BT Exclusive: India to become a global energy player with green hydrogen, says FIG’s Chatila

 

India has the potential to become a global energy supplier like Saudi Arabia or the US with green hydrogen, promoter of US-based venture capital firm Fenice Investment Group (FIG), Ahmad Chatila has said.

“In energy transition technologies, you need three things. You need human capital, land and natural resources like sunlight and wind speed, and capital. India has the first two in abundance. So, India can do 1 to 2 terawatts (TW) of wind and hydrogen. No questions there,” he told Business Today during an exclusive interaction in New Delhi.

To get around the high cost of capital, the Lebanese American had an interesting suggestion – the introduction of dollar-denominated tariffs for solar energy. 

“In India, the cost of construction of solar is low but the cost of capital is extremely high. Because of that, hydrogen is not cost-effective. But guess what, since we import energy in dollars why not pay ourselves in dollars instead of paying them to someone else? Today, the cost of solar in India which is around Rs 2.50 will become 1.50 paise. And that’s a big impact!”

Although dollar denomination was not generally recommended for a strategic sector like energy, India must look at this option as it needed to break the cycle of spending billions in hard currency on oil & gas imports, he suggested.

Praising the first phase of the green hydrogen policy announced by the central government in March, Chatila cautioned that the country would have to take every care to protect the interests of the domestic industry.

“We need to set certain production targets. Also, we need to protect the indigenous industry so that we don’t repeat the same mistakes we did in solar and batteries, where we are now reliant on other countries,” he remarked.

Upbeat on India’s green hydrogen potential

Chatila was very upbeat about the growth prospects for the green hydrogen sector. He said, “India is naturally going to bank very hard on green hydrogen. As projects get launched and there are some visible successes, you will have an increasing number of players entering the scene.”

Chatila was in India for meetings with government officials and senior executives of energy companies about the group company Ohmium’s green hydrogen plans. In April, Ohmium closed $45 million Series B financing to support plans to quadruple hydrogen production from 500 megawatt (MW) to 2 gigawatt (GW) annually by end of 2022. The hydrogen will be exported to industries in ammonia, green steel and refining in Europe and the Middle East.

Chatila, the former CEO of the US-headquartered solar power company SunEdison, was once the toast of global clean energy circles. In April 2016, when SunEdison filed for Chapter 11 bankruptcy protection under US law over a series of bad acquisitions and an $11 billion debt, he was panned by the American business press for his bravado and poor decision-making skills.

On being asked about that phase in his career, he told BT, “I bankrupted the company. That was entirely my fault and no one else’s!”

It was then that Chatila launched the FIG, an investment vehicle. Incidentally, Fenice means phoenix in Italian. “People have helped me build FIG into a portfolio of companies. Because of the limited successes that I have had in the last five years, I get a significant amount of deal flow coming my way,” he said.

Since then Chatila has not only built a portfolio of more than a dozen energy transition-focused investments like Ohmium and assisted in the transformation of energy technology player Enphase energy but also helped revive SunEdison. The FIG group companies have 90 per cent of their workforce in India, which serves both as an R&D and manufacturing hub.

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