International Finance Corporation (IFC), the private investment arm of the World Bank, is investing $1.25 million (around Rs 5.5 crore) in Husk Power Systems (HPS), a Patna-based company engaged in rural electrification and power generation. IFC will take final decision about the investment plan in its board meeting scheduled on May 10, 2010, VCCircle has leant. However, the quantum of stake that IFC will pick up in Husk Power could not be ascertained.
The investment follows last month’s $375,000 (Rs 1.71 crore) funding from Acumen Fund, a non-profit venture capital fund in New York. HPS plans to utilise the fund to expand new projects targeting 100 plants mark in the next one year.
HPS is engaged in producing clean energy from rice husks using biomass gasification technology, and provides electricity to rural Indians in a financially sustainable and scalable manner. It currently owns and operates mini power plants with a capacity to produce 35-100 KW electricity, and has about 25 plants spread across Bihar.
HPS has earmarked a big investment plan and is expecting over 1,000 new installations in India. It plans to spread domestic operations and will foray in states including Uttar Pradesh. It also plans to start pilot installations in other geographies including Nepal, Indonesia and Cambodia over the next five years. HPS targets 2,000 plants to cover 5,000 villages and over 20 million individuals in the long term.
The company plans to finance the projects through a mix of equity and debt. It is presently in the midst of raising its pre-series A funding to fund its first 100 villages in 2010. IFC will also consider providing further equity and debt financing to HPS for its expansion beyond 100 plants.
HPS has earlier got $250,000 investment from DFJ and Cisco as part of Global Business Plan Competition for university and business school students. Shell Foundation, a UK-based organisation funded by petroleum major Shell, has also invested in the company. Its founders include University of Virginia, Darden School of Business 2009 graduates Chip Ransler and Manoj Sinha. The other two founders are Gyanesh Pandey and Ratnesh Yadav.
IFC has been investing in India for sometime now and has already made a few cleantech investments as well. Some of its portfolio companies in power sector in India include Azure Power India Pvt Ltd, Auro Mira Energy Company Private Ltd (AME) and Bhilwara Energy Ltd.
It has recently announced more investments in renewable energy focused private equity funds, and has received additional $150 million allocation for clean energy investments in emerging markets.