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BW Businessworld

When Sun And Social Get Together

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Adaptation and innovation is the mantra of the two-year-old start-up, Claro Ventures, which provides solar water pumps in power-deficit areas. Co-founders Kartik Wahi and Gaurav Kumar believe their USP is that their product aims to augment the income of the consumer. Since its launch in 2011, the company has installed 70 water pumps (2-7.5 horsepower) across Bihar for individual farmers, cooperatives and agrarian institutes.

“While we are a for-profit company, our objective is to see a greater social and environmental impact,” says Wahi. They estimate that there are about 1.5 million diesel pumps being used in Bihar. These pumps, often referred to as Peter (taken from the name of one of the popular manufacturers), use 1-3 litres of diesel per hour. Murlidhar Singh of Mubarakpur village, in Nalanda district, complains: “Peter guzzles diesel. It only has problems — broken band, some screw or nut replacement... Our expenses have increased because of this.” Singh says that on average, each farmer spends Rs 70,000-80,000 a year on diesel alone.

“The (huge) expenditure helps us promote the solar water pumps, despite the initial heavy investment,” says Wahi, adding that farmers can recover the cost of a solar pump in 4-5 years. In 2012, the duo set up a 7.5 hp solar-powered water pump on Singh’s farm. The pump facilitates irrigation for 20-22 small and marginal farmers, part of the local farmers’ cooperative.

Conscious of the possible over-exploitation of ground water, Wahi says Claro is looking to work in regions that suffer from waterlogging due to high water tables.

Wahi and Kumar have been friends since college. Having spent more time on the road than in at home, both believe their water pumps will lead to a revolution in agrarian economies.

“The demand and market are overwhelming,” says Wahi, adding that Claro is in talks with banks like National Bank for Agriculture and Rural Development, and agencies like GIZ (German Agency for International Cooperation) to try and construct different finance models such as bank-financed installation, leasing, or low-interest loans. Despite the cost of the pumps coming down by 30-35 per cent in the past two years because of government subsidies, the smallest Claro pump costs around Rs 2.15 lakh (and the largest, Rs 9.8 lakh).

The company operates on small-scale orders, procuring material and installing pumps. “There is little scope at present for us to provide financing; we don’t even have large stocks in store,” says Kumar. But in February, the new and renewable energy ministry recognised Claro as a channel partner, which means it can process and forward applications for subsidies for individual projects.

Claro started out with self-financing in 2011, and earned Rs 2.62 crore in the first fiscal. It expects to double its revenues in FY13 to Rs 5.5 crore. The total investment till now has been Rs 45 lakh. With a 25-member team, and some venture capitalists showing interest, an expansion plan is in the pipeline, says Wahi.

Amol Kotwal, associate director, energy and power systems practice at Frost and Sullivan, says Claro’s “demonstration of capability to go beyond ‘social’ applications and catering to profit-making, small- and medium-scale industrial applications can provide them opportunities to catch the eye of VCs”. But the fact that Claro’s primary clients are in the government segment may prove a deterrent for VCs, he says. Hence, Claro is keen on changing the customer mix.

It is evolving into an agrarian solutions provider. It is working on tractor-mounted installations to make a mobile solar motor; a power outlet to charge inverter batteries; and even a chip-based switch for online monitoring of water pumps.

(This story was published in BW | Businessworld Issue Dated 22-04-2013)