Funds raised from the IPO must be invested in clean energy: Greenpeace demands Bharti Infratel

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Press release - December 10, 2012
New Delhi, December 10th, 2012: Ahead of the launch of Bharti Infratel Initial Public Offering (IPO), Greenpeace called on investors to demand Bharti Infratel utilise the money raised from the IPO to invest in clean energy. Greenpeace has termed this IPO as a decisive moment for the Indian telecom industry and raised the concern whether the new investment will fulfill the sustainability mandate under the Green Telecom Directive of the Government of India1.

Bharti Infratel, one of the largest telecom infrastructure companies, with over 80,000 towers in the country, has outlined the use of diesel to power its network towers as one of the key financial risks attached with its business due to the volatile nature of fuel pricing and unsecure supply2. The company has itself accepted that the massive use of diesel to run its network towers will have adverse impact on their businesses and financial condition.  Therefore, investors should consider the financial and environmental risks of the business model which relies heavily on diesel and demand the company rapidly transits to renewable energy especially for off-grid towers.

The company must use the funds raised through this IPO to transit to a clean energy powered business model, going beyond the green initiative it plans to fund.  This will lead to the company being more environment friendly and economically robust.

“The IPO launch gives Bharti Infratel a unique and advantageous position to fulfill its sustainability mandate through the new raised investment. This will not only make the company more environment friendly but also more economically robust.” said Greenpeace Climate and Energy Campaigner Mrinmoy Chattaraj “Bharti Infratel has shown its intent in the past and now is the time for more affirmative action on ground. We do hope that new investment will help in realizing the intent into firm commitment.”

GSM Association (GSMA) in collaboration with International Finance Corporate (IFC) in its report “Procurement Model Analysis: CAPEX Vs OPEX3”, developed specifically for the Indian telecom industry in the year 2011, said the Indian telecom companies need to adopt renewable energy based OPEX model as a preferred option to cut down its cost as well as carbon emission. This OPEX model will provide flexibility to the telecom companies on their operation and will be far more cost effective than the current diesel based OPEX model.

Earlier this year Greenpeace launched the report “Enabling Clean Talking” proposing a clear roadmap for the sector to transit to a sustainable business model based on renewable energy. The report estimated annual savings to the tune of INR 13,000 crore for Indian telecom industry if it phases out diesel completely and replaces it with renewable energy technologies by year 20204.

“In today’s scenario aggressively pursuing renewable energy will not only reduce environmental impact, it will also cut network costs and help make communication more affordable for everyone. It is in the self-interest of the industry,” added Chattaraj. “It has a great chance to become the climate champion of the industry and set example for the rest to follow.”

Over 2 lakh activists along with Greenpeace over the last 2 years have been urging Bharti Group to lead the low carbon race and focus on managing its energy and carbon by substantially shifting its power generation for network operations to renewable sources, and to proactively advocate for economy-wide policies that combat climate change and increase the use of renewable energy.

Notes:

[1]) Direction to service providers was issued by Telecom Regulatory Authority of India, Government of India under “Approach toward Green telecommunications” on January 13th, 2012. The full text of directive is available here http://www.trai.gov.in/WriteReadData/WhatsNew/Documents/Press%20Release%20on%20green%20telecom%20January%202012%5B1%5D%20%281%29.pdf

2) Copy of Red Herring Prospectus submitted by Bhari Infratel is available here http://www.nseindia.com/content/ipo/RHP_BINFRA.zip

3)Copy of the report “Procurement Model Analysis: CAPEX Vs OPEX” by GSM Association (GSMA) Green power for mobile and International Finance Corporate (IFC) in year 2011 is available here http://www.gsma.com/mobilefordevelopment/wp-content/uploads/2012/03/gpmprocurementmodelanalysiscapexvopex.pdf

4) To access the report Enabling Clean Talking, click here

Contacts:

Mrinmoy Chattaraj, Campaigner, Greenpeace India, +91 9902201201,

Shashwat Raj, Senior Media Officer, Greenpeace India, +91 968686 1974,

For more information visit

http://www.greenpeace.org/india/en/What-We-Do/Stop-Climate-Change/Green-Electronics/switch-off-diesel/