Asiagreed.info

Description:

The proposed project concerns the construction and operation of a 50 MW Greenfield biomass fired co-generation facility in China. Electricity and heat will be generated by firing the abundant corn straws available in a 30 km radius from the proposed project activity. The electricity will be supplied to the regional grid and the co-generated heat will be supplied to the local district heating system.

Important approvals are granted, agreements are in place and studies such the FSR and EIA are issued and approved. The first construction activities have started.

The project developer is a Hong Kong registered entity backed-up amongst other by a European technology provider. Technology employed is of high quality and reliable, and the project developer has experience with the implementation of biomass fired power stations.

The equity IRR after tax, calculated over the total equity and including CDM revenues is around 23%.

The project IRR after tax including CDM revenues is approximately 17%. CER revenues are estimated based on 410,825 CERs annually at a CER price of 10 EUR/tCO2e.

The project developer is looking for an equity investment into a newly formed SPV of around 77 million RMB in this 650 million RMB project.

Timing:

The 1.5 year construction period has already started. The returns are calculated over a period of 13 year.

• 1.5 year construction period
• 13 year operational period

Key Financial Parameters:

Proposed Financial Structure:

This project involves an investment in a newly formed SPV.

The following proposed financial structure is subject to further negotiation:

66% Bank debt (13 years, 7.5% annual interest)

34% Equity, of which: 65% of equity already secured by the other investors, and 35% of equity to be held by second 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.