Energy Power Partners (EPP), a private equity firm focused on renewables and clean energy, will be providing full equity financing of over $15 million for a 3.2-megawatt (MW) waste-to-energy project being developed by Bluesphere Corporation, according to a statement.
The facility, which will be located in Johnston, Rhode Island, will generate clean electricity from biogas derived from organic waste.
The two companies said they would enter into a final, definitive agreement no later than August 30. Once EPP completes final due diligence of the project and the agreement is signed, the funds will be made available to Bluesphere in cash for the construction of the facility.
The facility will utilise anaerobic digestion – a process that breaks down organic material – to produce biogas, primarily methane and carbon dioxide, which will be used to generate electricity. The organic mass used in this process is mainly derived from food waste.
“EPP is an extremely desirable partner not only for its expertise and experience in implementing projects of this nature, but also because it is offering to finance this project with 100 percent equity,” Bluesphere chief executive Shlomi Palas said in the statement, noting that the company had begun developing the project with its own funds and through other financing agreements.
According to a presentation on Bluesphere’s website, equipment manufacturer Caterpillar is also financing the project.
“Not having debt creates greater cash flow and minimizes restrictive covenants,” Palas said.
Bluesphere will maintain a “meaningful” equity stake in the project, according to the statement, but the company did not specify the percentage it will hold. The company will also earn project management fees and profit sharing with build-in performance incentives.
Bluesphere also announced that it has signed a letter of intent with a recycling and waste company, which will supply 100 to 200 tons of organic waste per day to the Johnston facility.
The company also has a letter of intent for a 15-year electricity purchase agreement, a site lease with purchase option, a compost off-take agreement, and an engineering, procurement and construction (EPC) contractor.
The plant is expected to begin commercial operations by December 2015.
Based in Even Yehuda, Israel, Bluesphere describes itself as “an international project integrator and producer of clean energy”. It became active in this sector in March 2010. Before that, the company had first been incorporated in Nevada in July 2007 under the name Jin Jie Corp. That company was in the business of developing and promoting automotive internet sites, according to a Securities and Exchange Commission (SEC) filing.
In addition to the Johnston project, Bluesphere is developing another 5.2MW facility in Charlotte, North Carolina, and a landfill project in Ghana, that is being executed by Pure Sphere, a 50/50 joint venture between Bluesphere and BPure.
According to the company website, the project comprises the installation of a gas collection system and flare at two closed landfills in Ghana. The landfill site was closed after 2005 with approximately 1.5 million tons of municipal solid waste.
Headquartered in El Segundo, California, EPP is an independent fund manager that makes project equity investments in the renewable and clean energy sector. It targets small- to mid-sized base load renewable power projects with contracted cash flows and long-term capital appreciation.