An innovative and zero waste production process which is the first step towards large scale access to “green” silica
FMO, the Dutch development bank and the German development finance institution DEG- Deutsche Investitions-und Entwicklungsgesellschaft mbH- signed a transaction with Usher Eco Power Limited (“Usher Eco”) for a USD 28 million Senior Secured Loan (shared equally between DEG and FMO). Furthermore FMO has subscribed to non-convertible debentures of the Indian rupee equivalent of USD 7.5 million issued by Usher Agro Limited, the parent company of Usher Eco. Alpen Capital India acted as financial advisor for both Usher Eco and Usher Agro.
Usher Eco will use the financing to establish the world’s first commercial scale silica extraction plant for producing “green” high quality precipitated silica from rice husk ash. This ash is generated by burning rice husk (outer cover of the paddy) in the boiler of a rice husk fired biomass power plant, in a closed system. Furthermore Usher Eco will use the financing to expand its rice husk based waste-to-energy facility from 16 MW to 34 MW.
The “green” silica extraction process is the result of close collaboration between the open innovation team of Goodyear Tire and Rubber Company (“Goodyear”), the Indian Institute of Science Bangalore and Usher Eco. The produced silica will be used by Goodyear to replace carbon black and traditional silica in high performance tires. Compared to carbon black and traditional silica “green” silica reduces rolling resistance. Lower rolling resistance, in turn, results in savings to the end-user as it improves a vehicle's fuel economy.
"At Usher we have a vision of Zero Discharge and extraction of silica from rice husk ash is one more step in this direction. We call this silica “green” as it reduces the carbon foot print and is also in line with the vision of our honourable prime minister Zero Effect and Zero Defect policy for manufacturing sector" says Dr. V. K. Chaturvedi, Managing Director of Usher Eco.
Dr. Surendra Chawala Director at Goodyear USA said: "Silica produced from rice husk ash will have positive impact on environment and will help in reducing carbon foot print. We have also signed a supply agreement with Usher Eco Power for the off-take of silica so produced from RHA".
FMO classifies this as a green transaction due to the closed-loop production process, resulting in zero waste. The production process is depicted above and can be described as follows: (i) paddy milling creates rice and rice husks; (ii) Rice husk (biomass) is used to generate energy; (iii) the ensuing ash is used as an input for silica extraction. The silica extraction process allows extraction without using aggressive chemicals and at significantly lower temperatures than under the conventional process; and (iv) the remaining waste product can be applied as fertilizer.
This landmark transaction is a first and innovative step towards large scale access to “green” silica and contributes to co-generation in the energy-deprived state of Uttar Pradesh in India.
“A core focus of FMO is to support agribusiness development in a sustainable and responsible manner”, said Suzanne Gaboury, FMO Director of Agribusiness. “This unique project incorporates these goals through the implementation of sustainable environmental, social and governance practices while creating a viable long-term and green business.” “We are proud to be a part of this transaction which we see as an example for similar businesses in the future.”
Hubertus Pleister, Director Corporates Asia at DEG, said: “DEG is excited to partner with FMO in this innovative investment in India. The project contributes to our strategy of supporting projects in future markets and in the sector of renewable energy. We are happy to support the vision of Usher Eco on expanding on their “green” approach of using rice husks as a green energy supplier by also extracting silica from the ashes after which the ash can be used as fertilizer.”
About FMO
FMO (the Netherlands Development Finance Company) is the Dutch development bank. For 45 years, FMO has been investing in the private sector in developing countries. We believe in a world in 2050 where nine billion people can live well and within the boundaries of the planet. In pursuit of this vision, our mission is to empower entrepreneurs to build a better world. We specialize in sectors where we believe our contribution can have the highest long-term impact: financial institutions, energy and agribusiness. Alongside partners, we invest in the infrastructure, manufacturing and services sectors. With an investment portfolio of EUR 8 billion, FMO is one of the largest bilateral private sector development banks. www.fmo.nl
Press contact:
Paul Hartogsveld
Senior Marketing & Communications
T: +31 70 314 9928 M: +31 6 11589127 E: p.hartogsveld@fmo.nl
