Foreign companies eye clean technology projects in India

Western companies are in the race for slice of the lucrative market for clean technologies such as renewable energy and water or soil treatment projects in India and China, which corporate leaders say will be worth trillions of dollars in a few years as the Asian giants grapple with rising oil prices and pollution.

Companies are excited about business prospects in India, which has announced a $20-billion plan to build 20,000 MW of solar energy capacity in the next decade. The Asian country has levied a tax on coal to fund green projects, and is struggling with high oil prices at a time when the country's dependence on imports is projected to rise to 95%of demand in 20 years from about 75% now.

"The good news is that Indians are responding aggressively to the challenge of environmental sustainability through a clean-tech revolution. There is real meat on the bones," said Nick Parker , chairman of the Toronto-based Cleantech group, a respected market intelligence firm, which advises investors and corporates on trends and technologies to combat global warming, pollution and renewable energy solutions.

He said rising oil prices would eventually create a balance-of-payments (BOP) crisis for India, which would catalyse policy initiatives in the renewable energy sector just as a crisis had helped India abolish industrial licensing and paved the way for a boom in the export-oriented software sector. And rapidly-urbanising China has already committed hundreds of billions of dollars for clean technology, he said.

Canadian companies expect huge opportunities when India takes serious steps to combat soil and water pollution - an area of expertise for firms based in the country. Western companies expect India to undertake projects to reverse the severe degradation of soil by the relentless use of chemical fertilizers and pesticides, triggering calls for a more sustainable green revolution in various parts of the country.

"The opportunities are humongous," said Jim Constant, chief executive of Ozomate, a company that specialises in patented waste-treatment technologies using ozone. "India is way behind everybody on ozone. It's a huge potential market," he said.

He said market was gigantic because in Montreal alone, which has a population of barely 2 million, the total cost of water treatment plants is estimated to be $2-3 billion, including half a billion in one project alone, Ozomate's Mr Constant said, adding that there were only a handful of companies that had the expertise, scale and experience required for such projects.

"The scope for collaboration is staggering," said Shaun Wedick, Canada's consul and senior trade commission based in Chennai.

Parker, who has pioneered "sustainability-driven" private equity funds and had founded an environment finance firm during his 15 years in the financial world, said a lot of money was already flowing into clean technology projects. He said venture investments in local Indian clean-tech companies totalled over $800 million in the past four years and are rising, while globally, the number of IPOs to fund such projects had risen dramatically, particularly in China.