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Summary:

City waste is an emerging source of clean power in India. Next month a company called Ramky Enviro Engineers plans to conduct a $200 million IPO and will use the funds to build a power plant that uses municipal waste as fuel.

Indian waste to power

An Indian company which plans to build a power plant that runs on city waste will aim for a $200 million IPO next month, according to a report from Bloomberg. The company is called Ramky Enviro Engineers, and it’s backed by the private equity arm of Standard Chartered.

India asks its carbon-intensive industries — like power generation and mining — to get 10 percent of their yearly energy quotient from clean sources. The regulations currently aren’t widely heeded, but the Executive Director of Ramky Enviro Engineers, Goutham Reddy, tells Bloomberg that he thinks that the government will soon get much more strict about environmental regulations.

The growing amount of waste in India can be a valuable resource. India has a population of 1.2 billion and an increasing amount of those people are living in cities. India’s cities now generate 55 million tons of solid waste and 38 billion liters of sewage per year, according to consulting firm Energy Alternatives India and cited by Bloomberg.

ewaste

The waste per capita is also rising in India as GDP grows. The rapidly growing Indian middle class will soon want to consume similar amounts of power to the U.S. and Europe, and that will require a massive power infrastructure build out in the country. India plans to add 100 GW of power generation over the next several years, and that will be made up by mostly coal and clean power.

The Indian government is infamous for setting lofty goals and then coming up quite short of those numbers. “Aspirational goals” is what many call them. For example, the Indian government has a top-down plan to deliver 20 GW of solar across the country by 2020. We detailed some of the realities of the growing pains of the Indian solar market here.

If Ramky Enviro Engineers raises the funds it wants in an IPO, it will spend close to $100 million on a 48 MW waste to energy plant in Hyderabad. The company is already profitable off of its waste management business. U.S.-based Waste Management has also been interested in waste to power plants.

Waste to power plants are still rare in India. They are more common on European countries like Germany. Agnion Energy is a German startup that has developed a gasification process that can turn trash into energy.

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  1. IT’S A GOLDMINE out there ….. you really gotta believe .Given the careless attitude of Indians and the constant rise of population ,if this project kicks off it would really make a BIG difference in the sociological and ecological aspects of Indian civilization.

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  2. Ain’t it easy to stereotype, it’s like the argument by Taleb in his book on Black-Swans with every substantiating claim how the perception reinforces to a self fulfilling prophecy.

    Coming to the point, Katie has nicely highlighted an effort to try something new. Word of caution for any potential investors is to take a serious look into their books and the very company’s existing waste treatment plants. Typical operating Debt/Equity for new projects in India are around 70/30 and so if you look at it then ~$460MM has to be raised either through internal funds or by debts from institutions; so the net cost for the project is may be around $660MM for a 48MW, which is far higher than typical thermal/wind/solar plants, which then raises the question of who are the customers willing to pay a huge unit cost. Or even going by the claim of $100MM for 48MW plant, questions should raise about what about the other funds and how are they plan to be parked or utilized? Hope it is not another trick to raise cheap liquidity. All that said, if my skepticism is creating an impetus to derive the real truth even at the cost of proving me wrong I will be glad, as then investors will know they are about to get their returns safe.

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  3. Reblogged this on NikiVallwaysMyway and commented:
    “waste not, want not” it is really hard to not be able to think of at least ONE more use for everything we have!

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  4. What gives you the impression that trash is “clean” power? It’s about as dirty as it gets. Burning toxic substances? Smart move. Burning valuable metals? Clever. Burning giant piles of perfectly recyclable materials? Yeah .. clean.

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  5. My gut says it will certainly be “cleaner” power. My visit to India, last year, nearly brought tears to my eyes…Tears from stinging eyes caused by smog. People were burning their trash in their front yard…plastics and all. If that same trash gets an economic value, it can be burned much more cleanly and be put to some use.

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