SREI associate ready to offer power solutions
Indian Infrastructure Equipment Ltd is all set to diversify into energy solutions for power starved industries in India and overseas.india Updated: Jun 11, 2006 12:47 IST
Indian Infrastructure Equipment Ltd (IIEL), an associate of venture capital firm SREI Infrastructure Finance Ltd, is all set to diversify into energy solutions for power starved industries in India and overseas.
Entering into power leasing solutions through its Quipo Energy Services division, IIEL sees good potential for its captive power generation solutions of 1-10 MW for short to medium term for manufacturing industries that may face a cash crunch in setting up their own plant.
IIEL is into construction, telecom, oil and gas equipment rentals.
"Last month, on May 16, we committed an investment of $20 million over the next years with the signing of a memorandum of agreement with Deutz Asia-Pacific (P) Ltd (DAP), towards the supply of gas-based power generating equipment," Hemant Pincha, Quipo-Energy Services chief executive said.
"By November, we would have created sufficient business assets for revenues to hit our registers and serve the market through 1-2 MW capacity modular equipment which can be ramped up according to the requirement of the industry."
Being portable and redeployable, Pincha sees good potential for catering to clients, particularly manufacturing companies across the country, for six months to two years.
Backed by a technical team, the power equipment leasing plan is based on the premise that it would permit the industries to study alternatives for long-term solutions without rushing in and diverting investments in setting up captive power plants instead of using funds for expansion.
"Our business plan will allow the industries to explore alternatives for gas and other fuel-based captive power generation or await affordable grid power without rushing into any investments," said Pincha.
Globally, energy equipment leasing business is estimated to be around $1.5 billion with companies like GE Energy and Caterpillar as some of the major players. Some of these are already offering services in India, though mostly using diesel generated power solutions.
Given the growing environment concerns, Quipo is looking to offer gas-based power solutions initially in Gujarat followed by Andhra Pradesh, Tamil Nadu, Rajasthan, Haryana and the northeastern states that have good gas reserves.
Plans are also being formulated to serve the overseas market from India initially and follow up with operations in Singapore and Dubai in the United Arab Emirates to serve neighbouring markets, particularly Africa.
"Ours will be a comprehensive solution to offer power at competitive prices when compared to grid power while also providing refrigeration and steam solutions using waste heat to bring the costs down," said Pincha.
Revealing that the company is already getting a good response from prospective customers, Pincha said plans for sourcing gas to operate power equipment would also see them foray into alternate sources like coalbed methane, biomass and other applications like waste-to-gas.
Expecting about Rs 60-70 million revenue in the five-month period of commencing business from November till fiscal end on March 31, Quipo Energy Services is targeting creating 8 MW captive generation by the fiscal year end, 24 MW by November 2007 and 200 MW in two years.