Husk Power Reaches Profitability in Q4 2022
Husk Power Systems announced that it has become the world’s first minigrid company to achieve profitability across Asia and Africa continents.
January 24, 2023. By Manu Tayal
The company pioneered the first renewable energy minigrid in India in 2008 and now operated the largest fleet of community minigrids across Asia and Africa.
It became EBITDA (earnings before interest, taxes, depreciation, and amortization)positive during the fourth quarter of 2022 in its two primary markets i.e. India and Nigeria.
The company in a statement said that "by achieving profitability, it has sent a clear signal to the market that rural minigrids are a fully bankable asset class, as well as an important contributor to net-zero growth for more than 3 billion people – and countless small businesses and farmers – that are still without access to reliable electricity in rural Asia and Africa."
Husk has more than 150 minigrids in operation in Uttar Pradesh (UP) and Bihar states, serving over 10,000 customers, majorly rural businesses that previously relied on diesel generators because of unreliable DISCOM power. These minigrids allowed businesses, schools and health clinics to switch to solar power, making a significant contribution to the country’s energy transition goals.
Commenting on the company's achievement, Manoj Sinha, Co-Founder and CEO of Husk Power Systems, said "When I took over the reins of Husk in 2014, we underestimated the amount of time and effort it would take to discover the right business model, right team and right technology platform to build a commercially viable minigrid company on two continents.”
“It took grit and innovation to arrive here – at a profitable and scalable minigrid company,” Sinha added.
Moreover, the company is expected to grow 10X to more than 1,000 minigrids over the next several years in India.
The profitability milestone was achieved on the back of two major factors:
1) Husk’s unique platform approach, which addresses the entire rural energy ecosystem (besides electricity and appliance sales, it also installs rooftop solar for businesses, and offers energy-as-a-service for drinking water, agro-processing, etc.).
2) Its relentless focus on technology and business innovation, which has allowed Husk to boast the lowest cost of delivered energy and highest average revenue per user in the industry.
The company pioneered the rural minigrid 15 years ago using waste biomass gasification, and in 2017 followed up with the industry’s first solar hybrid minigrid. Since then, the World Bank and International Energy Agency have both recognized the central role of solar minigrids in ending energy poverty by 2030. It is estimated that between 100,000 and 200,000 minigrids need to be built before the end of the decade.
On the company's business model, Brad Mattson, Board Chairman, Husk Power Systems, commented "Husk has proven that the rural minigrid business model works, in Asia and in Africa, and in off-grid, under-the-grid, and grid-interconnected communities. It works and it is robust."
"We have already scaled 10X, and are poised to scale another 10X. We urge the industry to embrace the roadmap Husk followed. If funders and governments embrace the minigrid sector and this roadmap for success, together we can not only end energy poverty, but also lay the foundation for a rural industrial revolution."
Meanwhile, the company achieved corporate profitability in India and Nigeria against a backdrop of severe market disruption caused by Covid-19, global inflation and rising costs of capital, demonstrating the resilience of the company’s business model.
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