Renewable energy-based mini-grids and microgrids are an effective and reliable source of power, especially in off-grid remote locations. Husk Power Systems is one of those select few players in the mini-grids space that have achieved significant scale. Founded in 2008 in Bihar, the company has expanded its reach in not just India but is also present in the African market. Saugata Datta, country director-India, Husk Power Systems speaks to Renewable Watch about the company’s achievements and his views on the mini-grids space in India…
What is the current total portfolio of Husk Power? What is the portfolio in India?
Husk’s portfolio of mini-grids is about 150 across India and Africa, with India making up the majority of sites numbering more than 100. Besides its core business of providing solar electricity to weak-grid and off-grid rural communities, Husk offers energy-efficient appliances for businesses and households along with financing. Husk also installs turnkey solar for commercial and industrial (C&I) rural businesses.
Who are the financiers and partners of the company?
Husk has raised a total of more than $40 million in equity since its inception, a Series C round funding from Swedfund International, Shell Technology Ventures and Engie Rassembleurs d’Energies, besides an investment from FMO. Other investors include First Solar, Acumen and The Rockefeller Foundation. Husk is currently raising a Series D funding that will fuel rapid expansion. As the cost of debt comes down, Husk is also accessing long-term, affordable debt in both foreign and local currency and expects to raise more than $20 million in debt in 2022.
What have been the key recent developments for Husk Power in the past few years?
The most significant developments for Husk have been:
- Becoming the first minigrid company to have a presence in both Asia and Africa;
- Being the first company to achieve significant scale by breaking the 100-minigrid barrier;
- And establishing a strong foothold in Nigeria – the second largest minigrid market after India.
Other key achievements of the company include becoming one of the industry’s first companies to monetise avoided emissions on the carbon market by displacing diesel generators and creating a digital technology platform, based on internet of things and machine learning, to largely automate portfolio management.
What is the company’s business model and how has it evolved over the years?
Husk sells renewable electricity to businesses and households on a pay-as-you go basis. It has integrated appliance financing and turnkey C&I customers into its business as well and is exploring a range of energy services, including drinking water and agricultural productivity.
How has the company performed financially and what are the future plans?
Husk is a privately held company and we have seen significant growth since raising $25 million in equity in 2018. Even during the Covid years of 2020 and 2021, Husk averaged a compound annual growth rate of more than 60 per cent. In India, we expect to grow our mini-grid fleet by 10x over the next five years. In early 2022, Husk signed a UN Energy Compact, committing to build at least 5,000 mini-grids by 2030, with more than 1 million connections.
In your view, what are the key challenges in India’s off-grid/ renewable microgrid sector?
India missed an opportunity to derisk mini-grids and microgrids in 2015, when a national policy was drafted but not enacted. The national policy should be revived and expanded to include not only rural villages, but also grid-interconnected Tiers II and III peri-urban towns, where discoms still struggle with reliable and quality service, and continue to operate at a deficit, amid heavy transmission and distribution losses. Private sector mini-grid developers such as Husk, which have much lower distribution losses, minimum voltage drops and customer-centric local service technicians, can be an important partner to the main grid, by reducing the burden on debt-laden state-owned distribution companies for improving service.
What are your suggestions to policymakers to solve these challenges?
Given the enormity of the investment required, the Government of India should support private operators in terms of interest subvention and provide security to banks in the form of state loan guarantees. Policymakers should also allow private minigrid companies to access existing state-owned infrastructure facilities such as distribution lines and grid support as and when required. This will not only make the power grid in towns and villages more reliable, but can also bring down the cost to customers with blended power.