Opportunities and Challengesdeveloping Biomass projects in Africaon the example of the BioTech company
A devastating Cycle destroying theCoconut Industrie
Mozambiques former driving Coconut Industry– prosper times are over, what next? Coconut - Tree of Life • The Coconut Tree (Cocos Nucifera L.) is called "The Tree of Life" because of the endless list of products and by-products derived from its various parts. Food, shelter, fuel - name it, the coconut has it. • And than CLYD, the Coconut Lethal Yellowing Disease was discovered and Rhinoceros Beetle (Oryctes) did the rest. Slowly but with little hope of stopping it, large areas of Coconut Tree Plantations are forever lost!
OPPORTUNITY - AN IDEA IS BORNTapping in the unique opportunity:Biomass from dying Coconut Trees inMozambique, Large Areas of Tree Cuttingand RemovalCOCONUT –Tree of Life?BIOMASS as lastPart of the life-cycle
CocoPellet Concept Using the Export of Biomass industrialfrom Estates/ Pellets in bulk Plantations Setting up of shipment to a 130 ton/year Europe Biomass Pellet Plant
General Challenges and Opportunities wefaced Renewable energy exploitability and infrastructure availability in Africa 1 Forestry management aspects that can Be certified on basis of the FSC 2 Worldwide Economic crisis risk aversion to invest in Africa 3 Missing Southern African regions investment opportunities 4
Challenges of a green Idea toget an Investor (in Africa)Is it enough to have … BusinessPlan• a well elaborated Business proposal• Your financials and Investment ! figures right• Company Documents are all in order Plan prepared by: Peter Pichler• Necessary supporting Letters Version 2012-06-21 and approval from Government
We are motivated toDuring our search for the right Investor/Partnerwe had some distressing experience to make afterplacing our project……• We submitted once the Project to the Investment Centre CPI but we had to discover that we dealt with a con-man who used a cunning way convincing us• We where 3 times approach by very convinced Investors who failed to come up with proof of cash to support their promises!• We had to deal with more than 10 scammers from all around the world (be careful with postings on investment websites!), wasting a lot of time
Presentation CocoPellet Plant MozambiqueFacts Project Financials• Funding Required – USD 35 Mio for full start up.• Ten year IRR of 22%.• Biomass wood pellets 130kt pa• Investment USD 35m EBITDA Margin 39/44 %• Ten year IRR of 22%• Note: IRR figures quoted do not include residual values at the end of the project. The project is expected to continue beyond the 10 year stated duration.
Background• The funding being raised will enable the SPV to acquire the necessary licenses and equipment to produce up to 130,000 tones of compressed wood pellets per annum. Investment is required Q1 2013 with production scheduled to begin Q4 2013.
CocoPellet Factory outlineBioTech Lda. Mozambique Cocowood Pellet Project Flow sheet Logstorages: capacity of 2-3 months production full extension 40 log pieces with 6 m length per hour 40 log pieces with 6 m length per hour Delivery requirements: 80 pieces with 6m length per hour; 1.920 pieces per day (24 hours / day) of production 13.440 pieces per week (7 days / week) Logistic requirements: 37 trucks per day at 7 delivery days per week (20 tons loading weight per day) 52 trucks per day at 5 delivery days per week Delivery requirements of biomasse for the hot-gas generator: Required amount of biomasse: 44 t abs.dry per day = 75 t wet per day 525 t wet per week (7 days) Logistic requirements: 5,25 trucks to average per day (5 delivery days per week; 20 tons loading weight per day) Chipping and fractionating raw material: Drying raw material: front loader Drum dryer: 5 t/h water evapuration for 3. shift Hotgas- Hammer-mill 1 Generator Output of dried material: 65.000 t/y quad screw bin Drum shredder line 1 quad 5 MW with sieve 15 t/h abs.dry screw Feed input: 15 t/h w=40%; Outlet: 10 t/h w=10% bin 1 30.000 MWh/y water evapuration: 5 t/h, working time: 6.500 hours per year 2 shifts = 4.335 h/a = 65.025 tabs.dry/a with = 72.250 tpellets/y sieve Hammer-mill 2 Ash: Chipps deposite approx.1000 t/a approx. 2.000 m3 Drum shredder line 2 Drum dryer: 5 t/h water evapuration Hammer-mill 3 Hotgas- 15 t/h abs.dry quad Generator Output of dried material: 65.000 t/y quad screw bin 2 shifts = 4.335 h/a screw 5 MW with sieve Feed input: 15 t/h w=40%; Outlet: 10 t/h w=10% = 65.025 tabs.dry/a bin 2 30.000 MWh/y water evapuration: 5 t/h, working time: 6.500 hours per year = 72.250 tpellets/y with front loader sieve Hammer-mill 4 for 3. shift Ash: approx.1000 t/a Pelletstorage: Pelletizing: pellet water. 1.300 m3/y press 1: rest bin: 5 t/h Pellet production pellet hammer- line 1. step conditioner Pellet storage cooler 1: mill 65.000 t/y Output: silo 1: < 12 t/h pellet press 2: 6.500 h/a up to 130.000 tons of Pellets per year 7.500 t 5 t/h Ship loading system: 1. step: 65.000 t/y 500 t/h 2. step: 130.000 t/y pellet water. 1.300 m3/y press 3: rest bin: Pellet storage 5 t/h silo 2: Pellet production pellet hammer- 7.500 t line 2. step conditioner cooler 2: mill pellet 65.000 t/y < 12 t/h 6.500 h/a press 4: 5 t/h ing. büro längle gmbh – Austria – 6840 Götzis 2012-06-21 / Lg Flow sheet FS 20110728 Rev. 3
Set Milestones Planned dates• Cash Drawdown Quarter 1 2013• Commencement of logging and log preparation Quarter 1 2013• Pellet plant delivered to site Quarter 3 2013• Build & commission pellet plant Q3 2013 & Q4 2013• First finished biomass pellet produced Quarter 4 2013• First shipment (15-20,000 tons) dispatched Quarter 1 2014
Management Team and Staffing• The project developer has a track record of delivery in the commercial field in a number of sustainable projects. The core management team has vast experience, with senior members established in the country. The pellet plant designer has specified and managed several installations throughout Europe.• The project also benefits from high-level government and community support, plus established commercial links.
Investment Summary• An offshore SPV will be created for this venture with 70% of the shareholding being available to investors in return for the sum of USD25m. The remainder of the share equity will be held by the principals and management team.• In support of this project, access to land, cost of the source biomass, and land at the port have been granted at very beneficial rates.• The USD35m investment will cover the required permits, equipment and cash flow to enable the operation to establish the Pellet Plant and run operations until income is generated in the 1st quarter of 2014.
Risks and Contingencies• The pellet plant technology is ‘self contained’ and there is minimal opportunity for operator-induced breakdown.• Secure Internet access to the pellet production system enables the installation expert to monitor production and adjust many production variables. This can be done via any Internet access point.• Regular preventative maintenance schedule is planned to prevent unnecessary down time.• Contingency for planned maintenance and unplanned downtime has been built in with all production rates and financials being based on 74% utilization of the plant. This equates to 95 days permitted downtime per annum before planned production volumes are impacted.• Feed stock supply is already arranged which will cover the 10 year plan period.