Corrections or additions?

This article by Kathleen McGinn Spring was prepared for the April

14, 2004 issue of U.S. 1 Newspaper. All rights reserved.

Armed with Solar Technology, Their Target is Iraq

"There’s a line between courage and foolhardiness," says Quentin

Kelly, CEO of WorldWater. As the Pennington-based solar powered water

pumping company he founded prepares to send seven of its own to

Baghdad, he knows that he is walking that line. There is a map of Iraq

spread out on a table in his office, and he leans over it again and

again as reports of new battles come in from CNN. A mosque has just

been bombed, killing some 40 Iraqis. Media commentators are starting

to refer to "the new war in Iraq." Just the week before, four American

contractors were pulled from their truck, brutally murdered, burned,

and hung from a bridge as crowds of young boys cheered.

A call comes in from the Sandi Group, the international development

company with which WorldWater is to meet in Baghdad. Kelly calls for

Anand Rangarajan, his executive vice president and the man who will

lead WorldWater’s group to Iraq. The two talk via conference phone

with their Iraqi contact about how close the violence is coming to the

hotel in which the WorldWater contingent will be staying.

The hotel, which Kelly refuses to identify, is surrounded by massive

concrete pylons. Sandi has hired a top-notch security force to

safeguard its contractors. Still, even as WorldWater employees from

around the country gather at the company’s Pennington headquarters in

preparation for the trip, originally scheduled to begin on Saturday,

April 20, and now postponed for at least a few days, doubt remains. Is

the company being foolhardy in pressing ahead? The stakes are

enormous.

"Iraq is transformational for us," says Kelly. He founded the company

in 1984, working with five volunteer scientists from Princeton

University to develop a water pump powered by the sun. "We were in R &

D for a long, long time," he says. A major breakthrough came two years

ago with the invention of a control mechanism that increases the power

of its solar water pumps enormously. Manufactured by Rockwell and the

"brains" of the system, it is a modification of the devices that drive

elevators in large buildings. Using this technology, the company’s new

Aquamax system, says Kelly, "allows us to take the level of solar

power of 5 horsepower to 20, 50, 100, 400, 600 horsepower."

While its competitors still pump with only five horsepower, an amount

that produces a modest amount of water, WorldWater’s Aquamax is able

to pump enough to fill the water needs of a small city. "We could pump

the Delaware River dry!" says Kelly with a grin, before adding, "No,

no, just kidding."

After 20 years, the company has impressive, proprietary technology in

place. It also has new financing. During the first week in April, SBI

USA, an investment banking firm based in Irvine, California and

feeding on money from Asia, gave WorldWater a $3.64 million common

stock purchase order, with a call on an additional $3.64 million at

the company’s option. This is a significant investment in a company

with a market cap of $10 million.

"Oh, this is huge for us," says Kelly, a low-key, engaging Irish

American, who leads his devoted troops in blue jeans and sneakers.

"For the first time, we are properly funded."

Seconds later, an investor calls, asking about recent activity in the

company’s stock, which trades over the counter as WWAT.OB. He tells

his caller the story of how the financing came about. It involves a

speech Kelly made at a financial conference in New York, two people

who heard him and instantly realized that his was exactly the type of

company in which SBI wanted to invest, and a deal that was consummated

in under seven days.

The pieces are falling into place for WorldWater. Its technology is

ready for prime time, its ledger is ready to fund new orders, and it

is poised to win a great deal of business in Iraq, which is just the

sort of place where its revolutionary method of supplying water is

most needed. Business from Iraq could easily push the company, which

went public in 1997, into profitability. But for Kelly, and for many

of his employees, using the sun to pump water is about much more than

making money.

The mission that led Kelly to the moment where he has to decide

whether or not to send his employees into a war zone began at a

cocktail party in New York City in 1984. There he met a man who was an

economic advisor to Sudan. At the time, Kelly owned a company that

sold pressurized water systems for boats and RVs. He and his new

acquaintance talked about the water needs of Sudan, and Kelly was

invited to survey the situation for himself. He promptly agreed.

"It was catastrophic," he says. "There was little water in all of

Khartoum." Refugees from Ethiopia, 100,000 men, women, and children,

were gathered in the capital of Sudan. "They were dying in a mass

lump," he recalls. He stood with the country’s natural resources

director and watched.

"Isn’t there anything that we can do?" he asked.

"What can we do?" replied the minister. "We have no diesel fuel. No

pumps. We’re not on an electric grid."

"What’s the water table?" Kelly asked.

The minister told him it was 10 meters. "Thirty-three feet!" he

exclaims. "They were dying of thirst standing just thirty-three feet

over water!"

Has he ever forgotten the scene? "Never," he says. And it’s not only

the sight that remains in his mind. "There was a smell," he says, "and

a sound. Sort of a humming."

