Where Ganga stopped, Gangotri began

Or, how a billion-dollar enterprise came up, producing clean water from the sea

My Forbes column, ‘Hydro-Alchemy’, begins: “Alchemy refers to a medieval science that turns metals into gold. As our planet depletes natural resources at a frantic pace, one brand of alchemy that will become critical to humanity’s survival is technology that turns sea water into drinking water.”

The column profiles a small San Leandro, CA company, Energy Recovery Inc (ERI) that was at the heart of our hydro-alchemy venture, Gangotri.

ERI created a ceramic device called the PX pressure exchanger that has helped water treatment plants around the world reduce desalination costs to a fraction of what they were in the mid-1960s. Back then, the cost of producing a cubic metre of fresh water from sea water averaged $10.

In 2008, thanks to the PX device, desalination costs averaged $0.46 per cubic metre. ERI’s clients were producing over 5.2 million cubic metres of fresh water a day and saving an estimated 500 mw of energy or $352 million a year in operating costs.

It is ERI’s technology that we used to set up our first desalination plant in Orissa, on the coast of the Bay of Bengal. Gangotri was envisioned to become the new source of clean water for India, a role that the Ganga had ceased to play by 2010.

Of course, clean water is needed in every aspect of life, from drinking and cooking, to irrigation, to industrial use. We had to carefully select what segments of the market we were going to go after first, and plan the rollout accordingly.

After careful consideration, we chose to go after the industrial market first, and our first plant in Mayurbhanj reflected that choice. While we got the benefit of the Bay of Bengal coast on the supply side, we also got Haldia Petrochemicals as our first major marquee customer. Our initial funding came from the Asian Development Bank, to the tune of $10 million to complete the first plant in collaboration with Aqua-Tech Engineering & Supplies Pte Ltd in Singapore. Aqua-Tech had the experience of building desalination plants, which was vital for us. In fact, we did the first deal with Aqua-Tech as a build-operate-transfer contract to the tune of $6 million. 

Both ERI and Aqua-Tech helped us establish credibility with our investors, and after we brought HPC to the table as the anchor client, we were very well-situated for sustained financing and growth.

More financing poured in by 2012, after we had the first plant up and running. One of the biggest collaborators for us turned out to be the Orissa government. Having spent most of its post-independence history as a backwater state, Orissa was determined to find a niche, and hydro-alchemy via sea-water-reverse osmosis provided them with the much needed breakthrough.

By 2015, Gangotri had 30 desalination plants of various sizes all along the coast of Orissa built on land that the state government provided us at huge subsidy. Gangotri captured 78% market share in the industrial market in Orissa, Bihar, Madhya Pradesh, West Bengal, and western Maharashtra.

By 2018, Gangotri was also feeding the utilities in each of those states and many of the South Indian states through a complex grid that was designed to achieve maximum efficiency. The Indian government had acquired major financing from the World Bank for this grid project, and we were able to avail of the infrastructure that we were invited to become a part of designing.

We also accidentally solved a different problem, which we did not really set out to do. Instead of diverting a large percentage of water from the northern and eastern rivers, Ganga and Brahmaputra, to south India, we were able to construct desalination plants all over south India, and funnel fresh water back into the rivers.

India’s earlier plan was to link the rivers flowing from the Himalayas and divert them south. This would really hurt Bangladesh, since more than 80% of Bangladesh’s 20 million small farmers depend on water that has flowed through India.
So, having saved Bangladesh from this calamity, we also earned the contracts for building almost 100% of Bangladesh’s desalination infrastructure in the delta.

We were not alone in our quest for hydro-alchemy. GE’s water division became a major player in this market as well (with a focus on western and north-western India), alongside several other major water OEMs.

Each of us was frantically using our R&D capabilities to address other areas of water purification with scalable technologies. Each of us funded major research labs at the IITs.

Yes, Gangotri is a billion-dollar company in 2020. But we are much more than that. We are helping solve a planet-scale problem, and that, we consider, is an enormous responsibility.