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M O T I V A T I N G

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E N T R E P R E N E U R

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Nurturing GROWTH

Rags to RICHES Chennai

The Dalit CAPITALIST Business Mumbai

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Weaving DREAMS

A u g u s t 2 0Assam 13

Student STARTUP Haryana

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POWER

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August 2013

Sanjith S Shetty

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It is but natural that the person will launch his/her businesses which is eco, enviro and people friendly and that is what Sanjith S Shetty did but with a difference. He kept in mind the Corporate Social Responsibility in order to build that strong bond with the local stakeholder. Power projects based on fossil fuels like coal and gas are easy to implement since they require fewer regulatory approvals. And yet, he decided to stick to renewable energy, which has its own set of challenges, both natural and man-made. Instead of starting something else which could fetch him millions, he chose to set up mini hydel power projects in his native Karnataka state. For this, Sanjith established Soham Renewable Energy India Private Limited and conceived the first of the seven units - Ambuthirtha Power Project Limited (APPL) –at Jog Waterfalls (South East Asia’s largest waterfall), with an installed capacity of 22 MW in 2001, which started generating hydel power six years later. With the first project taking off smoothly, he decided to take on another challenge, that is to take over an abandoned but partially built hydro power project SohamMannapitlu Power Private Limited (SMPPL) - near Moodabidri in Dakshina Kannada district in November 2008. The installed capacity of this project is 15 MW. “The other five projects are in various stages of implementation with a list of ambitious line-up of

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acquisitions that we intend to make, soon. The underlying idea behind taking up them is for Soham to have a pan India footprint in the renewable energy vertical,” Sanjith, who is the Vice Chairman and Managing Director of the company, told Business for all. Sanjith’s father K Sadananda Shetty, who was former chairman and managing director of Vijaya Bank, is the Chairman of Soham. The other five “run of the river” mini hydel plants are; Mulibettu Small Hydel Project (10.5 MW) plant on Gurupur river in Moodabidri, Mahadevapura Small Hydel Project (6 MW) on the Cauvery River in Mandya district, Nekkiladi hydel project (12.5 MW) on the Kumaradhara river at Uppinangadi and Kolavuru hydel project (18 MW) on the Phalguni river, both in Dakshina Kannada district and Devaragaddi hydel project (20 MW) across the Krishna river in Yadgir district. In fact, the company has embarked to be a leader of the mini hydel power sector in the country and plans are underway to generate at least 250 MW in the next two to three years as “everything will decay and die without growth.” “So means inhalation and Ham exhalation. When both are chanted, the two align the mind and soul to give you inner strength. That is Soham for you. And what the company does is an embodiment of inner strength: operating two hydro power plants and in the process of implementing 5 other power stations,” he said. According to Sanjith, his aim is to protect, enable and equip the future generation through various CSR initiatives of the Soham Foundation. “Many firms take up CSR after the operations phase but we did it during the construction

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hat will a valedictorian at Duke University and alumni of Harvard, do to leave a foot print in our quest to leave a better world for our future generations?

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phase itself. It was not a part of its business plan but more dictated by our conscience. Till date, Soham Foundation has also managed to touch the lives of almost 9000 rural families, particularly, school-going children,� he explained. The various community Initiatives through Soham Foundation are; Vidya Ganaka: Implemented in May 2006 by setting computer labs to unleash the power of computers and the internet to an area that has not seen or experienced one with an objective to establish an enabling environment to promote the usage of Information Technology in government schools in rural areas. Under this initiative, the Foundation has reached 3250 students in 20 schools within a radius of 10-15 km around their project sites at the primary level itself so that every rural child at the primary education level can compete with the urban when they reach higher education level. This program is in partnership with the Azim Premji Foundation.