The experience changed his life. He went straight from the Sudan to

Princeton, in search of scientists to help him develop a water pump

for Third World countries. He is not an engineer himself, and in fact

he traveled anything but a straight path to the work he is now doing.

Kelly, one of four children, was born in New Orleans and spent a good

part of his childhood in Washington, D.C. His mother was a school

teacher and his father owned a construction company. "He built a lot

of the streets and sidewalks in New Orleans in the ’20s and ’30s,"

says Kelly. "I still see his ‘Globe’ symbol on corners when I visit."

After earning a degree in English from Kenyon College in Ohio, Kelly

hitchhiked to California. "I got a job at MGM," he says. "I was the

youngest guy there." After writing for the movie studio, he left to

write a novel and to work for a small newspaper in Southern

California. He left after a short stint, however, because he was about

to be drafted and decided he would prefer not be.

"I went into the intelligence business," he says. After joining the

CIA, he studied Russian at the Monterey Language School before being

posted to Europe. He will not discuss specifics of the work he did,

but he does convey the impression that it was intense. "My feet were

to the fire every day," he says. "It was so challenging, and rewarding

– and scary."

Released from service to his country, Kelly got a job as a writer for

the San Francisco Examiner. From there, he went on to become a

writer/producer for Westinghouse Broadcasting, first in San Francisco

and then in New York City. He moved up in that company, writing

speeches for the president of the broadcasting unit, and then for the

president of the corporation. By the time he left, he was the

president’s assistant.

It was a good job, offering an overview of all of Westinghouse’s

operations, but there came a point where Kelly, the son of an

entrepreneur, wanted to be on his own. Westinghouse had introduced the

English major to engineering, and that is the direction in which he

went as a business owner.

"I went into the water business," he says. "I made some pretty good

money." He started several companies, including the one that sold the

pressurized water system, and then sold them. He also invested in

companies. One of his investments was in a Somerville company that

"started to go south." Living in Connecticut, he had to travel down to

check up on that company more and more frequently. The time he had to

put in became so great that he started to look for a new home in New

Jersey. House hunting in Hopewell, he came upon the farm that had been

owned by Keith Robertson, author of the Henry Reed series of

children’s books.

When Kelly and his wife, Peg Kelly, who now teaches English at MCCC

and at the Princeton Adult School, told their three children about the

farm, the kids, big Henry Reed fans, eagerly signed on to the move.

It was at about that time that Kelly started WorldWater. For many

years it was a part-time endeavor. "I met with the Princeton

scientists, who were instrumental in designing rocket engines for

NASA, on Tuesday evenings and Saturday mornings," he says. He also

worked with solar power experts, but they too were supporting

themselves mainly through other jobs. "We were all doing other

things," he says.

Within the past few years, after obtaining patents on its technology

and receiving backing from a group of Swedish investors, WorldWater

has begun to build its employee roster.

How many employees now?

"Let’s see," says Kelly, leaning back in his chair, counting in his

head. "We have 15 employees here, 10 consultants, 5 employees in

California, 5 manufacturing reps in California, and 4 employees in the

Philippines." The numbers may well soar – and soon. WorldWater is

working on two fronts. It has small-scale prototype projects in the

Third World and it is building a client roster of big water users in

the United States.

Chris Sherring, vice president and director of operations, brings his

laptop into Kelly’s office and fires up a CNN video telling the story

of WorldWater’s solar pumps in the Island Province of Cebu in the

Philippines. On the screen, villagers insert plastic "smartcards,"

developed by WorldWater’s software team, into a sleek blue and white

pump, which fills their buckets with water.

The water Americans take for granted, and for which they pay an

extremely small percentage of their income, is a scarce, precious, and

wildly expensive luxury in much of the world. In Cebu, for example,

Kelly says that profiteers, using donkeys to transport water of

dubious quality, charged villagers exorbitant amounts for the

essential commodity. "People had been paying guys with donkeys 25 to

30 percent of their income," he says.

WorldWater found water, drilled down to it, and now pumps it through

solar-powered pumps. A big problem in much of the developing world is

financing. The village in which the pumps sit had never before

obtained financing for a project. Kelly’s company convinced a local

bank to make a loan for its system by assuring it that repayment would

be automatic.

"Villagers take their cards to town hall and buy X number of liters,"

explains Kelly. "There’s a little machine. It marks up, say, 100

liters. We have tap stands with aqua meters. They take the card, push

it in, and see the number of liters." The water flows into the buckets

the villagers bring, and when they have enough, they pull out the

smartcard. A percentage of each purchase goes directly to the bank to

repay the loan, a percentage goes to the community for infrastructure

improvements, and WorldWater takes a percentage. And the villagers

have clean water for 15 to 20 percent of the amount they were paying

before.

"We can replicate this all over the world, and make a profit," says

Kelly. One of the biggest obstacles to large scale projects is

financing. In the Philippines, his company is close to starting 100

more projects. It has backing from two banks, and is working on

getting backing from the government.

