January 31, 2014
It all started with matching making a critical need to a major opportunity. Two childhood friends in India figured out a brilliantly simple way to convert rice husks, which were usually discarded during the milling process, into clean electricity.
The duo then teamed up with two go-getter grad students from the University of Virginia, who developed a plan to turn the engineering experiment into an energy business.
Together, they formally launched Husk Power Systems with their own capitol and prize money from various business plan competitions. And then came a little investment from Uncle Sam via the Overseas Private Investment Corporation (OPIC), which provided Husk with $750,000 in debt financing to help the young start-up expand.
OPIC operates in some of the poorest and least developed parts of the world, not only because it is the right thing to do, but because these areas also “offer such promise for a strong return on investment,” aka, the smart thing to do.
In just four years, Husk has installed over 84 mini-power plants, reaching more than 200,000 people in remote parts of India. The means more children can to do their homework at night, and the villagers have reported an overall sense of security and a decline of dog and snake bites – all the while generating income from electricity sales.
One of the two UVA Darden Business School graduates and current Husk President, Manoj Sinha, describes OPIC’s funding as “a game-changer for us.”
Why exactly, you ask?
“OPIC proved that a project like this was debt financeable, and could therefore offer attractive returns for venture capitalists and more conservative investors, by leveraging assets,” says Manoj. “OPIC proved to be a real shot in the arm for us.”
Since linking up with OPIC, Husk has brought on new private sector investors and is currently in the process of expanding to East Africa in partnership with USAID as a part of the U.S. government’s new Power Africa initiative.
Oh, and this investment is also a winner for U.S. taxpayers. Because OPIC collects fees and interest from its investments and other products, the agency is essentially self-sustaining, not to mention the fact that OPIC generated over $400 million in income last year. Helping to reduce the Federal deficit is so in right now!
You can see why we highlighted the OPIC-Husk partnership during our all-star event in Richmond earlier this week, and why we are looking for other Husk-like stories in other states all across the country.
Know any start-ups who partnered with a U.S. development agency? Are they bringing an innovative approach to solving a critical development need, while providing a solid return at home? If so, let us know because we might just be coming to your town later this year!