2×25 MW Biomass Cogeneration Project
Description:
The proposed project concerns the construction and operation of a 2×25 MW Greenfield biomassfired cogeneration facility in
Important approvals are granted, agreements are in place and studies such as the FSR and EIA are approved. Construction will commence once financing is secured.
The Chinese project developer is experienced in the operation of cogeneration projects. The main technology (boilers) will be supplied by “Anshan Boiler Factory Co., Ltd.”, an experienced manufacturer with a history of 60 years of successful boiler manufacturing.
This project has an attractive expected equity IRR of 22% (calculated over the total equity, after taxes). In addition, this project has the social and environmental advantages of a new renewable energy project.
The project developer is seeking investors to invest around 103 RMB million in this 397 million RMB project. Investment would be into a newly formed SPV.
Timing:
The construction activities are expected to commence once financing has been secured.
Following a two year construction period, the project is expected to be operational for 20 years.
Year 1 – 2: 24 months construction period
Year 3 – 20: Operational period
Key Financial Parameters:
|
Total investment excluding rolled-up interest (RMB) |
375,506,700 |
|
Equity IRR (over total equity, after taxes) |
22% |
|
Project IRR (after taxes) |
15% |
|
Pay Back Period (yrs) including construction period |
<8 |
|
Non-Convertible Debt provided by investor (RMB) |
19.830,000 |
|
Subordinated Convertible Debt provided by investor (RMB) |
48,970,000 |
|
Equity provided by investor (RMB) |
34,290,000 |
Proposed Financial Structure:
The following proposed financial structure is subject to further negotiation:
- 65% Chinese Bank debt (10 years, 7.83% annual interest)
- 5% Non-convertible debt provided by investor (10 years, 8% annual interest rate)
- 12.35% Subordinated convertible debt provided by investor (10 years, 8% annual interest rate)
- 17.65% Equity, of which 51% held by the project developer, and 49% held by the investor
The financing structure may be subject to requirements from the Chinese government, depending on the legal status of the investor.
More details and a tailored investment proposal can be discussed.
Our company is interested in your biomass cogeneration facility. We are experienced in deal structuring and funding cogeneration facilities. Please contact me directly and review our website. Regards, Samuel A. Longo