The big issue driving demand for WorldWater’s technology in developing

countries is a lack of infrastructure. In the United States, issues

include the soaring cost of energy, the unreliability of the electric

grid in some places, increasing brown outs and black outs in times of

peak usage, and the need for energy conservation.

Many of the company’s projects are in California, where recent energy

problems, combined with new legislation and incentives, is creating

demand for solar power. The company is installing a one-megawatt solar

power system, enough to power 1,000 homes, at Cerro Cosa Community

College, which is located in the Mojave Desert in Ridgecrest,

California. Half of the cost of the $8.9 million system, which is one

of the most powerful solar fields in the country, was paid for by the

California Energy Commission, and half was funded by a voter-approved

bond.

Elsewhere in California, WorldWater is powering irrigation pumps for a

cotton farm. Recently patented technology developed by Rangarajan and

by another WorldWater employee, Thomas McNulty, causes the pumps to

spring into action when electric power is disrupted, and then switches

back to electricity when it comes back on. The company just received

an excited call from the owner of the cotton farm. There had been a

power failure, all the farms around him had been shut down for three

hours, but his pumps had continued to work without a blip.

"He said ‘it works! it works!’" recounts Rangarajan, with a smile. "We

were so excited. I guess we shouldn’t have been because, after all, it

just did what it was supposed to do, but we were."

A branch of farming in which WorldWater sees great potential is

wineries, where solar-powered systems could both irrigate grape vines

and chill wine. Vineyard owners signing on for a solar system should

see their energy prices drop. In addition, they would be eligible for

a 50 percent utility rebate, a 10 percent federal tax credit, and a 15

percent California tax credit. They would also be able to bank unused

solar-generated electricity with state utility districts.

New Jersey has not suffered the acute energy woes that have shut down

California businesses for days at a time, but the state is looking

ahead. In late March, with snow falling despite the fact that spring

had officially arrived, the state passed regulations that make it the

most aggressive promoter of solar power in the country. New Jersey’s

Board of Public Utilities (BPU) approved standards that call for 90

megawatts of solar power in the state by 2008.

"That’s 90 Cerra Cosa colleges," says WorldWater’s Sherring, referring

to the solar-powered junior college in California.

SolarAccess.com, a website serving the solar industry, proclaimed that

the BPU’s "historic vote" will cause steady growth in new solar

systems in the state.

All of this is good news for WorldWater. It has a number of

competitors, but none yet have the ability to power projects of the

size that it can take on. Conditions are improving for big solar in

the United States, and there are pressing needs for solar, on any

scale, in the Third World.

Iraq falls somewhere in the middle. Its water needs are enormous; it

has some power infrastructure in place; and WorldWater’s solution

comes in the form of the same large pumping systems it is installing

in California. But in terms of working conditions, Iraq, with its

extreme weather, distance from Pennington, delicate diplomatic

situation, and hostile citizens, presents challenges not found in the

United States.

On its upcoming mission to Iraq, the WorldWater team is planning to

meet with the country’s Ministry of Housing and Ministry of Public

Works and also with the big American contractors working in the

country, with Bechtel, Parsons Engineering, Perrini, and others.

WorldWater will not be bidding on contracts, but rather it will be

seeking to obtain subcontracting work from these construction giants.

Rangarajan, who is leading the WorldWater group, explains why a solar

powered system is perfect for war-ravaged Iraq. "Each one is a

self-contained utility," he says. "There are no wires that can be cut;

there is no need to transport diesel fuel."

Rangarajan has been working on solar power projects for some two

decades, since his graduate school days at M.I.T.. Calm and reserved,

he is as passionate about solar power as is his boss. His family

worries about his upcoming trip, but he is absolutely committed to

spreading the non-sectarian gospel of clean, reliable, renewable power

to Iraq.

And how about Kelly? Does he wish that he were going too?

"Every night I go home and say to my wife ‘I’m the one who should be

going,’" he says, "but Anand is so much better. He can analyze a

problem on the spot, and come up with just the right solution. No one

is better."

The danger doesn’t especially bother him. "Anand and I have been in

much worse situations," Kelly says. "We’ve been in rebel camps in

Afghanistan, in Pakistan. We had no protection. In Iraq, they will

have a full security detail."

Still, Kelly rises to study his Iraq map, and marks the distance from

the latest battle to the hotel where his team will stay. Rangarajan,

his colleague and friend, remains seated, calm and assured. "I want to

make solar mainstream," he says. "There is a perfect opportunity in

Iraq. They’re struggling for water, and we can make a unique

contribution. I feel like I have no choice. I must go."

WorldWater Corp. (WWAT), 55 Route 31 South, Pennington

Business Park, Building B, Pennington 08534. Quentin T. Kelly, CEO.

609-818-0700; fax, 609-818-0720. E-mail: pump@worldwater.com.

Www.worldwater.com


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