramod Chaudhari, who is also a member of the Cleantech Group India Advisory Board, was recently quoted in the Business Standard saying he envisions Praj growing by two- to three-times on a worldwide level in four to five years, after a strong agreement and roadmap is secured from Copenhagen.

Cleantech developments making news in the past 24 hours

• Metabolix, ADM to open new bioplastics factory
• Rockwool nears construction on Indian insulation factory
• Two Israeli wastewater firms to locate in Michigan
• Al Gore: Super grid is critical to combating the climate crisis
• A quest for CO2 and O2 optimal management with biofuel from algae

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