Keeping the Lights On.(Business)(energy outsourcing)(Company overview)

Byline: Sam Knight

A British company is making big profits by outsourcing power to the world's poorest countries.

It's a proposal that has come up in neither President Nicolas Sarkozy's energy plans for France, nor President Vladimir Putin's power diplomacy for Russia, nor Britain's debate over nuclear plants. But then, it's hard to imagine temporary electric generators' being held up as a viable national energy plan.

In fact, that's exactly the plan in much of the developing world, as governments coping with inadequate infrastructure and the galloping energy demands of growing economies try to keep the lights on, whatever the cost. The portable-generator business is booming -- already, temporary electric generators (not too far removed from what rural homeowners in the West might have in their basements) light towns and factories from Yemen to Venezuela, Sri Lanka to Mongolia. In Africa, diesel engines supply 50 percent of the power grid in Uganda, 10 percent in Kenya and similar proportions in Mauritania, Angola, Sierra Leone and the Democratic Republic of Congo. In nearly every market, the No. 1 provider of this power is a little-known British company called Aggreko, which makes electricity generators in Dumbarton, near Glasgow, and rents them to energy-hungry clients all over the world.

In the last three years, Aggreko has moved beyond airlifting temporary power into disasters such as Hurricane Katrina or set-piece events like the Olympics and the Super Bowl, and into the new territory of supplying temporary power to developing-nation governments. "There's not many places we aren't," says Rupert Soames, Aggreko's chief executive.

The first consequence is profits. Rental power costs about three times as much as permanent; in September, Aggreko announced that its revenues had risen by 33 percent to $654.9 million in the first six months of 2007 (earnings were up by 65 percent). The success was echoed by Caterpillar, Aggreko's only big rival in power rental, which had more than 20 percent growth in many generator markets.

Aggreko's London share price has doubled in the last 12 months, and analysts expect it to rise, because power supply is political. "What politicians don't want are people complaining that the ...