Kalkitech 1

SUMMARY OF PROPOSED INVESTMENT

This Summary of Investment Information (SII) is prepared by IFC to disclose a factual summary of the main elements of the potential investment. Its purpose is to enhance the transparency of IFC’s activities. For any project documentation or data included or attached herein that has been prepared by the project sponsor, authorization has been given for public release by the project sponsor. IFC considers that this SII is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein.
It is distributed in advance of IFC Board of Directors’ consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision.

Project number 31750
Company nameKalkitech
CountryIndia
SectorEnergy Efficiency
Environmental categoryB
Date SPI disclosedMarch 23, 2012
Projected board dateMay 15, 2012
RegionSouth Asia
DepartmentReg Ind, Infra & Nat Res, ASIA
Date revised SPI disclosedMarch 23, 2012
StatusActive
Previous EventsInvested: September 6, 2012
Signed: May 31, 2012
Approved: May 4, 2012
Overview

Project description
Kalkitech is a technology company providing products, services and solutions that monitor, manage and optimize energy generation and transmission assets for public utilities and industrial clients across the world. The Company was founded in 1998 and is headquartered in Bangalore.
The Company operates in the IT services and system integration space but also generates revenues from sales of its SYNC and ELTRIX hardware and software product lines. In addition to selling these products directly to utilities, Kalkitech also provides ELTRIX and SYNC solutions to OEMs who bundle these products with their systems to implement solutions for utilities.

Sponsor/Cost/Location

Project sponsor and major shareholders of project company
The sponsor is a public limited company. Its key promoter and management personnel are:
Prasanth Gopalakrishnan – Co-Founder & CEO: He has more than 16 years of experience in the Communication System Research and Product Development. His areas of specialization are standards based communication and optimization technology leadership for the energy and utilities space.
Sushil Cherian – Co-Founder & CTO: Mr. Sushil Cherian, has more than 16 years of experience in Control and Automation Systems, especially in the Power and Oil & Gas Industries. His areas of specialization are Dynamic Controls and Non-linear Systems.
George Punnoose – COO: Mr.George Punnoose has more than 27 years of experience in the Power Industry. He is responsible for the Company’s operations.
Sunil Vargis Mathew – President: Mr. Sunil Vargis Mathew has more than 16 years of experience in the Electrical Industry in implementing Sub-Station Automation, Energy Management and Control and Automation solutions.
Sreeni T S – VP Sales and Marketing: Mr. Sreeni T S has more than 12 years of experience in different positions, the last 6 years of which has been with Kalkitech.

The ownership of the Company is closely held by the promoters & management along with their family and friends.
Total project cost and amount and nature of IFC's investment
The total equity financing required by Kalkitech is US$4.5 million for new product development and to grow the Company’s business development capabilities in new and existing markets. The IFC proposes to provide US$1.35 million in the form of a quasi-equity or convertible instrument. The GEF South Asia Clean Energy Fund, L.P. (“GEF SACEF”) has proposed to invest US$3.15 million alongside the IFC. The IFC is currently invested in GEF through its US$10 million commitment to the Fund. Additionally, IFC & GEF SACEF may finance a second round of US$ 2 million and third round of US$ 5 million equity for use in further business development activities.
IFC investment as approved by Board
1.28 million (USD)
Product LineIFC Investment (million USD)
Risk Management 
Guarantee 
Loan 
Equity1.28

* These investment figures are indicative
Location of project and description of site
The Company has its headquarters in Banglaore and a product development centre in Kochi, India. There is no location specific concentration of its customer base.

Development Impact

Expected Development Impact
The Project is expected to have strong development impact by way of the following:

(a) Improve energy efficiency: Kalkitech's integrated software and hardware technology solutions for the T&D segment will contribute significantly to optimize energy efficiency by providing technologically advanced solutions to utilities and other industrial customers in a market characterized by acute energy transmission and distribution inefficiency.
(b) Improvement in quality of electricity to consumers: The key benefit expected to be delivered to end-consumers is the significant improvement in grid performance and delivery of electricity through fewer power outages, improved power quality and better management of load and electricity.
(c) Support changes in regulatory environment: There is significant traction developing in the power sector in terms of regulations such as Availability Based Tariff, Merit Order Dispatch, Open Access and power trading; sales of Kalkitech's ELTRIX products will help ensure better compliance with this new regulatory environment.
(d) Creating employment opportunities: New applications of advanced communication and information technologies will provide employment opportunities to the large and growing pool of software and technology professionals in India.

IFC's Expected Role and Additionality
a) Financing and signaling: Small-cap technology-focused companies operating in the electricity transmission and distribution segment are relatively new to the Indian market and fund-raising from conventional sources is likely to be challenging. IFC equity participation will send a strong signal supporting both the industry segment and the company; this will likely help complete financing of this project, as well as assist with any future fund-raising.
(b) Access to IFC resources: The Company is essentially an early stage technology-driven SME operating in the power and gas utility space. The IFC will provide the Company access to resources that will help to support its growth, including specific value-added knowledge in the Power and IT sectors, as well as resources that have recently been developed by the organization in the still nascent emerging market smart-grid sector.
(c) E&S: IFC involvement with the Project will help Kalkitech adopt a structured framework to manage its social and environmental systems, which will act as a benchmark for its projects and the broader private T&D segment which is still in its infancy in the region.



E&S Risks / Impacts and Mitigation

Environmental & Social Categorization Rationale
This is a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects.

Key E&S issues associated with the Company’s activities include: environmental and social (E&S) impacts of office areas such as solid waste (particularly e-waste) management, energy conservation, human resources management, and worker health and safety and security issues.

Further details on the potential environmental and social impacts of the project, corresponding mitigation measures and guidance on how and where information about the project is provided is given in the Environmental & Social Review Summary.

To view the environmental documents for this project, click here






Contacts

For inquiries about the project, contact:
Mr.Prasanth Gopalakrishnan, Chief Executive Officer
Kalki Communication Technology Pvt. Ltd.,
Corporate Headquarters, #147, 5th Main Road, HSR Layout Sector 7, Bangalore 560102, Karnataka, India.

For inquiries and comments about IFC, contact:
General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster
Local access of project documentation
Kalki Communication Technology Pvt. Ltd.,
Corporate Headquarters, #147, 5th Main Road, HSR Layout Sector 7, Bangalore 560102, Karnataka, India.

Supporting Documentation