Investment in Innovative Biomass Gasification Technology Expands Acumen’s Commitment to Safe Energy Alternatives for the PoorMumbai, March 3, 2010 – Acumen Fund, a nonprofit venture firm addressing poverty in South Asia and East Africa, today announced a new investment in Husk Power Systems (HPS), an innovative rural electrification company that will establish decentralized power generation to remote villages in India. The company uses novel biomass gasification technology to convert abundant rice husks into combustible gases, which then drive a generator to produce electricity. Acumen Fund invested US$375,000 in HPS, adding to the US$18 million Acumen Fund has already invested in India since 2001. The new investment continues Acumen’s commitment to investing in safe energy alternatives for the poor.
“As both developed and developing nations search for alternative sources of energy in response to the growing energy crisis, we at Acumen Fund believe that investing in entrepreneurs who provide innovative energy solutions is an increasingly critical part of the solution,” said Jacqueline Novogratz, CEO, Acumen Fund. “Companies like Husk Power Systems are working to impact positively not only the environment, but to ensure that someday everyone, including the poorest of the poor in rural India, will have access to clean and affordable electricity.”
Husk plans to set up 50 systems providing electricity to 125 villages by the end of 2010 with a long term vision of deploying 2000 plants reaching 5000 villages and over 20 million individuals, while creating 6000 jobs. HPS tackles the challenges faced by the rural villages in the region by providing clean, safe, and efficient electricity at affordable rates. A plant is installed along with low-voltage insulated wiring to each household, business, or farm, with Husk Power Systems charging subscription fees to each user according to the number and type of the electrical appliances they own.
“We pride ourselves in providing affordable and reliable electricity to rural areas at the lowest installation, distribution cost per watt and having intimate local knowledge and the expertise to manage relationships with each village,” said Gyanesh Pandey, Co-Founder and CEO, Husk Power Systems. “Our goal is to have our model help to deliver rural electrification to India’s villages and eventually to rural areas around the world.”
In rural India, 56% of households lack electricity, with at least 25,000 Indian villages declared by the Indian government “economically impossible” to reach via conventional means. The electrification of rural India has been extremely uneven, leaving without electricity 80% to 90% of poorer states in India's “Rice Belt,” like Bihar, Uttar Pradesh and Orissa. Villages in this region currently use kerosene lanterns for household light and diesel generators for irrigation and commercial power, which are both costly and environmentally destructive. To keep costs low, HPS wires each village using bamboo poles and low-voltage wire. When necessary, they provide appliances to run on the new electric connections, particularly highly-efficient compact fluorescent bulbs and, in some cases, electric irrigation pumps to replace the existing diesel pumps.
“With Acumen’s investment in Husk, our energy portfolio now includes companies that are using solar, hydro and biomass to bring clean and affordable electricity to the poor,” said Raj Kundra, Acumen’s Energy Portfolio Director.
“Acumen Fund invests in businesses that have the potential to scale and make a lasting social impact,” said Varun Sahni, Acumen Fund’s India Director. “HPS will have a significant social and economic impact on the villages, from improving education by extending study hours after dark, to fueling local enterprise and industrial growth, and bringing a higher quality of life through access to information and increased productivity. We look forward to sharing the knowledge we gain from our investment in HPS with the rest of the world as we work to bring safe and reliable energy to the poor.”
About Acumen Fund
Acumen Fund is a nonprofit venture fund that invests in market-oriented approaches to deliver critical, affordable goods and services to the world’s poor. Acumen Fund focuses on the convergence of philanthropic capital and business expertise to produce sustainable, scalable enterprises that reach underserved markets and increase access to the opportunities of the global economy. For more information on Acumen Fund’s activities and investments, visit www.acumenfund.org and www.acumenfundblog.org.
Acumen Fund in India
Acumen Fund has been investing in India since 2001, focusing on a wide range of sustainable, scalable businesses that use market-based approaches to deliver products and services to millions of rural and urban poor. Investments made by Acumen Fund India in local enterprises include high-quality maternal and pediatric healthcare services; safe water for consumption and livelihood; and clean energy. Leveraging strong relationships with local academic institutions and businesses as well as the global Acumen Fund network, Acumen Fund India is actively exploring further investments in healthcare services, as well as potential investments in housing and energy services.