The Netherlands Development Finance Company, a public-private partnership also known by its Dutch acronym FMO, recently disbursed a loan of USD 5 million to Husk Power Systems, an India-based startup that builds small-scale electricity generation and distribution networks in rural areas of India and Tanzania. These minigrids use biofuels made from the waste products of processing rice and maize.
“Not only will the investment be a catalyst for Husk to achieve its ambitious minigrid roll-out plan, it gives us a partner with deep knowledge and experience in scaling innovative energy technology companies like Husk Power to focus on promoting productive uses of energy,” said Husk Power CEO Manoj Sinha.
“FMO considers minigrids as the key to unlocking a successful rural distributed energy sector, both off- and under-the-grid, as it brings affordable and reliable clean power to MSME’s [micro-, small and medium-sized enterprises] and residential customers in rural areas in developing markets,” said FMO Principal Investment Officer Keesjan de Kruijf.
Founded in 2008, Husk Power has provided electricity to approximately 120,000 customers in India and raised a total of USD 25 million over four rounds of funding since 2010. The latest of these was a 2018 Series C round totaling USD 20 million led by Shell Ventures, the Netherlands-based corporate venture capital arm of Royal Dutch Shell. Other investors include Swedish government’s Swedfund International and France-based venture capital fund ENGIE Rassembleurs d’Energies. Data on the firm’s operations in Africa are not available.
Established in 1970, FMO is 51-percent held by the Dutch government and 49-percent by private sector institutions. The institution works toward the UN’s Sustainable Development Goals by funding capacity development as well as placing debt and equity investments in sectors such as agribusiness, financial institutions and energy. During the six months ending June 2020, FMO lost EUR 280 million (USD 330 million) on a total portfolio of EUR 12.7 billion (USD 14.9 billion).
By Kate Finster, Research Associate
Sources and Additional Resources
Husk Power press release
https://huskpowersystems.com/dutch-development-bank-fmo-spotlights-husk-power-as-energy-disruptors-invested-us-5-million-in-minigrid-developer/
Husk Power homepage
https://huskpowersystems.com/
FMO June 2020 interim report
https://annualreport.fmo.nl/2019/interim-report-2020/letter-from-the-management-board
Previous MicroCapital article on FMO
https://www.microcapital.org/microcapital-brief-fmo-loans-15m-to-pgmf-of-myanmar-for-microcredit-covid-19-relief/
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