Mahatma Gandhi Hydro Electric Tail Race Scheme at Jog. (Below) Sanjith sharing his thoughts with locals

Vidya Vahana: Provided free transportation to the students in remote rural hamlets who had to cross dense forests in diverse weather conditions of scorching sun and heavy monsoon downpour to reach schools. The trek of more than 10 km to attend the school was making many parents to withdraw their children, especially girls. Though it was meant for 25 students, over 200 children are covered every day and this programme has been in operation since August 2005. Taking care of health of the rural children under the Vidya Bala Suraksha initiative addresses the problems like malnutrition including vitamin deďŹ ciencies and infectious diseases. The Foundation responds to the

basic needs and issues of the local community by joining hands with local institutions youth groups – for providing road facility, solar lights, and civic amenities, and building community awareness to tap the local resources through its programme Soham Sahayog. To build better rapport with the

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local community and also to utilize their leisure time constructively, employees are encouraged to participate in Shramdan (free Labour). Soham Jyothi was taken up to provide lighting solutions to remote areas not connected to the grid and under this program, four families

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Sanjith at an interactive session with students today have power in their houses at a time when they could not dream of having it. “Even tree plantation has been accorded priority and the company has ensured that every member of Team Soham understood the importance of conservation of nature. Every power project site of Soham is encouraged for plantation on World Environment day and their effort would provide more Green credits to concerned Team Soham,” Sanjith added. The company has also shown its understanding of the Clean Development Mechanism (CDM) space by not only being among the first to have registered the project under United Nations Climate Change Program and selling its Certified Emission Reductions (CERs) commonly known as Carbon Credits to Japan’s second largest power utility. Soham aims to soon be among the top three in the Indian renewable

“It is a great resource for all countries to tap given the longevity of the equipment and the low costs involved. It makes great sense to invest in small hydro power because of nil fuel cost and the fact that the technology today is far superior and allows for generating high PLFs (plant load factors). space and is exploring other renewable sources of energy such as wind, biomass and solar to keep the flag flying. With minimal reservoirs, small hydro does not impact the environment compared to large hydro units. The

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best part is not only does small hydro produce cleaner electricity than fossil fuels, but as the water passes through the generator, it is directed back into the stream and leaves almost no impact on the surrounding environment. “It is a great resource for all countries to tap given the longevity of the equipment. It makes great sense to invest in small hydro power because the technology today is far superior and allows for generating high PLFs (plant load factors). The other advantages include a long project lifetime, zero fuel costs, favourable government regulations that favour the private investment and the project’s focus on rural development,” he said. India is a natural home to quite a few places where small hydro can thrive like the Himalayan Region (Himachal Pradesh, J&K, Uttarakhand), the North Eastern states and the Western Ghats (Karnataka, Kerala).

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Talakalale weir He said that the Union Ministry of Non Conventional and Renewable Energy offers upfront capital subsidy and technical assistance. There is support for older projects from the central government and state subsidies for all kinds of projects, old and new. Soham is in the process of acquiring various projects in different states including Arunachal Pradesh, Meghalaya, Uttaranchal, Himachal Pradesh, Chattisgarh, Maharashtra, Kerala and Orissa. On the problems he faced, Sanjith feels that they are part of the growth story but he was undeterred by them. The government of the day should encourage companies like Soham for a greener future. “The obstacles to the commercialisation of renewable energy technologies are largely political and not technical. Besides,

the national grids are not suited to receive electricity from small sources and there is lack of proper government policies that support renewable energy. The other issues include a higher capital cost of these technologies compared to those of conventional energy, limited financing options, red tapism at the government level for the various clearances required and land acquisition,” he said. The solution to overcome these problems is that the authorities need to level the playing field and redress the imbalance of traditional approaches associated with fossil fuels. Safeguarding the environment should be made a priority, because this will ensure a cleaner, greener world. With some officers, it would be great to be innocent till proven guilty, rather than the other way around,

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as a lot of officers today feel private entrepreneurs are here only to make a quick buck and nothing else, he said. The company has raised public equity funds on four occasions, the first one in 2004 from India Clean Fund out of Singapore, second from the global hedge fund, DE Shaw in 2007 and the third time in July 2011 when a consortium of Macquarie (a large Australian headquartered fund) State Bank of India and IFC, Washington (part of The World Bank group) invested Rs 125 crore in Soham Group out of a commitment of Rs 375 crore. On the debt side, the first funding was from HUDCO, REC and Syndicate Bank. Subsequently, we confined to State Bank of India for all the existing and proposed projects with exception of one with ICICI,” he added.  (feedback@businessforall.in)

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