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Friday, June 21, 2024

Artha Energy Resources helps investors boost investment in renewable energy

Artha Energy Resources has developed a platform that allows investors to become partial owners of renewable energy projects in exchange for acceptable profits.

According to the India Energy Outlook, India’s energy consumption is expected to rise by about 50% between 2019 and 2030. With growing understanding, people are preferring to generate energy from greener sources such as solar or wind. Artha Energy Resources, situated in Mumbai, aspires to achieve this.

The platform of Artha Energy Resources allows investors to participate in renewable energy projects with as little as Rs 20 lakh. Anirudh Damani and Nitish Mehta created Artha Energy Resources in 2013. Anirudh Damani’s brother, Animesh Damani, joined the firm as a managing partner in 2017.  While the public sector dominates the energy business in India, both in power generation and power transmission, few private producers remain.

It began by mapping India’s whole renewable energy picture in terms of demand and supply. This meant that there was no detailed mapping of different energy generating factors, such as where energy was created, how it was transmitted, who was using it, what the tariffs were, government contracts, and so on.

Artha Energy mapped this data over four to five years. Animesh claims that the database it produced provided the team with insights on the country’s energy scenario, which they utilised to give cost-effective and efficient solutions to its clients.

As an example, he claims that if someone wants to build a rooftop solar project in a specific city, Artha Energy can simulate all of the alternatives in their database and deliver the best answer.

He also says that their mistake rate is below 0.2%.

The firm began by providing consulting services, mostly to renewable energy producers headquartered in North America, and has since created projects totaling 250 MW in India, Sri Lanka, Nepal, and Japan. These include solar, wind, hydro, biomass, and so on.

Artha Energy began with a windmill project and then expanded into the rooftop solar market, which today accounts for over 90% of its operations.

It is involved in project consultation, engineering, procurement, and construction (EPC), as well as project maintenance and operations. The majority of the startup’s clientele are industrial and commercial enterprises.

Artha Energy is now present in over 11 states, primarily in northern and western India. It has completed 250 MW of projects through the consultant route, 45 MW through EPC, 55 MW through operations and maintenance, and around 10 MW that it owns. In addition, the business has created its own software stack to monitor renewable energy plants.

The following stage will be to investigate energy monitoring or usage at the individual unit level. Artha Energy has expanded its involvement in bringing additional investors into the renewable energy sector by launching a second company named Renewshare in January of this year.

“We intend to make renewable energy projects more accessible to HNI (high net-worth individual) investors and to reintroduce domestic money to the industry,” Animesh explains.

Renewshare creates a special purpose vehicle (SPV) for these initiatives, which is similar to a portfolio of assets, and investors can hold a portion of the SPV. Given the high cost of establishing renewable energy facilities, this permits investors to participate. eHe argues that the firm is profitable.

Because renewable energy projects are more long-term in nature, the startup claims predictability. According to Animesh, Artha Energy has more than Rs 7 crore in assets under management (AUM) in Renewshare and claims to have received more than Rs 10 crore in investor commitments.

“We’d like to provide a fixed income asset class with a 12-14 percent yield,” Animesh explains.

Artha Energy has expanded largely through internal accruals and cash flows, with no outside capital while claiming to be profitable.

According to Animesh, the startup’s revenue increased nine-fold in FY22 compared to FY21, and it expects a seven-fold increase in the current fiscal year. This year, it intends to add around 7-8 MW of electricity.

The main problem that Artha Energy foresee is mostly on the regulatory front, as India’s renewable energy sector is still evolving.

“We will focus on Renewshare as a model,” Animesh adds, “but it is still early days for renewable energy developing as an alternate investment class.”

Artha Energy Resources competes with companies such as Vikram Solar, Orb Energy, Suryauday, and others. According to the Ministry of New and Renewable Energy, India’s solar capacity has expanded in the previous 7.5 years from 2.6 GW to more than 46 GW.

Renewable energy accounts for 26.53 percent of the country’s total installed generating capacity.


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