According to reports, they met through LinkedIn, one of the social networking sites. Got in touch with each other and in a few months, they had formed a venture that helps clients make money from a still nascent business – that of trading certificates they get in lieu of the energy they generate from renewable sources.
This is Vishal Pandya, Director, REConnect Energy Solutions, who, at 28 years of age, has established himself and his company in the renewable energy space. He founded REConnect Energy Solutions jointly with Vibhav Nuwal, 32.
It was Vibhav, says Vishal, who located him on LinkedIn, dropped him a mail, they corresponded with each other and then decided to start their journey as entrepreneurs together.
Companies that generate electricity from renewable sources are eligible to get what are called Renewable Energy Certificates (RECs), which they can trade in through the designated exchanges and make additional money. This industry is still at an early stage in India. As people became more aware of the need to encourage Green power, electricity regulators made it mandatory for distribution companies to source a fixed quantity of the electricity they sell, from renewable energy sources. States that did not have the potential for Green power sources, could buy these certificates to show their compliance.
REConnect, as the name of the company itself shows, is a take-off on the renewable energy certificates. It helps clients register their certificates, trade on the exchanges and make money.
Vishal, with a postgraduate qualification in power systems from IIT-Bombay, worked with the Indian Energy Exchange, where he was responsible for various promotional activities under the REC. Vibhav, a chartered accountant and an alumnus of Columbia Business School, was working with a company that dealt with carbon emissions. Vibhav knew the market-based mechanisms, while Vishal had the technical knowledge.
The two incorporated REConnect in September 2010, with an investment of Rs 45-50 lakh, from their own funds and that borrowed from family and friends. Vishal and Vibhav own the company, with family and friends from whom they raised funds being given preference equity. “The journey took off well, the market was slow. Initially, we had problems in managing the cash flow,” says Vishal.
They had a small team and used to work out of their homes. When they had to meet, they would go to a Café Coffee Day outlet, spend a few hours, decide on the week’s agenda and then split, recalls Vishal. Last August, the start-up firm opened its office in Bangalore and started an office in Delhi this year.
Vishal admits that it was indeed difficult for them to sell their idea, mainly because they did not have a big brand name. However, in the first three-four months they had their breakthrough when they roped in Orient Green Power as their first client. “That was a major breakthrough and after that we got a few more large clients.”
REConnect now has more than 90 corporate clients and about 160 projects, from which it helps trade in RECs. The company’s operations span 16 States.
“People started seeing that since we are focussed only on REC, we bring a lot of intensity and execution capability. We have the expertise,” says Vishal.
The company works with its clients from the beginning, helping in regulatory clearances, getting accreditations for the projects, ensuring that the certificates are issued and finally in getting them traded. REConnect’s income comes from a fixed fee when it signs up a client and also a commission when the certificates get traded.